Plumbing may seem like a strange word in a telecoms focused blog – especially one that highlights Long Term Evolution or LTE.  Still, that’s what it is.  Plumbing moves something from one place to another – typically through pipes.  In the plumbing that we all rely on, water or gas is moved to faucets, heaters, cooktops and other other appliances.  In the mobile telecom world, we have new and shiny LTE networks being deployed around the world.  To move all of that data between these high speed network island, we need plumbing – and that plumbing is called an IPX.   Peter Bernstein put it this way in his article: LTE and Roaming – Sybase 365 Leading the Charge: “Let’s face it, plumbing is not sexy.”

Plumbing is indeed, not sexy; however, for connecting LTE networks the “plumbing” such as the connectivity provided by IPX networks are very much required.  The primary reason to connect LTE networks via an IPX is to support subscribers roaming from one network to another.  LTE Roaming is well described in the GSMA document IR.88.

The use of the IPX as the inter-PLMN backbone is clearly defined in IR.88.  I leave it up to you to delve into IR.88, if you wish, as this provides very technically oriented guidelines regarding how LTE Roaming will work.  An IPX is recommended, as a single LTE network can theoretically reach many or all other compatible LTE networks via the single IPX connection.  Additionally, an IPX will support all of the necessary security and network performance requirements that are needed for LTE interconnection, as well as inter-working of a number of other functions.  As has been written many times before, an IPX may be used for a variety of services – LTE Roaming being one of them.

An Overview of LTE Roaming Architecture

Take a look at the GSMA IR.88 view of the LTE Roaming architecture in the diagram below.

The “control plane” means signaling and control messages such as those using the Diameter protocol – especially across the S6a and S9 interfaces; connections between network elements have

interface IDs” and are designated by a letter/number/occasional letter combination.  This also differentiates between the network elements that are active on both the Home network (hPLMN) and Visited Network (vPLMN).  The “user plane” is the actual data – that is email, voice calls, web browsing, rich communications, app data – the actual user data. 

 As shown in the next diagram, which depicts a “local breakout” scenario, the LTE device connects to the E-UTRAN which is the technical name for the LTE Radio network, which passes along “control” messages to the local (in this case, visited) MME (or Mobility Management Entity, the core network element that is used for a variety of functions, including management of the initial attachment for the attached device). 

 The MME then signals the Home HSS (Home Subscriber Server) via the S6a interface.  This request uses the Diameter protocol and the MME asks the home HSS about the subscriber that has connected to its network.  The HSS passed back to the MME information about the subscriber, including whether or not the subscriber is authorized for Local Breakout or Home routed traffic.

Local Breakout is a feature of LTE Roaming and enables the subscriber to reach IP services across the visited network’s   Packet Data Network (PDN).  For Home routed traffic, all “user data” is routed back to the Home Network (much like what happens in 3G networks, today).

In the next diagram, we have a view of Home Routed Traffic.  The Blue lines as well as the highlighted Network Elements outline the components that are involved.  I won’t go into details here; however, note the S6a interface point uses Diameter, while S8 is used for GPRS Tunneling Protocol (GTP) in most cases to reach the Home network.  

Now you can compare what happens in Home Routing vs. Local Breakout.  With Local Breakout  the Diameter protocol is also required over the S9 Interface between the Visited Policy and Charging Rules Function (vPCRF) and the Home Policy and Charging Rules Function (hPCRF).

Basic LTE Roaming call flows and architectural diagrams are rather complex stuff, but the point is to illustrate the importance of the amount “plumbing” necessary to achieve Quality of Service for LTE subscribers.  The IPX makes this seamless connectivity possible so that there is virtually no difference to the subscriber between services and quality of service while roaming vs. being in the home network.  This becomes especially important when some of those services include Voice over LTE (or VoLTE).  With services such as voice and video calling, the IP latency and jitter must be extremely low from end to end. Certainly the LTE (E-UTRAN) radio network will provide low-latency and high bandwidth between the device and the towers, but operators must also require QoS solutions for backhaul (the network connecting all of the cell-site locations together), as well as within the Evolved Packet Core (or EPC) and finally between networks (the IPX).

To further complicate matters, LTE Roaming must also support the concept of 3G fallback. This usually occurs when the visited network does not support LTE or does, but at incompatible frequencies.  In that case, the device will connect to the UTRAN (3G radio network), if it supports such frequency bands (and most LTE devices support both 3G and LTE frequency bands).    Details around 3G Fallback are not discussed here; however, if you are interested, there are either 3GPP and GSM standards documents that can provide the whatever level of detail you need.  Some of the architectural elements needed for 3G fallback (especially when one or both networks also support LTE) are shown in the LTE Roaming diagrams.

So as you can see from this viewpoint, there is significant amount of data exchanged in order to enable subscribers to roam from one network to another.  Furthermore, to provide and retain the QoS that the subscriber expects, there is no viable alternative other than the IPX infrastructure as the fabric to enable the roaming scenarios where subscribers will be expecting the same level of service as they would have in their home networks.

So, as you can see, it IS all about the plumbing.

The 2012 Mobile World Congress is now in the history books.  All of the 60,000+ delegates have returned home with renewed excitement about this multi-trillion dollar industry and the energy generated at this annual ritual of the mobile industry.

For 2012, there was significant MWC chatter around three-letter technology abbreviations: LTE, NFC, RCS, and OTT.   For all of these subjects, I and my colleagues could write books; however, today I want to focus more on LTE and OTT.

For those readers who have never attended a Mobile World Congress, but maybe have attended smaller trade shows or the spring CTIA shows, each and every one seems to generate energy around two or three key issues.  For me it was LTE and OTT.  Perhaps it is because we provide services around all these services; or perhaps because everywhere you turn, there are companies promoting their own products around supporting LTE roll-out.  LTE is designed to enable a wide variety of applications, but a key benefit is to better enable richer multi-media services such as RCS.  In fact, and especially in the European markets, RCS can be a clear differentiator for many operators to “take back the subscribers” from the grips of various OTT services.  Offering integrated contact lists, rich P2P communications, such as presence-based messaging, voice calling (including VoLTE!) enriched with video and images, RCS will help operators fully realize the benefits of their new LTE networks.

