The
International Telecommunication Union released its first Mobile/Internet
index as part of a 240-page research report entitled ‘Internet
for a Mobile Generation’. The Index measures how each of more
than 200 economies are performing in terms of mobile and Internet technologies
and how likely they are to be able to take advantages of new developments
in this field.
"Individually, mobile
communications and the Internet have been the two major drivers of consumer
demand for telecommunication services in the last decade of the twentieth
century. Put them together and you should have one of the major demand
drivers of this century," states Dr Tim Kelly, Head of ITU’s
Strategy and Policy Unit. However, he cautions that while it takes "no
great leap of imagination to believe that the convergence of mobile
communications and the Internet will produce something big, it may take
longer than we think."
Exploiting the new opportunities
offered by the mobile Internet will require high levels of capital investment.
For example, knowing the location of a particular mobile user, combined
with targeted advertising, may make it possible for local businesses
to attract users that are passing by. Investors want to see concrete
evidence that a market for mobile Internet services exist. But operators
can’t provide that evidence until they build the networks. Because
of this ‘chicken and egg’ situation, the mobile Internet
could potentially be the biggest gamble the telecommunication industry
has ever taken on.
Nonetheless, the combination
of mobile and Internet technologies, such as the short message service
(SMS) and i-mode, is already transforming the way people interact and
the way business is done. Some 24 billion SMS messages were sent worldwide
in the first quarter of 2002.
Ready – Set –
Go - Mobile Internet
Determining which economies are likely to provide the most fertile ground
for the development of the mobile Internet is not an easy task. Countries
that are doing well in terms of mobile services (for example, the Philippines)
may not be doing so well in terms of Internet penetration. On the other
hand, countries that are leaping ahead on Internet use, such as India,
may have a sluggish mobile sector. Again, countries that have the most
potential in terms of infrastructure development may be the most closed
to foreign investment. It should also be noted that although the economies
that score highest in the report, like Hong Kong (China), Denmark or
Sweden are all high income, there are many low, lower-middle and upper-middle
income economies doing much better than their relative GDP per capita
would lead one to expect. Among the lower-middle income economies, the
Philippines (33rd) is in the best position to be a rapid adopter of
the mobile Internet, particularly due to a relatively open market structure.
China (47th) is also well positioned relative to its modest GDP per
capita. It recently overtook the United States as the market with the
most mobile phone users worldwide. Other middle-income countries that
are likely to do well in adopting the mobile Internet include Romania
(37th), Peru (39th) and the Dominican Republic (41st). Appendix A provides
a list of the top 20 countries of the ITU Mobile/Internet Index and
Appendix B outlines how their scores were determined.
Market Trends
There are a number of factors that will enable the rapid growth of the
mobile Internet. First and foremost, the timely deployment of high-speed
3G networks will be a crucial catalyst for the generation of diversified
multimedia services. Second, the availability and affordability of adequate
Internet-enabled handsets will be a prerequisite for mass penetration.
Finally, the development of unrestricted and non-proprietary mobile
Internet content needs to be actively fostered.
Towards a Mobile Information
Society
Mobile phones are already pervasive in all major developed economies
and in an increasing number of developing ones as well. However, with
the advent of the mobile Internet, wireless gadgets are set to invade
new areas of personal life and work.
The average car now has as
much computer power as some of the early Apollo rockets and most families
in developed nations own dozens of microchips embedded in different
devices. The next stage of development is for microchips to gain the
ability to communicate with other devices and to report on their location
and status. Such is the vision of ‘pervasive communications’.
By using existing technology (e.g., nanotechnology, location tracking
systems etc) over new networks, the mobile Internet can make this happen.
Consider the following scenarios:
Future medical devices may
be so small that they could be swallowed to provide health status reports
from inside the body, for instance on blood pressure or on the workings
of a heart pacemaker.
Miniaturized GPS chips could
be located in cars to assist with road charging schemes. They could
record, for instance, whenever a car uses a particular road, or crosses
into a particular urban area, allowing the motorist to pay on a monthly
basis rather than having to queue to pay at toll stations.
Every valuable item we own
may in future have a positioning device embedded in it, to help track
it if it is lost or stolen. People may no longer invest in insurance
against theft but in private security companies to trace and recover
stolen goods.
Inventory management systems
will help factory-owners to track the location and quantity of spare
parts by pinging out messages to "intelligent barcodes" that
are added to each item that passes through the factory
Teenagers Driving the Market
Teenagers appear to be the most avid users of the mobile Internet, notably
in markets where it is at an advanced stage of development, such as
the Republic of Korea and Japan. In Korea, for example, as much as a
third of a user’s mobile phone bill stems from data services.
The major uses of mobile data tend to be "flirtatious and frivolous",
such as downloading cartoon animations or ‘avatars’ to represent
the user when entering chat rooms or sending messages.
