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All articles are available for download at www.connect-world.com CONTENTS
National development
Digital Britain 3
by Lord Stephen Carter, Minister for Communications, Technology and Broadcasting,
Department for Business, Enterprise and Regulatory Reform (BERR)

Romania and the EU innovation agenda 6

by Gabriel Sandu, Minister of Communications and Information Society, Romania
3 6 9 11
Regional development and innovation
Spectrum-driven innovation - Europe’s great opportunity 9
by Dániel Pataki - President of the Hungarian Telecommunications Regulatory Authority,
NHH (Nemzeti Hírközlési Hatóság) and Chairman of the Radio Spectrum Policy Group
(RSPG)
14 16 20 22
Regulatory affairs
Promoting telecom competition in Albania 11
by Ilir Shehu, Chairman of Board and Executive Director, AKEP, Electronic and Postal
Communications Authority, Albania

26 29 32 34 Digital dividend
Dividing the ‘digital dividend’ 14
by Professor N. Alexandridis, President, Hellenic Telecommunications & Post Commission
(EETT)

Satellite - regional development

37 41 44 46 Closing the digital gap in Europe 16
by Aarti Holla-Maini, Secretary General, European Satellite Operators’ Association (ESOA)

Internet markets
Innovating to reach the consumer 20
by Dana Dunne, CEO, AOL Europe

ICT innovation
Innovating at the speed of life 22
by Larry Stone, BT President Group Public and Government Affairs

Complexity and innovation in the connected era 26

by Stephen Murdoch, Vice President & General Manager, Large Enterprise Business Unit,
Connections Europe, Middle East & Africa (EMEA), Dell
2
From the Editor-In-Chief’s desk
by Fredric J. Morris Innovation stimulus
The EU innovation agenda and recovery package 29
2 by Katie Miller, Director, Government Relations, EMEA, Nortel
Imprint

Subscription
48 Mobile service
Mobile service intelligence 32
by Mark Quinlivan, CEO, Carrier IQ
Advertorials
27
SES Mobile Internet
Mobile Internet opportunities abound 34
Advertisements by Sean MacNeill - Vice President & General Manager, Global Services and Support,
IFC Openwave
Advanced Digital Broadcasting SA
5
NDS Satellite spectrum
8
tmforum Mobile satellite and spectrum harmonisation for innovation 37
13
ITU World 2009 by Stewart White, CEO, Stewart White Consulting
18
Frost & Sullivan GIL 2009 : Europe
23 Mobile data
CommunicAsia 2009
MECOM 09
30 Change today for tomorrow’s demands 41
35 by Ben McCahill, Director of Mobile Strategy, Tellabs
Supercomm
38
European CIO Digital advertising
43
Expo Comm India 2009
IBC
Advanced advertising - from concept to product 44
Ericsson by Tim Spencer, President, Sigma Systems
OBC
Telefonica
Internet Privacy
Internet privacy? 46
by Andrei Korobeinik, CEO, Serenda Investments OU

Europe issue II 2009 n 01

 CONNECTIONS
Connections

The theme of this issue of Connect-World Europe is ICT and the EU

Innovation Agenda.

The EU has actively promoted innovation of all types through a series of

programmes and conferences. The EU has committed over €2 billion to
its plans for ‘Inventing the Future’ by promoting research and development
in ICT, including its use in such leading edge fields as ICT-bio, photonics,
robotics and cognition. The far-reaching EU development programmes
promise to open new markets, new sectors, and bring new players.

This issue of Connect-World Europe tracks the progress and the promise of
some of these important EU initiatives.

Fredric J. Morris,
Editor-in-Chief,
Connect-World

Editor-in-Chief: Fredric J. Morris fredric.morris@connect-world.com

Publisher: David Nunes david.nunes@connect-world.com

Editorial Department: editorial@connect-world.com

Connect-World is published under licence
by WORLD INFOCOMMS LTD Production Department: production@connect-world.com
Executive Office:
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London E16 2DW, United Kingdom
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means elec-
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caused, resulting from the use of the material can be accepted by the publishers or others associated with its preparation. The publishers neither
accept responsibility for, nor necessarily agree with, the views expressed by contributors.

ISSN 1468-0211
02 n Europe issue II 2009
 National development

Digital Britain
by Lord Stephen Carter, Minister for Communications, Technology and Broadcasting,
Department for Business, Enterprise and Regulatory Reform (BERR)

The Digital Britain Report describes the strategic approach the government envision taking
to ensure “Britain’s place at the forefront of the digital economy”. It makes clear the need for
a fundamental upgrade of Britain’s wired, wireless and broadcasting network infrastructures.
The plan calls for establishing universal broadband access within five years; it specifies
minimum broadband speeds and the infrastructure needed to deliver broadband services
throughout the country. Private investment is thought to be sufficient to pay for most of the
new infrastructure.

Stephen Carter is the Minister for Communications, Technology & Broadcasting, Department for Business Enterprise and Regulatory
Reform (BERR). Mr Carter served previously in a variety of high-level executive positions including: Group Chief Executive of Brunswick
Group LLP; Founding Chief Executive of Ofcom, the Communications Regulator; Managing Director of NTL UK & Ireland; and as
Managing Director & Chief Executive of J. Walter Thompson UK Limited. Mr Carter is a Past Chairman of the Marketing Group of
Great Britain, Chairman of the Ashridge Business School, a Vice President of UNICEF UK and a Governor of the Royal Shakespeare
Company.

Stephen Carter was awarded a CBE in the 2006 Honours list for services to the Communications Industry. He is a law graduate from
Aberdeen University and completed the Harvard Business School’s Advanced Management Programme.