It was clear, from the new GSMA brand joyn (for soon-to-be launched RCSe services) announcement and several operator CEO presentations that the mobile operators are working very hard to take back the subscriber with superior products and services.  The GSMA says that “joyn makes everyday mobile to mobile communications more engaging.”  They also say: “It’s just there, it just works.”   In future blogs, we’ll talk more about RCS, what it looks like, how it works and where it is going.

The “It’s just there, it just works” quote reminds me of a similar quote from a certain fruit-inspired company, who, as I write this will be launching a new iPad, tomorrow.  Let me go on a limb here and make a prediction:  I predict that the new iPad 3 will not support LTE. I think, at this point, Apple would rather wait for further operator deployments (various sources agree that over 120 LTE networks operational by end of 2012).  Still, if the iPad 3 does happen to support LTE, and I don’t think it will, that would be a huge catalyst to get operators moving even faster (not withstanding multi-band support from many other OEM devices: Samsung, LTE, and HTC to name a few).  Otherwise, I would like to note that HSPA+ is quite fast these days.  My real life experiences (via SpeedTest.net), both in Barcelona and in my home areas of Virginia now give me in excess of 6 Mbits/sec download speeds.  Addtionally, LTE networks are still too fragmented in terms of frequency bands – an Apple LTE supported device would have to be targeted for certain regions, possibly supporting three groups of frequency bands  at minimum.  But, later in the year, as the LTE picture starts to further materialize, as more multi-band LTE chip sets are available, then let’s see what the new iPhone 5 (or whatever it is to be called) will do.  I think there will be more than a realistic chance of an iPhone 5 LTE support.

In the coming weeks, I will be following up with a more technical focused blog entry around LTE Roaming and technology.

Finally, I’m reprinting my MWC Daily article (appeared in Wednesday, February 29^th issue), that addresses OTT impacts.  I wrote this to a non-USA mobile industry audience, as the North American market players are now quite familiar with our own brand of OTT services – it’s different in Europe and other parts of the world, and very concerning to many.

Over-The-Top Messaging Impact on Traditional SMS

In the last 2 years, new, potentially disruptive Over-The-Top Messaging service providers have emerged in the North American marketplace.  These OTT messaging providers, unlike mobile network operators who provide services across mobile networks, are not affiliated with any specific mobile network operator (they are not a Common Mobile Radio Service or CMRS operator). Instead, the service runs “over the top” of an existing broadband service.  We coined the term “NUVO” to describe them.

NUVO stands for Network Unaffiliated Virtual Operator, a specific type of Over-The-Top service provider. NUVOs are person-to-person communications service providers, similar to Mobile Virtual Network Operators (MVNOs), except that MVNOs provide services on specific mobile operators’ networks.

NUVOs provide basic services such as voice, SMS and MMS, as well as various other services over any network — mobile or fixed. NUVOs are typically smart-device-based service providers (smartphones, tablet, iPod touch) that include companies and services such as Google Voice, Pinger (Textfree brand), Gogii (textPlus brand), MediaFriends (HeyWire brand), Toktumi /Line2, Enflick (TextNow brand), TextMe and fring.

A common NUVO attribute is that the service requires a new ITU E.164 style telephone number. The telephone number is typically assigned to each user or subscriber, who can then interact with others via mobile-style messaging, through voice calls or video calls.  Another common NUVO attribute is that they try to interoperate with the existing messaging, video or voice ecosystem.

In 2010 and 2011, NUVOs’ scope and influence grew considerably in the United States and Canada with subscriber estimates numbering between 15 to 20 million. Monthly message traffic now exceeds 5 billion messages per month to and from the Mobile Operators alone helping the overall messaging market to continue to show growth.

For this mixed messaging ecosystem to be successful there must be a variety of checks and balances in place, such that all participants respect the long established rules of the messaging ecosystem.  Most of the larger, more established NUVOs “play by the rules” and are very diligent about maintaining a robust messaging ecosystem.  Messaging hubs like Sybase 365 work hard to guard the messaging ecosystem against those that would take advantage of the tremendous subscriber reach through SMS.  Messaging hubs must be diligent against SPAM, as well as A2P style messaging that may attempt to pollute a strictly Person-to-Person (P2P) ecosystem. Service providers that do engage in A2P-style messaging activity within the P2P ecosystem may be subject to remedies such as traffic blocking, and reclassification as an A2P provider..  Furthermore, in the United States, the CTIA organization took steps in 2011 to establish a new set of Inter-operator SMS Guidelines to include “non-CMRS” service providers.  These guidelines not only apply to app-based service providers, but also fixed-line providers such as cable television & network providers who can supply SMS capabilities to their fixed line subscribers.   The new CTIA Guidelines provide a variety of basic ground rules with which non-CMRS providers must comply, further guidelines for messaging hub providers, and remedies to deal with those players who insist on operating outside of the norms for legitimate person-to-person SMS.

It is important to note that the NUVO category does not include non-SMS interoperable service providers such as WhatsApp or Kik, whose services require all subscribers to their closed messaging ecosystem to download a proprietary app to their device.  Those service providers do not interoperate with other messaging communities or mobile subscribers through SMS.  In a way, they are very much new Instant Messaging (IM) communities, further adding to the fragmentation of that space.

Recently, KPN in the Netherlands and other operators have reported their overall SMS traffic and revenues have declined, due in part to non-SMS interoperable OTT messaging providers (WhatsApp was specifically mentioned).  In the US and Canada, the NUVOs have chosen to inter-operate with the domestic SMS ecosystem via the messaging hub providers.  In other intra-country markets, that is not the case – messaging hub providers only being used for international interoperability.  Additionally, as noted earlier, NUVOs require standardized telephone numbers, which are more easily obtained in the United States and Canada.  In many markets dominated by GSM operators, domestic SMS is strictly accomplished through direct-SS7-based connectivity between GSM operators.  This completely leaves out the millions of devices that are connected, but cannot interoperate with this GSM-only SMS ecosystem.  This set-up may have given rise to a situation with unintended consequences.  The users of these OTT apps and devices are forced to turn to other non-interoperable solutions.  Consequently, the market gap for free (or very low-cost) messaging is being filled by alternate providers such as WhatsApp.