One challenge for telecom
operators is that teenage users generally have less to spend than older
age groups. But while teenagers may send more text messages than they
receive, they probably receive more voice messages than they send. Thus
they are a more profitable market than their disposable incomes would
suggest. However, the report points out that if teenagers are driving
the market for the mobile Internet, it may be because advertisers are
ignoring other segments of the market. The ‘grey market’
(senior citizens), for instance, can prove to be a highly profitable
one. The Japanese ‘Raku-Raku’ (Easy-Easy) handset with a
bigger keypad and an easier-to-read screen proved an instant hit in
Japan, selling more than 200,000 units in the first two months.
Internet
for a Mobile Generation – The Report
The ‘Internet for a Mobile Generation’ gives an in-depth
technical background to the history and current development of the mobile
Internet including an analysis of market and regulatory trends. It contains
the latest data on the licensing and deployment of third-generation
mobile systems and services. Individual country case studies serve to
illustrate these various aspects. Finally, the Report contains an 80-page
statistical annex with data on more than 200 economies worldwide, including
details on various parameters outlined in Appendix B. For more information
on the report consult itu.int/mobileinternet.
Appendix
A:
Top 20 Mobile/Internet Index rankings, worldwide*
Economy
Mobile/Internet score (/100)
Ranking
Hong Kong, China
65.88
1
Denmark
65.61
2
Sweden
65.42
3
Switzerland
65.10
4
United States
65.04
5
Norway
64.67
6
Korea, Rep. of
63.42
7
United Kingdom
63.00
8
Netherlands
62.25
9
Iceland
62.03
10
Canada
61.97
11
Finland
61.22
12
Singapore
60.58
13
Luxembourg
58.58
14
Belgium
57.80
15
Austria
57.72
16
Germany
55.53
17
Australia
55.40
18
Portugal
55.13
19
Japan
54.94
20
*Note:
The above table is an extract from the ITU Mobile/Internet Index included
in the full Internet for a Mobile Generation Report. The Index measures
how each economy is performing in terms of information and communication
technologies (ICTs) while also capturing how poised it is to take advantage
of future ICT advancements. The Index covers 26 variables sorted into
three groups: infrastructure, usage, and market structure. These three
components combine for a score between a low of 0 and a high of 100.
The table is taken from the Statistical Annex to the Report, which provides
comprehensive data on network and service development for over 200 economies.
Appendix
B:
ITU Mobile/Internet Index: How the scores are reached
Each economy’s score on the Mobile/Internet Index falls between
a maximum of 100 and a minimum of 0. The Index is a composite of 26
separate indicators clustered into factors of infrastructure, usage
and market structure. These three clusters of variables together determine
how economies stand to benefit from ICTs. The clusters are formed in
a two-part process. First, each of the 26 variables is standardized
(reported as a percentage of the highest observation). Second, the standardized
variables in each cluster are averaged to come up with a cluster score
for each economy. Finally, the three cluster scores are weighted and
aggregated with 50 per cent of the weight going to infrastructure, 25
per cent for usage, and the remaining 25 per cent for market structure.
The final, aggregated score is then scaled between 100 and 0.
Physical
network infrastructure
Fixed
Fixed lines per 100 inhabitants
Mobile
Mobile cellular subscribers per 100 inhabitants
Users
Estimated Internet users per 100 inhabitants
PCs
Personal computers per 100 inhabitants
Bandwidth
International Internet bandwidth (Mbit/s) (Telegeography/ITU)
Broadband
Broadband subscribers per 100 inhabitants (OECD/ITU)
Leased lines
Number of leased lines in the country in Dec of the year (Netcraft)
2.5G deployment
Does the economy have a 2.5G mobile network in operation?
3G licence
Has the economy licensed 3G?
3G deployment
Does the economy have a 3G mobile network in operation?
Network
usage
Roaming
Roaming agreements (based on main operator)
ISPs
Number of ISPs in the country (Source: Netcraft)
Secure socket layers
Number of servers using SSL encryption > 40 bits (Source: Netcraft)
Mobile cost basket
Subscription + 30 three-minute, local, peak calls a month
Internet cost basket
30 hours of monthly residential Internet access (PSTN and ISP charges)
Revenue
Telecom revenue per capita (US$, per annum)
Market
conditions
Private
Is the incumbent public (0) or privatized (1)?
Years private
For how many years has the incumbent been private?
Separate regulator
Is there a separate regulator? Yes =1, No = 0.
Years separate
For how many years has the regulator been separate?
Local calls — market
What is the market structure for local services?
Long distance — market
What is the market structure for long distance?
Int'l calls — market
What is the market structure for international calls?
Mobile — market
What is the market structure for cellular?
Leased lines — market
What is the market structure for leased lines?
ISP — market
What is the market structure for Internet service providers?