My goal as communications minister is to
ensure Britain has a clear and achievable
strategy in place to secure our position at the
forefront of the digital economy. There is life
after recession and we must make sure our
companies are ready to take advantage of new
opportunities when the market picks up.
already one of the firm conclusions is that
in order to reach that goal Britain needs
a fundamental upgrade of our wired and
wireless communications and broadcasting
networks. This means action on spectrum,
broadcasting and broadband.
Broadband is becoming an increasingly
integral tool for almost every company. This
demand means that broadband will inevitably
become a core part of the UK’s infrastructure,
just as roads and electricity networks are
today. It is therefore essential that we, as a

The Digital Britain report, launched last
month, lays down the strategic approach
government should be taking to ensure
Britain’s place at the forefront of the digital
economy. Although only at an interim stage,
“Broadband is becoming an increasingly integral tool for
almost every company. This demand means that broadband
will inevitably become a core part of the UK’s infrastructure,
just as roads and electricity networks are today.”

Europe issue II 2009 n 03

 National development
“Economic conditions for investment are now the worst seen in many years, so we must look
at ways the government can facilitate and finance the next generation of broadband without
distorting the market by overlooking monopoly and sacrificing competition for investment.”
nation, invest in high-speed broadband, both
for our immediate economic needs and for
those of future generations.
In today’s economic downturn, creating
a comprehensive and cohesive digital
infrastructure is absolutely fundamental to
our economic development. The debate now
is about how we get there.
The report provides a universal service
commitment, ensuring minimum broadband
connection speeds throughout the whole of the
country. Establishing the correct infrastructure
to deliver this is vital; it features right at the
top of the Digital Britain agenda.
Our competitive market has taken broadband
out to 99 per cent of the country, but speeds
are variable. Last year BT said it would invest
£1.5 billion in next generation services and
Virgin is already in the process of upgrading
its network to 50mbps by the end of this year.
Nevertheless, despite all the planned upgrades
to infrastructure, we can expect only about 96
per cent of the country to be within reach of 2
Mb/s service by 2012.
If we are to achieve the aim of establishing
universal broadband within the next five
years, and maintain Britain’s status as a world
leader in the global digital economy, then
government requires an active and strategic
approach. We need to identify what is
standing in the way of a full rollout and how
to help industry to establish the infrastructure
needed.
In practice, I believe, we will develop
plans for Universal Service Commitment
to be effective by 2012 and delivered by
a mixture of fixed and mobile, wired and
wireless means. The independent Caio
Review, published in September last year,
found that the UK is well placed to deliver
private investment in high speed broadband
networks and the case for major government
intervention was weak.
We also need to address the need for a
Highway Code for our digital transportation
networks. Rather than ‘regulation of the
Internet’, it needs to be something more
delicate that adequately reflects the need
04 n Europe issue II 2009
to create a balance between freedom and When published in the early summer, the full
mutuality, privacy and control and security Digital Britain report will bring together the
and access. This poses a challenge for the government’s contributions in a coherent and
traditional structures and line accountabilities focused form. I appreciate there has been
of government, which, unsurprisingly, are criticism from some companies that we are
not structured around the Internet. They can not acting quickly enough, but it is essential
identify common issues, but these appear that we use this time to work with businesses
in different guises in different parts of many and determine the right course of action.
individual departments; this can result in a The digital economy provides us with the
series of isolated initiatives that fail to deliver opportunity to create thousands of new jobs
a strategic response to the big questions. and we cannot take our responsibility lightly.
n
Economic conditions for investment are now
the worst seen in many years, so we must
look at ways the government can facilitate
and finance the next generation of broadband
without distorting the market by overlooking
monopoly and sacrificing competition for
investment.
Another pivotal element of the strategy will
be making possible the widespread online
delivery of public services, which will require
both the universality of availability and the Connect-World is
universality of participation. Today, the 70
per cent of individuals who are online at
celebrating its 12th
home and up to 99 per cent online at work anniversary
are adapting to the digital world at a much
faster pace than government, central or local, Through the years, Connect-
and their expectations have risen accordingly. World’s authors told of the rise
A gap is opening up between individual of mobile, of fibre, of wireless
citizens’ and businesses’ expectations of what and of broadband; they told of
broadband technology can do for them and the
the dot.com meltdown, of
public sector’s ability to exploit and use those
same capabilities. We need a radical step digital inclusion and conver-
change in the way we think and act to prevent gence, of standards and break-
that gap becoming unacceptably wide. throughs, the rise of IP and
the fall of switching and of the
At present, the take-up of e-government regulatory turnaround.
services by individuals is only slightly
higher than the European average and In every issue of Connect-World
take-up by businesses, particularly small heads of state, ministers and
and medium enterprises, is slightly below
regulators, heads of
average. If we are successful in establishing
universal broadband, the potential benefits to international institutions and
e-government are enormous - especially for a leaders of industry speak of
vast improvement in costs and efficiency. what the ICT revolution, as it
happens, means to the people
This will only work, however, if we in their regions of the world.
can ensure that the entire population is
empowered to access and use digital media.
We must aim for our e-skills to be amongst
www.connect-world.com
the top three globally. We will need to tackle
the issue of why 40 per cent of those who can
get broadband now choose not to take it.
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www.nds.com/convergence
Europe issue II 2009
PROMOTIONAL n 05
FEATURE
 National development

Romania and the EU innovation agenda

by Gabriel Sandu, Minister of Communications and Information Society, Romania

Romania is developing a national ICT policy in compliance with EU policies. The ‘Digital
Romania - eStrategy for an Information Society’ initiative and the National Broadband Strategy
are the keystones of Romania’s ICT efforts. Among its priorities are eGovernment and projects
for education, health, culture and tourism and a portal to integrate all cultural, tourist, historical,
geographical, religious and territorial administrative information. Improved legislation and
infrastructure projects are planned to encourage investment and promote partnerships between
ICT sector researchers and academic institutions.