We should also note that there will be some MNO message cannibalization by such services as iOS5 iMessage, which goes over-the-top as well – but this service is only for iOS5 devices.  iMessage uses standard SMS when exchanging messages with iOS5 devices that have opted out of iMessage, non-iOS5 or non-iOS devices.

NUVOs are appealing to a variety of subscriber demographics.  Most NUVOs offer a basic or complete service for free, subsidized by targeted advertising within the service.  This model has worked quite well, as many NUVOs are profitable or close to being profitable.   Additionally, a NUVO and its subscribers are somewhat like a social network.  Within this network of users is a common platform –the app that each subscriber uses to engage with other NUVO subscribers or subscribers of other entities through standard SMS messaging. A NUVO with 10 million subscribers, all using the same app for messaging and voice or other P2P services can lead to an almost unlimited number of creative capabilities to engage these subscribers.

The NUVO market is becoming an awakening force in North America and there are a few NUVOs taking tentative steps in Western Europe.  As long as these new service providers are responsible citizens (not purveyors of spam, for instance) and they provide interoperability with the existing SMS messaging ecosystem, there is a good chance that they will successfully coexist with MNOs and by expanding the range of devices that can be messaging enabled, they will serve to increase the number of connected subscribers, increase messaging traffic and thus benefit all participants in the messaging ecosystem  – subscribers, NUVOs, and Mobile Operators.

No, this won’t be a 2012 type prediction of Armageddon!  But the mobile industry has begun the inevitable and likely irrevocable evolution towards an all IP ecosystem.  This also means that services – basic services such as voice and messaging have already begun to go IP – or “over-the-top” (OTT) ahead of equivalent offerings from the network providers themselves.

In the past two years, I’ve written and spoken extensively about the “NUVO phenomena” as well as impact or lack thereof on global SMS (and really MMS) volumes.  I’ve also discussed other non-SMS interoperable OTT players such as Blackberry Messenger, iOS 5.x iMessenger, Facebook Messenger and a few others.

This is a time of transition and I think it will cause considerable strife and struggle in some parts of the market, before the industry stabilizes around what it is to become in all-IP paradise.  In some markets, such as Western Europe, independent OTT players including the infamous WhatsApp are having a profound effect on GSM operators SMS revenues and traffic.

In the USA and Canada, NUVOs (interoperable with the ecosystem) got an early start and consequently MNO revenues and traffic have not seen the dramatic drop.   Both the North American and Western EMEA markets have strong mobile IP ecosystems.

In other markets, where smartphones are not so prevalent, there is less cannibalization from OTT players for voice and messaging.  In fact, just the other day, I heard a statistic (attributed to Tomi Ahonen) that 90% of the world still doesn’t use smartphones.  We all know that the “next billion” is coming from developing markets and we are already into that billion right now.   Our global mobile world will evolve at different rates – we all know that, but in markets where it is evolving faster than others, there is  and will be considerable conflict and discord among the major players.  Many analysts and operators point to the emergence of the OTT service provider as a major culprit.

But are OTT service providers the blame? I don’t think so.  These are innovative solutions that have taken the basic services that we all know and love – such as talking and texting – and rebuilt them, amended them, brought them to the new current technology.  The network providers built and are continuing to build wonderful mobile networks.   And why shouldn’t the gaps be filled by OTT services over these wonderful networks?   Yes, there are issues with many of them.  Some don’t understand the concept of interoperability with each other or the existing ecosystem.  Others are deluded that the world will ONLY use their service; therefore, they do not need to interoperate.

So, are the operators (and I’m speaking about the mobile operators, specifically, here) to blame? Again, no – let me explain.  Telecommunications operators are very regulated bunch – in the US included.  Basic services such as voice – the original phone call – are quite regulated and mired in long legacy ecosystem.  This is part of the MNO’s burden.  If they could, they would have moved to OTT voice on top of their own networks much sooner.  They really couldn’t and the regulatory agencies in various countries couldn’t figure out what to do with the already gap-filling, independent players that emerged to just do that.  Think Skype, Google Voice, and many others that now have pure mobile voice alternatives.

The blame lies with the subscribers.  You, me and everyone who are the consumers of all these new, shiny, twisty, twirly applications and services.  We use them – and many of them are free!  All we are asked is to look at some advertisements.   The good one’s even target ads and products to our own liking.  This is one of the catalysts that is changing the mobile industry.   These services work!  The good ones are indistinguishable from the CS-based voice or GSM/CDMA text messaging and MMS messaging that we’ve all loved over the last 10-15 years.

The result is that we see analysts talking to MNOs about how OTT is bad.  We also see MNO’s showing decreased revenue, profits, and traffic.  There is talk of banning OTT services, even regulation (gulp!).  Yes, we are in a time of strife in many mobile markets.  The early-adopter markets as we all know, will have to figure it out as we go along.  The ones to the party later on, can learn from what the early-adopter markets are going through right now.

The key for both service providers (OTT, traditional, value-add) as well as MNOs are to accept that these first shots (from the OTTs) are not meant to be provocative, but are filling a consumer gap – that is services that people want, but at lower costs and ways that can leverage all of this great new network infrastructure.   For OTT service providers:  They must play nicely, they must be willing to interoperate and bridge between the old and new – to work with legacy services and innovate to a new level of service.   Be disruptive, but not destructive.   For the MNOs:  You do OWN the network.  You built it.  Accelerate your own OTT services.  Embrace the good independent ones – it is them that will bring and keep subscribers on your network.

2012 doesn’t have to spell the end.  It won’t be easy.  And with apologies to Gartner, I am optimistic that this industry can avoid the “trough of disillusionment” before we reach the age of enlightenment once again.

Worldwide, texting is a very personal activity – not withstanding the texting to short codes and receiving responses or alerts, roughly 90% of texting worldwide is to another person.  Globally, we still see SMS (or texting) growing.  Our global statistics continue to show worldwide SMS traffic growing, but certainly slowing.

