Vanished! Niagara Networks withdraws its application from AWS Auction

Well this story just took a sad turn.  Niagara Networks has withdrawn its $881M deposit and application for the upcoming wireless spectrum auction.  This leaves just a few small new entrants such as the group led by John Bitove.  Although Paul Allan is one of his investors, the group, called Data & Audio-Visual Enterprises Wireless Inc. is far less interesting as a new entrant as Niagara would have been simply because Bitove’s group has less of the spectrum to bid on and MUCH smaller budget.

Click here to read the story from the globe and mail and I’m sure the folks over at www.wirelessnorth.ca will have more of the scoop soon.

I’ve become resigned to the fact that we will not have a new national wireless carrier and therefore not have any significant change to the industry.

Maybe its time for me to dig out that old MVNO business plan and refresh it.  I can resell some of the spectrum that is never going to get used:)

Why I don’t hate the iPhone but don’t own one.

Judging by the comments on my last post,  “Android may catch RIM and Apple looking the wrong way.”, most people think the Apple machine will continue to roll over the mobile industry crushing all comers.

I just want to set the record straight here, I don’t dislike the iPhone.  I think its a remarkable device that has certainly set the bar in terms of user interface.  I just don’t think that it will become the monster everyone is making it out to be.  The growth of the iPhone will be constrained by a number of factors:

•  Contracts – Anyone who bought a blackberry or other mobile device this year or last probably signed a contract.  This makes it hard for Apple, or anyone else to entice them to leave their carrier because of the high fees involved even if the iPhone 2.0 is cool as hell.
• Subsidies – In Canada right now I can get four Blackberries for free with a two year contract and service plan.  Why would I spend over $2000 to equip my team or family with iPhones?
• Geography of Growth – emerging markets like Asia and Africa are the growth centers of the mobile industry.  These are poorer regions that won’t opt for or be able to spend huge money for an iphone when a free or cheap Nokia or Samsung (running Android) will do.

I wasn’t able to find any statistics on iPhone sales that were more recent than January, however it appears that somewhere between 4-5M units have been sold to date.  RIM by comparison has over 13M current active units worldwide.  A company like Nokia dwarfs everyone.  Nokia shipped over 40M units in Q4 2007 alone!

Having Apple in the mobile space will do a lot of good but the fact is that they will always just be a player and never run the game.

Android may catch RIM and Apple looking the wrong way

Apple is great at developing products that capture the imagination of the consumer. RIM has dominated the mobile email space beyond any expectations. Both are gearing up to battle each other. Apple recently launching exchange support for the iPhone and RIM incorporating more media and internet friendly applications to their Blackberry devices.

Google has to be real happy right about now. Both RIM and Apple have been so busy with each other that they have all but ignored the fact that Google’s Android operating system for mobile devices will debut late this year.

Android could be the sleeping giant that will soon wake. With new open access rules in the US, the staggering pace at which Google is able to launch mobile applications, and the momentum that the Open Handset Alliance is gaining, Android is poised to be the next….well….Google.

The open access rules that Google helped write and triggered while bidding on wireless spectrum in the US recently will do alot more to pave the path for Android than most people realize right now. That’s because the Android OS will be a very open system. In fact, Google has already launched the SDK. Apple took almost a year after the launch of the iPhone to do this but restricted the way applications can be sold to users so the openness factor is in question here. Google states on the Android website that “All applications are equal” . Developer are free to create whatever applications they want. Its a familiar approach, one that has paid off big on the past for Google and I think will again.

In the past several weeks, Google has launched some interesting mobile applications. First was the announcement that Google Gears will now be available for mobile devices. This product will allow developers to create mobile web applications that work even out of coverage. They hinted that this will be available for Android devices soon. Next, they announced that they had improved the interface for gmail on the iphone so that it was faster and more intuitive. Then they unveiled new versions of Google maps for mobile that will act as “native” applications on the devices they were built for. This means a great user experience no matter what handset you’ve got. Imagine when Google can put all this development firepower into a handset where they provide the OS! I see a great device with native applications for gmail, maps, location based services and a host of others. That’s pretty powerful stuff.

The Open Handset Alliance is a group of more than 30 technology and mobile companies that have come together to “accelerate innovation in mobile and offer consumers a richer, less expensive, and better mobile experience.” The group is expecting to have the first handsets deployed sometime this year and the member roster is a who’s who of the mobile industry (minus RIM and Apple of course). With Google getting so many operators and device makers on board so quickly the only way for the the Android project to fail would be if the OS just sucked. Somehow I think this is unlikely.

In my opinion Google has done everything right so far. They’ve stayed under the radar and moved the industry to where it needs to be for their product to dominate.

Note to Jim Balsillie and Steve Jobs, stop looking at each other and start paying attention to Google before its too late.

Niagara Networks: Playing a new tune

With the recent disclosure that almost unknown Niagara Networks had forked over approx $800M to enable them to bid on all the the spectrum in the upcoming Advanced Wireless Spectrum Auction (AWS), a lot of people were asking questions. Who the Crap is Niagara Networks? Where is the money coming from?

Industry Canada is set to release more info on March 31 but I thought that I’d engage in some good old fashioned speculation.

I just read through Niagara Networks comments to Industry Canada as part of last years auction consultation process. You can get a copy here. I wanted to point out a couple of things that caught my eye.

– Niagara Networks sees themselves as market disruptor (duh)

– They believe that only competitive prices and advanced services will drive growth of wireless in Canada. And

– They will most likely have an open network.

Having worked at two of the major carriers, I can tell you that Niagara correctly points out that, “There is no incentive to pass along the benefits of decreased capital expenditures as a result of increased efficiencies to the consumer. That does not happen in a truly competitive market. ” Both the Carriers I worked for were engaged in extensive cost reduction activities while actually Raising Prices.