Gabriel Sandu is Romania’s Minister of Communications and the Information Society. He has been active in politics for the last ten years,
and served as a deputy in the Romanian Parliament until being appointed to his current post. He is currently the Vice President of the
Democrat-Liberal Party. Mr Sandu has also served as a member of the Executive Office of the Liberal Party, as the Vice President and
secretary general of the UFD and as the President of the UFD, Prahova. Prior to his political career, he was the Vice President SC Elvila
International SRL Bucharest, the Chairman of the Tracia Group and the Chief Import-Export Officer at Mizil Relax.

Gabriel Sandu graduated from Academy of Economic Studies with a degree in Economics.

A united European vision is required to
develop our society, to modernise it, increase
its competitiveness and help it grow in
response to the significant transformation
of today’s global economy. To comply with
the EU’s common objectives, the Romanian
Communications and Information Society
policies are changing, in accordance with
Romania’s specific conditions, to better
accompany the changes the Information
Society is imposing upon the European region
and the world.
Romania’s strategic concept
In Europe and throughout the world, ICT
is considered one of the most efficient and
practical means to reduce the effects of the
current global crisis. Today, it is important to
find solutions for the problems that the crisis
is causing by using whatever advantages the
Information Society and new technologies
can bring to create new jobs.
In accordance with our national strategy,
‘Digital Romania - eStrategy for an
Informational Society’, we will be promoting
a number of specific strategies intended to
create opportunities and produce added value
through new and improved information and
communications services. The strategies
will be implemented following concrete
action plans, which will set forth the specific
objectives, responsibilities and the necessary
means for developing an information society
in Romania.
The transition to the Digital Television
Strategy will significantly improve the quality
of services and extend the range of available
services as well.
Widespread access to broadband Internet is
a critical need; our ‘Information Society for
All’ programme intends to double Broadband
Internet access in the country.
The National Broadband Strategy is the
subject of a comprehensive document now
being refined and elaborated. The document
will include an analysis of Romania’s ICT
needs, set forth the general principles,
major goals and strategic objectives for ICT
development, and provide an action plan for
the implementation of widespread broadband

06 n Europe issue II 2009


“The National Broadband Strategy is currently a high priority because it can generate added
value and new jobs. Our strategic action priorities are directly connected to the relevant
European Union anti-crisis programme elements such as investment in developing our
broadband Internet infrastructure.”
access. Taking into account the importance
and large scale applications of this strategy,
we are consulting all the partners and
players in the market prior to completing
the document. In parallel, we intend to
implement the eRomania project - with strong
eGovernance and eTax components - in an
integrated, distinct and coherent manner.
All of these initiatives and actions are being
undertaken as part of our commitments as a
European Union member; we are developing
the domestic ICT market in full compliance
with the applicable European Union market
rules.
Priorities
To ensure the effective and practical
implementation of our strategic programmes
for Information Society technologies, we have
identified several priorities for future action.
Within an integrated framework, our main
priority is to provide all Romanian and
European citizens with access to public
information and give them the ability to
obtain any specific document, instantly, by
using online eGovernment services.
The National Broadband Strategy is currently
a high priority because it can generate added
value and new jobs. Our strategic action
priorities are directly connected to the relevant
European Union anti-crisis programme
elements such as investment in developing
our broadband Internet infrastructure.
Another priority is the enhancement
of integrated services; this will create
conditions for interoperability between the
systems of various national institutions and
the development of both the Information
Society and of a national information and
communications technology (ICT) competence
cluster. The ITC sector has a significant
growth rate and it is an important contributor
to our GDP. It also represents a very
attractive field for both foreign investments
and for players in the local market who
have developed into regional leaders. In this
context, broadband communications represent
an important factor in the progress towards a
new knowledge-based economy; it contributes
to economic development, helps create new
jobs and improves the quality of life.
Together with a number of other public
authorities, we will finalize and implement a
number of eGovernance projects in the fields
of education, health, culture and tourism.
The eEducation project will provide for the
translation all of the school curricula into an
electronic format and will help modernize
educational instruments. The eEducation
project is likely to become one of the most
popular widely used features of the eRomania
programme.
The eRomania project will also create a portal
to integrate all cultural, tourism, historical,
geographical, religious and territorial
administrative information. The portal will
also centralise all types of information useful
to the citizen and give them access to public
electronic services available from national
and local sources.
We are working on a range of projects to
improve legislation and have identified the
infrastructure projects needed to encourage
ICT investors. One of our priorities in
this respect is to stimulate the search for
innovation solutions to market, technological
and social needs by encouraging cooperation
and partnerships between ICT sector research
and development activities and academic
institutions.
Strengthening relations with strategic
operators is an important priority for the
Romanian government, especially during this
time of crisis when it is especially important
to maintain existing jobs and create new ones
by encouraging private initiative.
The digital divide that exists between the
urban and rural areas and between generations
is an important problem in Romania. The
problem of eSkills is a sensitive one; it will
be necessary to educate the population, to
help evolve the public mentality, and to help
citizens understand and develop the ability
to use new information technologies. The
development of user-friendly, native language,
applications and content will be a vital part
of any programme designed to accelerate the
popular adoption of ICT-based services.
Mobile payment
NationalMobilesystems
access
development
The absolute necessity for the insertion of ICT
within the educational process and the lives
of citizens is obvious. The use of information
technologies is making firm progress and
the ability and willingness of citizens to use
these technologies in their everyday lives is
increasing, but an increased focus on training
people to make effective use of Information
Society tools is still a vital priority.
The development of programmes that
promote the widespread use of ICT will lead
to more efficient solutions for many of the
daily problems our citizens face and improve
the quality of the lives they lead. n
Connect-World is
celebrating its 12th
anniversary
Through the years, Connect-
World’s authors told of the rise
of mobile, of fibre, of wireless
and of broadband; they told of
the dot.com meltdown, of
digital inclusion and conver-
gence, of standards and break-
throughs, the rise of IP and
the fall of switching and of the
regulatory turnaround.
In every issue of Connect-World
heads of state, ministers and
regulators, heads of
international institutions and
leaders of industry speak of
what the ICT revolution, as it
happens, means to the people
in their regions of the world.
www.connect-world.com
Europe issue II 2009 n 07
08 n Europe issue II 2009
 Regional development and innovation