We have a number of ways to determine the top “texting days of the year.”  For our role in the ecosystem in the last year, we have visibility to over half of the US SMS traffic and a very significant portion of the global country-to-country SMS traffic.  Consequently, we have to consider both the high volume US traffic in addition to the global country to country (including the US) traffic.   What’s considered high messaging days in the Middle East may not make a dent in the normal rates in the U.S. and vice-versa.  Messaging rates on major holidays or texting days also vary through the day – for example for New Year’s Eve, early in the day, we would see messaging rates at “normal” levels, but later in the evening, we’ll see the rates skyrocket to over 100% of normal.   Consequently, the overall traffic rise for the entire day would be significantly less than the peak hours.   For this reason, these statistics will look at the top 12 international days, which may be different from the more ‘domestic’ (or North American) view.  Finally, we’ll take a look at some of the peak hours in our US centric view of the SMS world.

For these statistics, we’ll consider the period from December 1, 2010 through December 1, 2011.

Typically reference days are a day or two days before a particular holiday; occasionally, it is the day after.  The criterion is simply the closest “normal” day to the highlighted day.  The percentage increase is calculated from that day or day/hour.

Internationally, in country-to-country scenarios, the Top 12 Texting Days were:

I’m not sure why 05/29/2011 made the list.  It was the Sunday before the US Memorial Day holiday. The major event that day was the running of the Indianapolis 500 auto race.

Now, if we simply take the top messaging days on our US-domestic centric node, by absolute volumes, our top 12 list, looks a bit different:

1. 12.25.2010 – Christmas Day
2. 11/24/2011 – Thanksgiving Day USA
3. 01/01/2011 – New Years Day
4. 12/31/2010 – New Years Eve
5. 5/8/2011 – Mothers Day
6. Friday – 6/24/2011
7. 12/30/2010 – Day Before New Years Eve
8. Friday – 6/17/2011
9. Thursday – 6/23/2011
10. Friday – 6/10/2011
11. Friday – 7/8/2011
12. 12/29/2010 – Two Days Before New Years Eve

In this list, we show four separate Fridays in the summer that were in our top 12 (by volume) texting days.  Summer Fridays, no doubt!  Before you ask how many messages we processed, those numbers are confidential, but suffice it to say, it’s well over 1.6 billion messages per day for all of these and more.

Now, if we change this up and compare certain days to “normal” days, we have the following:

I stopped here at the top 9, as comparing these days to “normal” days gets to be a difficult task as we then have to ask “what is normal?”  Those Fridays in June could be construed as being “normal,” yet they are a top 12 in terms of absolute volumes.  Summer is becoming a significant time for people to text; consequently, we are seeing some of our biggest days by volume in the summer.

Many events such as the Japanese earthquake and tsunami, the US East Coast earthquake, the killing of Osama bin Laden did generate record messaging for certain locales or very short periods of time.  For example, in Africa, in the hour after the news about bin Laden was announced, messaging was up over 200% in the 1^st hour and 86% in the 2^nd hour after the news broke.  In the US, the SMS increased almost 20% of “normal” in the minutes that followed the breaking news.

The Women’s World Cup win by Japan created similar deviations from “normal” but not enough or for a long enough period of time to create a “record day.”   These days, significant news is more often “broken” over Twitter vs. SMS.  SMS (person to person) is still used, but as Twitter is a one-to-many micro-blog, it is better for disseminating news bulletins.

Speaking of Twitter, if we compare the top messaging days to the top Twitter days, most of the breaking news that generated the top Twitter days did not result in high SMS volumes, globally – sometimes certain region generated significant texts, as described above, but these did not translate to significant global volume uptakes.

Finally, I wasn’t going to include Christmas Day 2011 in these stats, but early numbers suggest that Christmas this year moves into 1^st place for both absolute volumes and change from the “reference day” (I used 12/26/2011 – the day after Christmas).  The change from “normal” is 24.4%.  This clearly shows that SMS is alive and well and is widely used around the world as well as widely used in the United States for extending Christmas greetings.

I hope everyone had a peaceful and merry Christmas and holiday season.

Mobile messaging, especially SMS-based messaging, has seen a resurgence of usage in the US market; however, it is not necessarily carrier-based SMS that has grown.  There are a growing number of messaging apps and services that have been launched and announced, and services such as iMessage are just around the corner.   This runs somewhat counter to recent industry and general press, were we’ve seen articles stating that “SMS is dead (or dying)” and that non-SMS “chat” services are displacing true, mobile-SMS interoperable services.    Certainly, in some markets, non-SMS “chat” services have cannibalized some SMS revenues – especially outside of the USA and Canada, but in general mobile operator SMS (as we know it) is alive and well.   I’ve made the case, that by enabling and including 3^rd-party, SMS-interoperable services (such as various NUVOs) in a GSM-only country, the MNOs can push back against the non-SMS chat services, as subscribers will utilize the NUVO-style services on non-mobile telephone devices. 

Recently, AT&T Foundry – described as “innovation centers that are home to our collaboration with tech leaders and start-ups to fast-track new apps, platforms, and more,” launched a solution called AT&T Messages. 

This new service, currently in Beta testing on Android platforms, enables users to make all of their messages (both SMS and MMS), voicemails and call logs accessible from multiple devices, such as PCs and tablets. At this point, I am not clear whether or not this requires that your AT&T text/multimedia messages require a different app vs. the native built-in app. And if you have an iOS device, then how does that play with iMessage, which should also use the built-in messaging app (which reverts to standard SMS when the destination is not another recognized iOS device)?   Are iOS-only communications, which are designated differently than SMS-based messages in the application, also available via the cloud to other devices?   While this sounds good, I think there are a lot of compatibility questions that are not addressed.  It should be noted that AT&T Messages is not a new messaging community or ecosystem – but one that extends their existing messaging into the cloud and thus additional devices.

As of this writing, iOS 5 has not launched yet, which includes iMessage.   Since the iMessage announcement, Facebook Messenger also launched, which does indeed interact, leveraging SMS short codes, with non-Facebook Messenger users via standard SMS; however, a non-Facebook user cannot independently address a Facebook Messenger users via SMS.

Another, non-SMS-interoperable messaging service from Samsung called ChatON was announced on August 29^th of this year.  Like many “messaging apps,” this does not interoperate with the SMS ecosystem; however, this is targeted for multiple device families: Android, iOS, Samsung Bada, and Blackberry.  ChatON will also include image and video sharing as well as group messaging. I do not think this is live video calls such as what you can get with iOS Facetime, Fring, or Skype.  It is more MMS-like (but not compatible with the true-global MMS ecosystem).  While packed full of nice features, I have to note that as it is not interoperable with the legacy (and largest) SMS ecosystem, and everyone else that you “ChatON” with must also be using the same application.