In terms of creating growth, Niagara’s position could be summarized by this excerpt, “Wireless services are a mature market, the remaining 40% of Canadians need further incentive to become connected. In most cases, these consumers do not
see the benefit verses the cost. “

In my mind, this thinking could lead to an innovative business model that embraces things such as openness, collaboration, and a focus on services beyond plain voice and email.

Whatever happens, it’s clear that Niagara Networks is determined to be a player in Canada. I’m going to continue to follow the story and post my thoughts here.

PS: Hey Doug, how about granting me an interview? Maybe a job interview:)

Who is Niagara Networks?

In a surprising turn of events, Niagara Networks has positioned itself ahead of all new entrants in the upcoming Canadian Wireless Spectrum Auction. The stealth company put down an astonishing $881 Million dollar credit deposit, which enables it to bid on enough spectrum to create a formidable national network.

I couldn’t find much on the company other than the name of its president, Douglas Evashkow and that its a Toronto based company. I did however find this quote from Mr. Evashkow from Sept of 2007.

“A big part of the story is enabling a mobile workforce.” Says Douglas Evashkow, president of data services startup Niagara Networks: “The market for mobile data in this country right now is nothing compared to what it’s going to be. Over the next 10 years, the industry is going to generate at least $200 billion in revenue.”

The full article text is available here. The article also makes reference to the fact that Niagara is using private capital to finance their bid.

I’m actually excited for the first time about this auction as it appears that we will get a new national player with (apparently) the money and drive to create a network based on serving the needs of business.

It sounds like Niagara’s president is talking about more than a “dumb pipe” network that restricts application usage and has hideously expensive data rates. I hope my guess is right.

Wouldn’t that be a nice change for Canadians?

Ecosystems of Applications

With so many great mobile applications out there, why have small and medium sized businesses continued to do business as usual and not adopt these great solutions?

In 2003, I founded Diversiform Wireless Solutions and we tried (unsuccessfully for the most part) to drive adoption of mobile solutions such Field Force automation. Almost all the clients we worked with saw the benefits and the solutions we did deploy were of excellent quality (some are still in use today). However, the lack of affordable tools put our stuff out of reach of most small prospects so business wasn’t good.

Today is a different story altogether. Applications are mostly Software as a Service and come with low monthly fees. Devices are better and cheaper than ever before and Networks are faster.

Even with all these factors, mobile business applications make up just a fraction of carrier revenue in Canada. Again I ask, Why?

In my mind, no provider has yet cracked the secret formula of convincing 45+ year old business owners that new technology is their friend. These owners/managers grew up before there was a computer in every home and they are used to doing business the way they’ve always done it.

There are of course exceptions as we’ve worked with a few really forward thinking clients over the years. For the most part though many still do not get it. Mobile technology can improve productivity, reduce costs, speed billing cycles, all things small businesses want.

I’ve realized that to be successful, I have to be part educator and part salesman. I have to have great products that are:

– Easy to understand

– Easy to Use and

– Have tangible benefits for reasonable cost

I then need to take my message to people and show them the benefits I outlined above. So that’s what I’m going to do. I hope to create and ecosystem that will support the great stuff we’re building.

see you out there!

Canada Wireless Auction….The Kansas City Shuffle

A recent announcement by the Conservative federal government outlined a new policy for the upcoming wireless spectrum auction. Industry Minister Jim Prentice, was quoted as saying “Our goal at the end of the day is lower prices, better services, and more choices,” click here for some CBC coverage.

Now, on the surface this would seem to be a great thing for Canadian wireless subscribers, however several factors will result in very little change to the industry post-auction.

Firstly, by only setting aside 40% of the available spectrum and restricting these to regional licenses only, the government has been able to allay fears from the incumbents about a new national player. Even though Mr. Prentice said the several regional players may be free to “join together to form a new national cellphone provider”, a partnership of multiple players, wallets, and business plans would be almost impossible to achieve before the May auction. (although I encourage potential bidders to try hard)

Secondly, the winner of the set aside spectrum will not have enough of the valuable resource to launch any real 3G services without acquiring more licenses. Simple voice, text and data services will be the only available offerings. This is too bad as next-generation services would almost certainly be an attractive feature for a new entrant to have.

Also, the potential bidder list is filled with current telco and cable players such as MTS Allstream, Quebecor Media (Videotron), and Eastlink. Videotron and Eastlink are cable providers looking to add that “quadruple play” element to their offerings, while MTS will use any new licenses to compliment its business telecom porfolio under the Allstream brand. None of these companies would be considered “market disruptor’s” rather the opposite. These firm have, for years, competed in regulated markets with Rogers, Telus, and Bell by price matching, and slick marketing campaigns rather than real innovative product offerings.

Lastly, by not regulating the roaming rates that existing carriers charge to new entrants to use their networks and cell tower locations, the government has effectively killed any chance of lower prices. The carriers have to only meet the term of “reasonable” when negotiating rates. As anyone who has ever sat in a room full of lawyers can tell you, reasonable is extremely open to interpretation and this loophole will no doubt be exploited be the incumbents to the fullest extent.

The government has done a great job at creating the perception that it is for “openness” and “increased” competition while, at the same time, balancing their policy with enough loopholes to keep the big guys happy.

Misdirection, bait and switch, or The Kansas City Shuffle……..take your pick.

Welcome!

Welcome to initial post of my new blog Mobile Connections. Now that I’m freshly removed from the all-consuming start-up world, I’ll have time to bring you news and opinion on the mobile industry. As an 8 year mobile industry veteran, I have been involved in cutting-edge projects in wireless data, mobile marketing, and others.

I’m busting with opinion on this industry, one that is poised for explosive growth as new products, operators, and applications hit the market. I hope you enjoy.

Tom