Spectrum-driven innovation -
Europe’s great opportunity
by Dániel Pataki - President of the Hungarian Telecommunications Regulatory Authority, NHH
(Nemzeti Hírközlési Hatóság) and Chairman of the Radio Spectrum Policy Group (RSPG)

The EU’s allocation of spectrum to GSM mobile technology provided an enormous boost to
innovation that made Europe the leader in mobile telecommunications for almost 20 years. The
digital dividend - the frequencies freed by the transition from analogue to digital television -
once again gives the EU the opportunity to allocate spectrum in a way that will stimulate
innovation, provide its citizens with access to low cost services and put Europe at the forefront
of the wireless revolution.

Dániel Pataki is the President of the Hungarian Telecommunications Regulatory Authority, NHH (Nemzeti Hírközlési Hatóság) and the
2008-2009 Chairman of the Radio Spectrum Policy Group (RSPG), which advises the European Commission on spectrum and brings
together the EU’s 27 national spectrum authorities. In 2008, Mr Pataki chaired the European Regulators Group (ERG). as the Deputy
Secretary of State in charge of communications, he elaborated Hungary’s new acts on Electronic Communications and on the Post.

Prior to joining the government he held various positions at Total, Andersen and Vivendi Telecom Hungary.

Dániel Pataki graduated from the Budapest University of Economics and completed a postgraduate management program in Paris.

At the end of the 1980s, just as Europe was
on a political push to complete the EU single
market, Member States agreed to reserve
some radio spectrum bands for the exclusive
use of GSM technology.
This decision provided a tremendous boost for
the telecoms industry as it sought to develop
innovative, cheap, but high-quality mobile
communications services across the whole of
the EU - services which whole new swathes
of citizens could benefit from as national
borders were torn down.
These developments ultimately turned the EU
into the world leader in the telecoms industry,
a position it held for the following 20 years.
The importance of spectrum
So, what was the key to this success?
It was, in large part, due to the cross-border
availability of high-quality spectrum, which
drove European telecoms companies into
innovating and developing new technologies
and services. And the pre-condition for this
success was simple: Member States agreed
to coordinate their decisions on spectrum
allocation, rather than taking individual
national decisions.
Why, at that time, did Member States decide
to look beyond national boundaries? To
better understand it, we need to explain what
spectrum is about.
Spectrum is a cross-border resource that
is scarce; it is also a public good. Spectrum
needs to be regulated so it is not wasted, but
in a Europe with no borders, only coordination
can ensure it fully achieves its EU-wide potential.

Europe issue II 2009 n 09

 Regional development and innovation
Spectrum was a tremendous enabler back
in the 1980s. Member States seized their
opportunity to stimulate growth. Today,
Europe’s politicians and regulators face a
similar situation with spectrum, yet this time
the stakes are far higher.
The world is going through a severe recession
that all experts say will last some time. Europe
is losing its leadership role on telecoms;
the United States is leading the fourth
mobile generation, not Europe. The Lisbon
Agenda’s objective to make the EU the most
competitive, knowledge-based economy in
the world by 2010 is far from being achieved,
but now is a time when radio spectrum could
once again spearhead Europe’s innovation
and growth.
Innovation and growth in the ICT sector can
benefit the economy as a whole. To achieve
this, the EU must tackle two decisive,
interrelated, spectrum issues - first, what to do
with the digital dividend and, second, how to
develop wireless broadband?
If we can give a satisfactory answer to these
questions the future of Europe’s ICT industry,
and of Europe’s economy as a whole, looks
promising. The European Commission, well
aware of these challenges, is working on both
issues and plans to come up with proposals by
the end of the year. We, the national spectrum
authorities, gathered together in the Radio
Spectrum Policy Group (RSPG), believe
these issues are of upmost importance and
are committed to shaping the forthcoming
decisions on spectrum.
The RSPG advises the European Commission
on high-level political issues related to
spectrum. Created in 2002 it brings together
the spectrum authorities of the 27 EU
Member States. We act as a platform for
debate amongst all spectrum stakeholders.
We hold a unique position. We are both
technical experts with an in-depth knowledge
of the local market and we have a global
vision of EU spectrum policy and political
issues. We are in close contact with spectrum
users and policy-makers at national, EU and
international levels. We are ideally positioned
to advise policy makers and ensure progress
is made to the benefit of consumers.
Digital dividend
2009 is the year to decide what to do with
the so-called digital dividend, the frequencies
which will be freed-up when the EU’s
Member States switch from analogue to
10 n Europe issue II 2009
“Wireless broadband is a real chance for Europe. It could
help bridge the digital gap within Europe.”
digital broadcasting, a process set to be
complete by 2012. The additional spectrum
made available by this shift could stimulate
businesses to innovate, developing new,
cheaper, better and wide-ranging services at
the same time everywhere in Europe, bringing
real added value to European consumers.
One such example is the very promising LTE
(Long Term Evolution) technology. If granted
enough radio spectrum, this technology could
achieve its full potential, and provide access
to quality mobile voice and high bandwidth
data services to every citizen and businesses
anywhere in the EU.
In order for this to happen, though, some
tough decisions need to be taken regarding
how to apportion the digital dividend. There
are a number of challenges that need to be
addressed: different timeframes in different
Member States; the risk of Member States
taking individual, not collective, decisions;
what neighbouring countries and international
spectrum organisations will do; and how to
balance the (apparent) conflicting interests of
different parts of the industry. The question
here is not about privileging one industry
over the other! We should not pre-empt
spectrum for any specific use, as we cannot
know which direction the most innovative
services and technology will take. Service and
technology neutrality must be ensured. Also
on the institutional front - what is important is
not who, or which, body makes the necessary
decisions; what is important is to make sure
that these decisions are taken.
All these challenges, but also the vast
potential up side, are why I have made the
digital dividend a priority for my RSPG
Chairmanship. We are currently working
on constructive, workable solutions. We
will present our first findings, to feed into
the Commission’s roadmap on digital
dividend, in our plenary session on May 13.
I am convinced the RSPG’s opinion will be
a useful contribution to the debate and will
pave the way for a coordinated solution that I
believe will be acceptable to all stakeholders.
Wireless broadband
Wireless broadband also features high on the
agenda of my RSPG Chairmanship. Wireless
broadband has great potential for innovation
and growth. It is inextricably linked to the
digital dividend debate as some of the bands
freed up by the digital switchover could be
used to develop it.
Wireless broadband is a real chance for
Europe. It could help bridge the digital gap
within Europe. It is especially useful in
remote areas where other technologies would
be rather expensive to provide broadband
connection. It also plays an important role
satisfying the market demands due to the
increasing mobility of users.
Developing wireless broadband networks
requires far less costly infrastructures than
fibre networks, and can ensure good quality
service. It could give high-speed Internet
access to everyone, everywhere, support
the spread of ICT and make Europe a
real knowledge-based economy. Wireless
broadband could reinforce competition
between networks, technologies and services,
to the benefit of consumers.
The European Commission’s 14th telecoms
progress report published on March 25 says
that not only is mobile broadband taking off
in the EU, it is already becoming a viable
alternative to fixed broadband in some EU
countries!
Yet here again a number of obstacles lie in
our way, and again unilateral decisions must
be avoided. The RSPG is currently working
on this issue and will come up with a position
paper on May 13. As strategic adviser to
the Commission, we will provide concrete
proposals and ideas that we hope will be
reflected in the Commission’s forthcoming
roadmap on wireless broadband.
The EU stands at a crossroad. As it did
more than 20 years ago, the EU must seize
the opportunity offered by the spectrum to
regain its leading position in the telecoms
sector. To do so it must take decisions on
spectrum that are acceptable to all while
enabling innovation - and it must take them
now. We at the RSPG believe spectrum-
driven innovation is a golden opportunity for
Europe. Innovation is a tremendous source
of growth, and this is particularly true for the
ICT sector, but we must act now or we run the
risk of lagging behind and depriving Europe
of a promising way forward on the path to
economic recovery. n
 Regulatory affairs