With the addition of Facebook Messenger and ChatON, we now have two, rather large install bases of users that will use a non-SMS-interoperable messaging application.  It remains to be seen if these will cannibalize traditional SMS traffic and revenues from the Mobile Network Operators (MNOs).  Certainly, in some countries, apps such as ‘WhatsApp’ have already done so.  In the United States and Canada, however, the app-based NUVOs have dominated the non-MNO “free messaging app” market.  While users are typically assigned an alternative telephone numbers, the usage of these, along with their traffic continues to grow.  If one includes Google Voice, Pinger’s TextFree, various Gogii TextPlus apps, the TextFree app, the Mediafriends HeyWire app, Toktumi’s Line2 app, the GroupMe app and Enflick’s TextNow app, I estimate that the overall subscriber count is in the 15-20 million range – maybe more.  I have also seen statistics that there are actually more of these apps loaded onto non-mobile-telephone devices such as iPod Touches and various tablets than onto mobile phones.  Consequently, they were the first and still lead in terms of bringing traditional mobile messaging to non-mobile telephone devices.   That interoperability has helped improve overall mobile messaging traffic grow in the North American market. 

While it is too early to tell, the recent non-SMS interoperable ‘chat’ launches have only further fragmented the app-based chat options.  While there is nothing that says these companies can’t launch their services, those that continue to assume that their brand will dominate the non-SMS “chat” space are somewhat deluded.  History is a good teacher and the most successful non-verbal communication medium in the history of mankind is SMS.  Why?  Because it literally reaches over 5 billion people and is now a very strong channel for short code based consumer outreach and in some markets mobile payments. SMS is ubiquitous.  That won’t change in the foreseeable future.

MNO based “traditional” SMS Is certainly under siege; however, various press articles’ notion that SMS is dead or dying is quite premature.  NUVOs are playing a great role in the overall ecosystem by offering alternative messaging applications and this should continue if the NUVO companies can continue to grow users and revenue, as well as offer innovative services that users will embrace.  AT&T made a good start by incorporating the cloud-based AT&T Message capabilities.  NUVOs have already been doing this for some time and it is probably a matter of time before we see more MNO/NUVO partnerships such as the Sprint/Google Voice partnership.

As you can see, the “messaging space”  is getting crowded and at some point, there will be a consolidation of sorts.  I will say that messaging and social networks go hand in hand, and someone will eventually offer a true NUVO-style messaging component of a social network that will indeed be a killer app.

Sybase 365 recently released the results of our Global Operator Survey, covering the IP Exchange (IPX) technology.  Three hundred fifty-three operators were surveyed online, with an additional eleven one-on-one interviews.    This resulted in a very interesting cache of data from a variety of operators and service providers, worldwide.  I intend to publish a number of blog entries, based on the results of our survey.  This one is the first.

You can pick up your PDF copy here.

Let’s take this opportunity to now focus on a few areas that are of interest.  Many people have asked me over the last couple of years: “Bill, what is your vision for IPX?”  My answer has been relatively the same.  I envision IPX as the central, global backbone connecting MNOs and other accepted service providers, cloud services, and enterprise and providing intelligent hubs for a variety of interworking and interoperability functions.  What this means is that the IPX is and is becoming an absolute core function for many participants.  Our survey results do certainly lend support to what the IPX has become and what our vision is. 

As far as I know, this is the first time that MNOs around the world have been requested to participate in an in-depth survey of their IPX awareness and potential.   I am certainly encouraged by these results.  For example, just over half (51%) of the respondents define the IPX as ALL of the key definitions of an IPX including “An easy way to deploy end to end IP on common standards,” “a cost-reduction measure,” “a means of ensuring service quality,” and “a route to 4G.”   This shows that our (and others) education of the marketplace pushing the benefits of the IPX have paid off.

In terms of vision, the survey clearly shows that inter-working between Long Term Evolution (LTE) networks will be a significant driver of IPX leverage by mobile operators.  A key element cited will be LTE Roaming agreements.  Today, there are only a handful of operators with LTE networks, but over 63% of the respondents noted that IPX becomes essential in just 1-3 years.    When asked about the benefits that the IPX offer for various next generation services such as LTE Roaming, an overwhelming majority cited various positive benefits with the largest number citing cost reductions as a key benefit.

One respondent noted that “LTE roaming is imperative to overall LTE success.”  Many noted that the managed QoS of an IPX for LTE roaming were key benefits.   One major carrier stated that LTE Roaming “creates a cloud of on-net data roaming MNOs, thereby making it run on a managed pipe, rather than on an unmanaged GRX tunnel.”    Another respondent got into details and stated that LTE roaming will further accelerate once Diameter inter-working is proven.   They also noted that the integration of a clearly defined Diameter roaming solution that supports inter-working with the existing 3G environment as a perquisite for larger uptake.   A few others also noted that the support of Diameter on the IPX would be key elements.

We also asked if there were IPX benefits for IP-based signaling.  Again, well over half of the respondents noted a variety of positive benefits for IP Signaling, enabled by the IPX for next-generation services.  “A single IP connection, underpinned by policy control between network operators” was how one respondent deftly summed up the benefit.   Another indicated that “aggregated signaling, reducing network load and higher network resiliency and redundancy” is a primary IP signaling benefit.  Still several others cited more reliable and secure connections along with bandwidth savings.  One should note that “signaling” today is already supported on the IPX, based on transporting GSM MAP (the SS7 application layer) over IP (AKA SIGTRAN).    Next generation services will use a protocol called Diameter (defined by RFC 3588).  Diameter has been designated as the chosen signaling protocol by 3GPP to support so-called 4G (or LTE) services (outlined in RFC 5516, for those, so technically inclined).   Diameter was chosen based on the fact that is capable of managing a continuous flow of data between a complex mesh of network elements.  

Diameter servers/policy exchange controllers will be attached to IPX networks to provide a signaling and authentication location for multiple mobile operators to connect to in order to validate subscribers’ capabilities in roaming scenarios as well as many other scenarios.  As within next generation networks, Diameter will also be used to set up and negotiate a variety parameters and authentication for most operator to operator engagements – whether that is voice, video or some other communications. 

We had also asked the respondents a more open-ended question around what did they expect from an IPX.  In fact, the question was really not targeted towards next-generation services, but what did they expect from an IPX, today?  Here, we can definitely say that the response was both a mix of services available today (such as SIGTRAN ), voice services, as well as content delivery, but quite a few people really gravitated towards services that are not yet widely available.   Quite a few noted  an IPX should provide access to multiple types cloud services and even mobile payment services.   Cloud services available today including Blackberry® cloud connectivity were mentioned by several respondents.   A significant percentage also mentioned RCS/RCSE, multimedia, and video as well has HD Voice services. 

These very varied responses indicate it is clear that the IPX really is viewed by the global operator community as a central, global backbone connecting MNOs and other accepted service providers, cloud services, and enterprise and providing intelligent hubs for a variety of interworking and interoperability functions.  So our vision is not off-base at all. 

When we first conducted this survey, we knew that the global operator community viewed the concept of an IPX with mixed notions – of what it really is, its benefits, and its drawbacks.  Consequently, it is very satisfying to read these results and know that the vast majority of the global telecom community believes what we believe.  Our own experiences in some specific markets with certain operators certainly had given us some insight, but to more fully query over three hundred operators  — many of them still years away from leveraging  an IPX – has really helped us to tailor our IPX solutions to match what the requirements are now and what they will become in the future.

In future entries, I’ll take a look at some other elements of our survey and what they mean to industry.

Not by a long shot.   But, to read the various headlines such as from BBC, or FierceContent, (and quite a few more — not all of them, mind you, but quite a few) you might get the idea that here is something that will be the true “SMS killer.”  Notwithstanding the over-imaginative headlines, I think Facebook Messenger is nothing more than an expansion of the popular online-based Facebook “chat” service.  I would suspect that this is more of a threat to various Instant Messaging (IM) services than it is to SMS.   The problem with IM is that the various communities have never really been interoperable with one another (which makes for good business for products such as Trillian by Cerulean Studios – users may sign into multiple IM communities using a single client or app).

When we go beyond all of the hype and the fact that is a 2-way messaging capability on a mobile device, what we have here is that Facebook Chat/Messenger is simply another IM Community – albeit a very large and powerful community.  Most IM services offer interaction to SMS – and Facebook Messages is no exception.  Many people are already familiar with getting SMS from the Facebook short codes.   In the case of the new Facebook Messenger app – it enables the Facebook community to interact with their community via a dedicated app.  Facebook Messenger is certainly a nice new expansion for the Facebook community.   But it is far, far from an “SMS killer.”

To call a service an “SMS killer” is one thing, as these writers claim, but many ignore that this service actually leverages SMS – in fact SMS short codes.  I am not saying that Facebook themselves are making this claim – not at all that I am aware of, but there are many who are writing out there that also claim that Apple iMessage – when it launches is part of iOS 5, this fall, will also be an “SMS killer.”   Again, not so fast – and don’t forget – that iMessage will send its messages via SMS, if the destination is not an iOS device!   Again – a closed community, for the most part – this time, among iOS devices – that uses SMS to reach non-iOS devices. 

Recall, in a previous blog entry, I talked briefly about the Beluga app – a closed group messaging application that used no telephone numbers – consequently, it is quite different than the various TN-based group messaging capabilities that some NUVOs have launched.   Beluga was acquired by Facebook and looks to be very much integrated into the app and group messaging service that was launched, yesterday.  This app simply confirms that Facebook recognizes that the mobile ecosystem is where they need to be.   I would expect many new and innovative things from Facebook, centered on this communications app.  But an SMS-killer, it is not.   Certainly, there may be some slight cannibalization – whereby users cease to use a mobile operator’s SMS for this – but, as I’ve written about many times before – the NUVOs have long since providing alternative and true SMS-interoperability – something that Facebook has not reproduced here.  And while 750 million users is nothing to sneer at, the global SMS community can reach as many as 5.2 billion subscribers, with an average of 70-80% of subscribers in many markets, heavy users of SMS.

Finally, let’s remember that to us within this industry, we differentiate between a real SMS vs. a “text” sent to another person.  Most users do not differentiate, but they do know how to address messages to other people and they will learn to use these apps and capabilities, if they provide the functionality they are looking for.

Facebook Messenger is certainly not an SMS killer; it actually uses SMS (and has, for quite some time).  But so will iMessage and so does the IM services of MSN, AOL, and Yahoo IM, to name a few.  The point is, that technology behind “texting” or “messaging” is evolving – whether from NUVOs, giant social networks, IM communities, or the MNOs, themselves.   Let’s not rush to judgment and call something an “SMS killer,” just because it does not outwardly use SMS or is not SMS-interoperable.

For those of us who closely watch the mobile messaging industry, SMS, the crown jewel of many operators’ data ARPU results is undergoing tremendous change.  This is a natural evolution instead of a revolutionary change.  In previous blog entries and articles, I’ve written about the NUVOs – (e.g. Network Unaffiliated Virtual Operator).  They are sometimes called Over-The-Top Service providers or App-based SMS or simply messaging providers.  I’ve also differentiated the true app-based SMS providers, offering an alternative SMS application with a fully functional E.164 telephone number vs. those that are device app to app and do NOT interoperate with the rest of the telecom industry.   A “true” NUVO interoperates with the remainder of the ecosystem.  That is a key differentiator. 

In recent months, there have been some indicators that have made many think that because apps like WhatsApp or Kik are out there, that they are going to fully replace SMS.  I’m sorry, but that is not the truth… BUT, there is a caveat to that.  I’m going to quote the article KPN Outsmarted by Smartphones by Archibald Preuschat (The Source, from the Wall Street Journal): 

“Text messages, a killer application which for years have generated a decent revenue stream for telecom operators, has become increasingly unpopular in the Netherlands. Smartphone users here prefer to use instant messaging on their devices, like BlackBerry’s Ping or the WhatsApp application which runs on different smartphone operating systems, including Apple’s iPhone. The use of instant messaging for no extra charges, if users have a data bundle, is widespread among young users but not isolated to them, KPN said.