Promoting telecom competition in Albania

by Ilir Shehu, Chairman of Board and Executive Director, AKEP, Electronic and
Postal Communications Authority, Albania

Last year, Albania’s government passed a law that changed the regulatory framework for
the telecommunications sector. The law, which basically follows EU directives and policies,
established AKEP, an independent regulatory agency. AKEP has been moving forward
vigorously to increase competition in the sector. The recent granting of a license to a third
mobile operator and regulations controlling the tariffs charged by operators with significant
market power, for example, was quite successful; it also significantly reduced the tariffs for
mobile services.

Ilir Shehu is the Chairman of the Board and Executive Director of AKEP, Albania’s Electronic and Postal Communications Authority.
For many years he has been a part time professor at the Polytechnic University as well as at the Military Academy. Until his current
appointment by the Albanian Assembly Mr Shehu served as the Head of the Inspection Sector at AKEP. Prior to AKEP, Mr Shehu worked
for the Albanian government in the National Intelligence Service, as Head of Sector responsible for the implementation of Information
Systems at ICA, and as the Director of Communications Systems in the Ministry of Defence.

Ilir Shehu graduated in Electronics from the Polytechnic University of Tirana; he also earned a degree in Economics from Tirana
University.

The electronic communications market in the
Republic of Albania is currently one with very
fast and variable dynamics. The market is
undergoing important changes not only from
the regulatory point of view, but also in terms
of service quality and variety, tariff reductions
for network users, total market liberalization
and the like. These changes have created
favourable conditions for fair and effective
competition in this market.
Referring to the legal framework, which
regulates relationships in the electronic
and postal communications market, law
No. 9918, ‘On Electronic and Postal
Communications in the Republic of Albania’
entered into force in June 2008. It replaced
the previous law ‘On Telecommunications
in the Republic of Albania’. The new law is
one of the most fundamental and important
measures undertaken in this market by
the Council of Ministers. This expression
of sector policy is in compliance with the
National Plan for Implementation of the
Stabilization Association Agreement, and it
approximates our national legislation with
that of the EU acquis communitaire. The law
is framed within the spirit of approximation
with the regulatory framework for electronic
communications of the European Community
(Directive 2002/EU).
With regard to secondary legislation, the
project for Communications Regulation
Development funded by EBRD/EU is
assisting AKEP in the process of drafting
and completing the supporting sub legal
framework for the implementation of the law
on electronic and postal communications.
Hence, from the legislative point of view,
we can proudly say that we are optimally
positioned and developed for a country like
Albania, which aspires to become a member
of the greater European family.
In the fixed telephony market, after the
successful privatization of the biggest
operator in the country Albtelecom S.A., and
the great investments made the infrastructure
and services of the network, the system -
and its penetration rate - continues to grow