As a result of this trend, KPN’s Dutch mobile service revenue dropped by 8.1% in the first quarter.”

Wow!  What has happened here?   Why is this happening to KPN and possibly other Dutch operators?  I have a theory. 

App based chat or “messaging” programs such as Kik and WhatsApp do not interoperate with the mobile messaging ecosystem.  A Kik or WhatsApp subscriber cannot send a message to a Vodafone, KPN, Verizon, T-Mobile or of the other 5.2 billion subscribers through SMS, addressed by their phone number.  But in many countries in Western Europe and around the world the mobile operators have made it difficult for new entrants (and I’m talking about NUVOs) to acquire phone numbers AND to exchange “domestic” traffic with the mobile operators in their country. 

Why is that?  For one, all of the MNOs are generally GSM operators – they connect to each other bi-laterally via SS7.  They only use messaging hubs for international traffic – not national traffic.  A new entrant has to be accepted (if they can get numbers) and be viewed on the same playing field as the mobile operators.  This is why it has been extremely difficult for NUVOs to get a foothold in Europe and most of Asia, like they are in the United States and Canada.  But, the non-NUVO, app-only-based chat programs such as WhatsApp, which was specifically cited in the article, are popular, as the subscribers want lower cost or free messaging that is now readily available on Smartphone and other connected devices.  The only way for the non-interoperable apps to work is when both parties are using the apps. Telephone Number based NUVOs are not an option, here. 

So, I bet you’re thinking now… How will allowing NUVOs into the marketplace help KPN and other mobile operators?  For this theory, I am drawing from the recent experience of the US operators and trends that I have seen emerging in the US market.

In the last quarter, our messaging traffic statistics has shown that the US operator traffic grew approximately 3% over the 1^st quarter.  That’s good, steady growth.  But, if we drill down, and look at how much of that messaging growth was due to NUVOs being in the market, the results are startling.  My estimates show that overall; approximately 2/3rds of that 3% growth was due to MNO to NUVO traffic.  In fact, some US carriers would have shown a quarter over quarter DECLINE in messaging, if not for the MNO subscribers sending SMS to NUVO subscribers!  

Thinking about it, it makes sense.  US NUVO traffic from MNOs to NUVOs is now well over 1 billion messages per month – accounting for 2-3% of the MNOs outbound traffic to other operators.  Inbound NUVO traffic to these operators is about the same, indicating a balanced ecosystem.  Sure, there are subscribers using NUVOs instead of the MNO’s messaging services, BUT as many or more are using NUVO services on devices other than mobile phones – iPod Touches, iPADs, tablets, even PCs – this simply increases the “universe” of available destinations for all – including the US MNOs. This is true Person to Person traffic.  Even most NUVO users on mobile devices keep their MNO-supplied messaging services and use the NUVO as a 2^nd number as many like to segregate their messaging traffic. 

In Verizon’s recent Q2 earnings discussions, they noted that Verizon Wireless’s data-ARPU was $5.5 billion, up $ 1.1 billion or 22% over the 2^nd quarter of 2010.  Furthermore 39.5% of the total ARPU was data and smartphones were at 36% of the subscribers, up from 32% in Q1.   AT&T posted a 23.4% growth in wireless data to $5.4 billion. 

People want to use whatever telecommunications medium that is popular to reach family and friends – whether that is voice or messaging.  If a messaging medium like SMS comes along, the users are going to assume that it is and should be ubiquitous.  In markets dominated by GSM-only operators, NUVOs are not an option for the myriad of new connected devices that are not smartphones – thus subscribers and non-subscribers alike have no choice but to turn to non-SMS “messaging” apps.  And that WILL cannibalize SMS revenues,  which in turn can lower data ARPUs and can even cost jobs. 

In markets dominated by GSM operators, all “true SMS” is only for GSM operators’ subscribers.  This then completely leaves out the millions of devices that are connected, but cannot interoperate with this GSM-only SMS ecosystem.  To me, that is a problem with unintended consequences.  The users of these apps and devices will turn to their only choice –  non-interoperable solutions (e.g. Kik, WhatsApp, and others).

My recommendation – make it easier for NUVOs to enter the market and assign local phone numbers to apps and devices.  Be open to allowing the NUVO (either directly, or through one of the messaging hubs) to interoperate as if the NUVO were another GSM carrier.   Yes, there will be some cannibalization of SMS revenues,  but the overall universe of SMS-enabled devices will increase substantially.  In fact, some NUVO demographics show that they are tomorrow’s mobile phone subscribers.  

I recently had a look at some rankings of “social networking” apps across both Android and iOS devices in the United States.  The true SMS-based NUVOs all ranked considerably higher than ALL of the non-SMS messaging providers WhatsApp and Kik.  The rankings were based on both app downloads and active users of the apps.  This clearly shows that consumers wanted the messaging apps that were interoperable with the rest of the existing SMS ecosystem.

What this means is that there will be more SMS-enabled devices in the marketplace.  Subscribers will send more messages, which can help recover some of the lost messaging revenue.   

The future should be bright for SMS.  Yes, it is a very mature medium and it will not grow forever.  It is evolving and both MNOs and NUVOs alike are showing really strong, innovative features.  SMS isn’t done – by a long shot.  Yes, there are new players, but mobile operators should not fear them, because, as the current data shows, they can actually help the entire market.

Now that the wraps are off iOS 5, we can start to review what some of the new features and apps will do for the rest of the telecommunications ecosystem.  Since we are a messaging-centric company, among other things, I thought I’d take a few minutes to look at the potential impact of iMessage and what it has the potential to do to SMS and MMS.

First off, iMessage is a closed IM/messaging service between iOS devices – namely iPADs, iPod Touches,  and iPhones (running iOS 5).  So, in a way this is no different than WhatsApp, Beluga (group messaging) and other similar apps.  Note that it is NOT interoperable with Android, Blackberry, Windows and other smartphone Operating Systems and it does not interoperate with the 5 billion SMS capable devices out there today.