Europe issue II 2009 n 11

 Regulatory affairs
into a modern network offering a wide
variety of services. Albania’s liberalization
policy was strongly encouraged and
supported by the Council of Ministers’
policy through legislation. After removing
licensing barriers and implementing the new
General Authorization regime, there has
been substantial growth of fair and effective
competition in the fixed telephony market.
This has brought performance and quality
improvements for both local and regional
operators, an increase in the number of new
undertakings and services in the spirit of
technological convergence as well as other
alternatives offered by the most advanced
technology in this field as well as tariff
reduction.
The mobile telephony market, which is
also much more sensitive with regard to
its subscribers, is currently in a dynamic
process of tariff reduction and is evolving
into an increasingly effective and fair market.
The start of the third mobile operator, Eagle
Mobile, has been much quicker than expected.
AKEP’s intervention, implementing tariff
regulation for the other two mobile operators
- AMC and Vodafone Albania - has been quite
satisfactory and has resulted in the reduction
of service tariffs.
Due to changes in the legislation, the rise
of public awareness and the influence of the
government new projects in education, public
services, protection of public order and the
like have flourished. This has largely been
due to concrete action by the government
to encourage such projects by creating an
attractive tax and fiscal environment. Policies
and actions such as these have also stimulated
the rapid development of the Internet service
providers market.
Tariffs in the mobile telephony market have
been reduced compared to the previous period
since Eagle Mobile started to offer its services
competitively and AKEP implemented its
tariff regulations for SMP’s (companies with
significant market power) AMC and Vodafone
Albania.
Tariffs for services offered by AMC
for national calls of the ALBACARTA
programme were reduced as follows:
• 4% for AMC on net calls, first
minute;
• 57%, for AMC on net calls, second
minute;
• 68% for AMC on net calls, over two
minutes;
• 20% for off net calls, first minute;
12 n Europe issue II 2009
• 53% for off net calls, second minute;
• 63% for off net calls, over two
minutes;
• 22% for calls to fixed networks, first
minute;
• 48% for calls to fixed networks,
second minute; and
• 59% for calls to fixed
networks, over two minutes.
Tariffs for services offered by Vodafone
Albania for national calls using its
Vodafone Card programme were reduced
as follows:
• 24% for Vodafone Albania on net
calls, PEAK;
• 3% for Vodafone Albania on net calls,
OFF-PEAK;
• 24% for off net calls; and
• 26% calls to fixed networks.
A very important change for both major
mobile telephony operators (AMC and
Vodafone Albania) is the reduction of the
minimal chargeable time from 30 seconds to
15 seconds, which together with the reduction
of per minute tariffs, substantially reduces
expenses for short calls.
As part of their sector development plans,
The Council of Ministers and AKEP have
considered the emergence of a fourth
operator in the market as essential to increase
competition, improve quality and expand the
range of services. More important, this will
provide services for those with special needs,
in accordance with international standards for
alternative services. The fee for these services
will not, in any case, be higher than the
average fees in the EU countries. The public
tender for the frequencies in the E-GSM and
GSM 1800 bands called for presenting and
opening the bids on 20 February 2009.
The law on electronic communications
defines AKEP also as a regulatory body for
the supervision of the postal service market
in the Republic of Albania. This is a novelty
for this institution and in this respect the
Ministry of Public Works Transport and
Telecommunications (MPWTT) and AKEP
are taking the first steps towards exercising
our competencies and taking on legal
responsibility. Since supervision of postal
services was not included in the duties and
functions of TRE, the precursor institution,
AKEP has initiated its work by taking
organizational measurements in order to build
the structures and the necessary administrative
and human capacity. On the other side, in
order to define the legal competencies of
AKEP in the implementation of the legal
obligations, the MPWTT as the line ministry
has undertaken the legal initiative to change
the law for postal services; this is actually at
the stage of consultation with the interested
parties and very soon will be passed to the
Assembly.
Another specific aspect for the market
as well as for AKEP is the ‘.AL Domain’
administration. At present, AKEP administers
the .AL Domain based on regulations
approved in accordance with the new law
on electronic communications. Importantly,
the servers enabling this service for the
domain were transferred from Pizza, Italy to
Tirana this month. This transfer marks the
accomplishment of one of the duties assigned
to AKEP by the government and the Assembly
of Albania. This, considering the importance
of maintaining and guaranteeing extremely
high security, is a barometer of the progress
achieved in the electronic communications
sector and the attention paid by the Council
of Ministers and the Assembly to the advance
and development in this field.
There are many challenges ahead in the
electronic communications market, among
the most important is the realization of the
legal obligation to provide universal service
access, number portability, improvement and
development of leadership, administrative and
professional capacities.
Universal service, providing a base package of
affordable telephony services even for users
in need of residing in remote regions within
the territory of the Republic of Albania, is one
of the highest priorities for 2009.
Secondly, offering number portability is
an indispensable legal requirement and an
important part of Albania’s commitment in
the framework of the EU’s SAA (Stabilisation
and Association Agreements), is under way.
AKEP has drafted the respective regulation,
which has been published for public
consultation.
The biggest challenge is to guarantee the
manpower to accomplish the other goals. The
improvement and development of AKEP’s
leadership, administrative and professional
capacities is the key to strengthening its
independence and performance as a regulatory
body.
AKEP’s primary job remains the supervision
of the electronic and postal communications
market with the aim of creating a real,
effective, fair and competitive market. n
 OCTOBER 5 TH

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Europe issue II 2009 n 13

 Digital dividend

Dividing the ‘digital dividend’

by Professor N. Alexandridis, President, Hellenic Telecommunications & Post Commission (EETT)

The transition from analogue to digital broadcasting will free significant amounts of spectrum
for other uses; digital channels use one-fourth the bandwidth of analogue channels. The freed
spectrum, or ‘digital dividend’ can be used for many new and better services and can have an
important social impact if wisely apportioned. Greece and other EU countries are reserving
part of the dividend for new TV services, mobile TV, a wide range of public interest services
and for stimulating economic growth.

Dr N. Alexandridis is the President, Hellenic Telecommunications & Post Commission (EETT). Dr Alexandridis devoted most of his
career to academic positions including Professor of the first Chair of Computer Science in Greece at the School of Engineering of the
University of Patras; Professor of Digital Systems and Computers at the National Technical University of Athens; and as Professor of
Electrical and Computer Engineering at the George Washington University, Washington DC.

Dr Alexandridis has published many works in international scientific journals and conferences. He is the author of 12 textbooks including
three in English. He was a founding member and the first President of the Greek Computer Society. He is a member of the Technical
Chamber of Greece, is listed in a number of versions of Who’s Who, and has received many honours and awards.

Dr Alexandridis graduated from Anatolia College. He earned his B.Sc. degree in Electrical Engineering from Ohio University and his
M.Sc. and Ph.D. degrees in Computer Science and Computer Engineering from the University of California, Los Angeles (UCLA).

In finance, a dividend is the proportion of
the earnings of a corporation paid out to
shareholders. With the coming of digital
television and digital broadcasting, another
dividend, of the digital kind, is expected
to accrue for the benefit of society. It is
commonly referred to, in political and
technical circles, as the digital dividend.
The transition from analogue to digital
broadcasting will lead to significant gains
in spectrum efficiency since the spectrum
required for a digital channel is about one-
fourth of that required for an analogue one.
Once all analogue TV channels have been
switched to digital, there will be free spectrum
- the digital dividend - which could be used
for a range of new or improved services:
• Extension of mobile communications
coverage
• Ubiquitous broadband access through
wireless broadband
• Mobile TV services
• Enhanced social services (e-government,
e-health, e-education, etc)
• High-definition TV
• Others to be defined in time
A European Commission communication
(May 2005) on, ‘accelerating the transition
from analogue to digital broadcasting’,
proposed early 2012 as the deadline
for closing down analogue terrestrial
broadcasting. It also encouraged member
states to develop plans for the optimal use
of the digital dividend so that new types of
electronic communications services could be
developed.
This was followed in November 2007 by
another communication on ‘reaping the full
benefits of the digital dividend in Europe: a
common approach to the use of the spectrum
released by the digital switchover.’ The
Commission proposed a coordinated EU
approach to ensure optimal use of the digital
dividend.
Finally, on September 24, 2008, the European
Parliament adopted a resolution on the
Commission’s communication of November
2007. The positions of the Parliament can be
summarized as follows:

14 n Europe issue II 2009


1. “Calls for close cooperation among
member states to achieve an efficient, open
and competitive electronic communications
internal market…”
2. “Is convinced that new multi-play
packages… may soon be offered due to
increased technological convergence, and at
the same time observes that the emergence
of those offers depends crucially on the
availability of valuable spectrum…”
3. “Emphasizes that the digital dividend
provides the European Union with unique
opportunities to develop new services… and
to remain a world leader in mobile multimedia
technologies…”
4. “Calls on the Member States to develop,
following a common methodology, national
dividend strategies by the end of 2009…”
5. “Acknowledges the right of Member
States to determine their use of the digital
dividend, but also affirms that a coordinated
approach at Community level greatly
enhances the value of the dividend and is
the most efficient way to avoid harmful
interference between Member States…”
6. “Emphasizes that Member States may
consider technology-neutral auctions for…
allocating frequencies that are liberated
because of the digital dividend and making
those frequencies tradable… in full
compliance with ITU radio regulations…”
7. “Supports a common, balanced approach
to the use of digital dividend, allowing
both broadcasters to continue offering and
expanding their services and electronic
communications operators to use this
resource to deploy new services addressing
other important social and economic uses, but
stresses that… the digital dividend should be
allocated on a technology-neutral basis.”
8. “Urges the Commission to undertake,
in cooperation with the Member States, the
appropriate technical, socio-economic and
cost-benefit studies to determine the size and
characteristics of the sub-bands that could be
coordinated or harmonized at Community
level…”
The Commission’s legislative proposal is
expected in 2009.
It must be emphasized that the size of the
digital dividend will vary from country to
country due to geographical and cultural
reasons. The following is an attempt to
describe the situation on a country-by-country
basis from Cullen International.
Most EU countries will have completed
the transition to all-digital broadcasting by
2012. Six of them have already decided
the size of their digital dividend: Finland at
189MHz (for broadcasting and for “digital
broadband mobile”); Sweden at 149MHz (for
broadcasting and electronic communications);
Czech Republic at 100 MHz (for
broadcasting, mobile broadcasting and mobile
services); Norway at 458MHz (for local radio,
broadcasting and electronic communications);
France at 72MHz (for audiovisual services
mainly, and for mobile communications);
and Great Britain at 123MHz (Ofcom has
proposed a market-based, technology- and
service-neutral approach to the award of the
digital dividend, stating that the dividend
is most suitable for mobile TV, mobile
broadband and TV broadcasting, including
HDTV).
In Greece, the government announced that
digital terrestrial television services could
officially be launched on November 1, 2008.
Services should be available nationwide and
offer content from both the public service
broadcaster ERT (Hellenic Radio and
Television) and commercial broadcasters.
As a next step, the government will invite
commercial broadcasters to tender for digital
television licenses.
In addition, the Ministry of Transport and
Communications and the Ministry for
Media, with the help of a consultant, will
produce a new frequency plan to allow
for the introduction of digital television
services. A draft was issued in summer 2008.
The size and use of the digital dividend is
currently being investigated. The Hellenic
Telecommunications and Posts Commission
(the telecommunications regulator in Greece)
has commissioned a study to identify possible
uses of any digital dividend in the country
after the transition to all-digital broadcasting.
Since January 2006, ERT (Hellenic
Radio and Television) has tested digital
television services on a trial basis in Athens,
Thessaloniki and Thessaly and offered
viewers access to its Prism, Cine+ and
Sport+ services. The trial used the MPEG-2
compression format.
On February 2009, at the conference organized
by the Hellenic Telecommunications and
Posts Commission on the Digital Dividend,
we stressed the following points for the
Mobile payment
Mobiledividend
Digital systems
access
smooth transition to digital broadcasting and
the best utilization of the digital dividend in
Greece:
• the right political decisions must be made
now so that this “once in a generation” golden
opportunity for spectrum redistribution is
fully taken advantage of to transform the lives
of the citizens of Greece;
• the state must decide very soon how the
digital dividend will be used to satisfy the
ever-increasing need of the citizenry for
coverage of mobile voice communications
everywhere and for continuous uninterrupted
access to the Internet, television programming
and multimedia services;
• decisions relative to the use of the digital
dividend should be harmonized, to the extent
possible, with those made by other Member
States of the European Union; and
• finally, decisions with regard to the
allocation of the digital dividend should be
based on five basic principles:
1. maximization of benefits to the citizenry
2. assurance of flexibility in the use of the
digital dividend
3. establishment of a stable and predictable
regulatory environment, which will trigger
new investments and the creation of novel
services
4. technological neutrality; and
5. harmonization, to the degree possible,
with the rest of the European Union.
Viviane Reding, EU Commissioner for
Information Society and Media, in addressing
the ComReg Conference in Dublin on October
1, 2008, stated the following:
“For me, the conclusion is clear: broadcasting
must get an important share of the digital
dividend so that it can develop new services,
in particular High Definition TV and also
interactive services and mobile TV. But it
is also clear that we also need to reserve a
large share of the dividend for other public
interest services and for stimulating economic
growth…
“I have two suggestions to make: First,
let us jointly choose a political figure for
the distribution of the digital dividend. I
propose a ‘fair play’ 50:50 rule. That is, half
the dividend for the broadcasters and half
the dividend for the new users. A bold step
like this will show the world that we mean
business. This is the only way we will cut the
knot and make real progress. Second, let’s
move ahead together on spectrum. Together
Europe is strong, divided it will fail to reap
the rewards of the digital dividend.” n
Europe issue II 2009 n 15
 Satellite - regional development