Still, in markets where iOS is dominant, you might find some cannibalization of SMS as well as MMS when multiple users with iOS devices begin to use iMessage vs. SMS to text to one another.  iMessage has implications in the Enterprise as well – as there are a variety of new iOS 5 APIs, I would presume, many are around iMessage.  It supports both delivery and read receipts, secure encryption and conversations can be pushed to multiple devices.   iMessage works on both 3G and WiFi networks.

Almost 10 years ago, a handful of companies, including InphoMatch (a predecessor to Sybase 365)  pioneered hub-based SMS interoperability.  Now, messaging hubs account for almost 5 billion messages per day – within the United States and globally.  MMS interoperability via messaging hubs, was first launched by InphoMatch (then, becoming Mobile 365) in late 2004.  Today, mobile messaging has become the most ubiquitous non-verbal communications medium in the history of mankind.  Nothing, not IM, not the various smartphone messaging apps have even come close to cannibalizing this service.  iMessage WILL have some impact, in specific markets, but remember; most of the world still uses and will continue to use SMS for a long time to come.

Since the iPhone 4 was launched, we do not have an interoperable FaceTime (iPhone’s proprietary video chat), even though it was supposedly built with standard interfaces.  But the video chat ecosystem is very weak, with many other incompatible services.  SMS and MMS have a huge global ecosystem in place – one that even Apple, with all of its rather closed garden approach would do well to interoperate with.  Still, given their history with FaceTime, I would not get my hopes up just yet.

Now, don’t count out Android yet, either.  Remember, Android is owned by Google and Google has Google Voice, which includes both Voice and an SMS that is interoperable with the P2P SMS ecosystem. This is why NUVOs are important and should be carefully courted by the existing telecommunications ecosystem.  They are interoperable with everyone else – they use Telephone Numbers as universal addresses and are not limited to a closed system of devices or operating systems.

If iMessage does cannibalize SMS for NUVOs and Mobile Network Operators (MNOs), then by how much? Let’s look at the numbers.  In the United States, ComScore just noted that the Apple Smartphone platform moved to 2^nd place, ahead of Blackberry for 26% market share of the smartphone market.  ComScore, elsewhere noted that approximately 75 million Americans were using smartphones – so that is 19.5 million iPhones in the USA.  At this point, we are just talking about smartphones – no tablets, or iPod Touches yet.  Our numbers, along with those from Informa Telecom & Media note that Americans send, on average, around 950 to over 1000 messages per subscriber per month. Various statistics have shown that smartphone users are, by far, the heaviest users of SMS.  For our calculation, let’s call this 1050 messages per SMARTphone subscriber, per month.  So the potential impact is approximately 20.475 billion SMS messages per month (or more precisely SMS and MMS messages) that might disappear, replaced by iMessages.

CTIA, in their Semi-Annual Wireless Industry Survey, estimated that in 2010, 2.052 trillion SMS messages were sent in the United States.  That’s 171 billion messages per month.  Then our messaging impact could be as high as approximately 12% of the total SMS.   That doesn’t sound quite as bad, does it?

But that’s not the whole story. Apple iPhone users are not going to suddenly stop using SMS.  Because the 12% impact assumes that.  In reality, Apple iPhone users will still use SMS to reach the other 283 million U.S. non-Apple mobile phone users, as well as billions of other people around the world, not using iOS products.  So the real impact is probably at most, closer to 1-3%, if that much, given that these users will continue to send SMS.

I used the United States as an example, but the iPhone is now a worldwide device.  I would expect similar impacts in other iPhone/iOS heavy markets.

Today’s iOS and iCloud announcements will further impact the mobile ecosystem.  I’ll have more to say about several of these new features and what they mean to messaging, mobile enterprise and other areas in the coming weeks.

At the risk of sound redundant, we want to continue to underscore the value of SMS as a communications medium in trying times.  Apparently, according to news reports, a man was rescued after he texted his friend: “I’m alive.”

As with many world and regional events during this year and previous years, the devastating tornado that struck Joplin, Missouri on Sunday the 22^nd of May, 2011, resulted in a surge of attempted communications as friends and families react and attempt to contact loved ones.  In such regional or localized situations, it is well known that many communications facilities would be overwhelmed or rendered unusable.   But, given the highly redundant architecture of today’s mobile networks, one would expect that many tower locations would be spared and potentially continue to operate.  Additionally, from a more regional sense, the wider region should continue to support increased communications traffic, immediately after the event.

After the Joplin, Missouri tornado, we were able to compare the SMS traffic, originating from area code 417, immediately before and after the event with the previous two days.   As expected, in the minutes leading up to the tornado hitting at approximately 5:40PM CDT, the SMS traffic was within “normal” amounts for that time of day.  By 6:00PM, traffic was up 30% and by 7:40PM, as word spread, SMS traffic peaked over 106% of normal and remained high throughout our evaluation period.  In our sample, all US Tier 1 operators were represented, as were several NUVO and Tier 2 operators that utilize 417 area codes.

While we didn’t drill down to specific Joplin area (NPA-NXX), the area wide traffic still surged dramatically, underscoring the viability of SMS as an urgent and reliable communications channel.   There were other storms in the area.  Springfield, Missouri, the largest population center in area code 417 was also struck by severe weather, as were other communities. 

The main Joplin tornado warning was issued at 5:17PM, after a separate warning for “NE Joplin” on a different storm at 5:09PM.  We did not note any unusual increase in Person to Person messaging, leading up to the tornado starting to hit Joplin and immediate areas. 

Although extremely tragic, unlike other events, we have noted, this is an event with a very localized impact.  Outside of area 417 and a few adjacent area codes – especially in Okahoma  — overall messaging was not statistically impacted.  Still as our graphics show, the localized SMS traffic effectively doubled after that – whereas voice – both fixed and mobile may have been disrupted, due to communications infrastructure damage.   SMS can work with lower signals, when a mobile voice call may not be possible.

For alerts, do yourself and family a favor and please sign up for severe weather text alerts.  Places like the Weather Channel and many localities offer these.  Simply Google:  “severe weather text alerts.”  Without ample warning, the situation in Joplin and in Alabama, last month, would have been much worse.  SMS alerts can reach you when you are away from home. 

Finally, don’t forget that you can always text REDCROSS to 90999 to donate $10 to help the Red Cross support relief for recent tornado victims across the country as well as the recent flooding victims.