Closing the digital gap in Europe

By Aarti Holla-Maini, Secretary General, European Satellite Operators’ Association (ESOA)

EU has set broadband Internet access as one of the goals of the i2010 strategy. Many EU
programmes, including e-Health and e-Education, depend on networks capable of transmitting
large quantities of data at high speed. Nevertheless, it is difficult to economically bring broadband
service to people in remote areas. Satellite connectivity can easily and economically resolve
this problem, but two EU policies - technology neutrality and structural funding for individual
regions - currently block EU funding for satellite broadband deployment programmes.

Aarti Holla-Maini is the Secretary General of European Satellite Operators’ Association (ESOA); she has worked for many years in
the aerospace industry, especially with satellite business strategy and the legal aspects of technological development. She has been the
secretary general of ESOA since 2004. Previously, she worked in Brussels representing Galileo Industries where she worked closely with
European Institutions on the development of the public-private partnership scheme and management aspects of the Galileo programme.
Ms Holla-Maini started her career in the aerospace industry at DaimlerChrysler Aerospace (now EADS) in Munich, Germany.

Aarti Holla-Maini holds an MBA from HEC in France, a diploma in German law from the University of Passau, Germany and a law
degree from King’s College at the University of London.

Nearly 200 million of all European citizens
do not use the Internet at all and 230 million
households in the Union still do not have
access to the World Wide Web. The statistics
cause even more alarm when we consider
the differences between urban and rural
areas, and also when we compare individual
Member States. In countries such as Romania,
Bulgaria and Greece, more than 60 per cent
of the population does not use the Internet,
whereas in Denmark or the Netherlands, that
percentage goes down to just over ten per
cent.
i2010 strategy
These are just some of the results published
in the mid-term review of the i2010 strategy
and although some figures look discouraging,
in fact a lot of progress has been made over
the last few years. Launched in 2005 as an
integral part of the EU’s Lisbon Strategy for
a knowledge-based society, this plan brings
together all the policies and initiatives aimed
at boosting the use and benefits of information
and communication technologies (ICTs).
A lot more still remains to be done however
and the mid-term review makes it very clear:
“Europe needs to shift up a gear to lead the
transition to the next generation networks
while not slacking off in its effort to overcome
the digital divide.” The case is especially true
when we talk about broadband connectivity,
which the EU has set as one of the goals of
the i2010 strategy.
Broadband connectivity
The speed and capacity of broadband turns
the Internet into a powerful communication
tool for both consumers and business, as
well as into a source of information and
research. Sixty per cent of public services in
the EU are fully available online and there are
revolutionary programmes being implemented
in areas such as e-Health and e-Education.
They depend on a network capable of
transmitting large quantities of data at the
fastest speed possible.
Broadband - used already by 20 per cent
of the EU population as of January 2008 -
is clearly becoming the standard mode of
connectivity. Despite continuous growth over

16 n Europe issue II 2009


“The European Union’s approach to improve access to broadband connectivity and other ICT
related services has been exclusively pinned on the notion of ‘Technology Neutrality’. This
principle aims at maintaining a level competitive playing field by not favouring any particular
technology.”
the last few years, penetration is slowing
down and the gaps between Member States
in terms of take-up, speed, price and coverage
are widening. Broadband penetration in
northern countries such as Denmark, Finland,
Holland and Sweden exceeds 30 per cent of
the population while in Bulgaria, Poland,
Slovakia, Greece and Romania it accounts for
even less than ten per cent.
The reasons for this are many. Firstly socio-
economic barriers in several Member States
result in lower skills and correspondingly
lower interest and need for advanced
technological services. Secondly: speed,
price and coverage. It may take a few years
to balance social disparities across Europe but
improving on the availability and affordability
of access should be feasible within a
reasonable timescale.
Technology neutrality to the test
The European Union’s approach to improve
access to broadband connectivity and other
ICT-related services has been exclusively
pinned on the notion of ‘Technology
Neutrality’. This principle aims at maintaining
a level competitive playing field by not
favouring any particular technology. Based
on that idea, legislators have long hoped to
stimulate competition among the different
alternatives capable of delivering broadband
connectivity, which would eventually result
into wider areas of coverage, better services
and lower prices.
Some countries, and especially highly
populated urban areas, in which there were
already competing technologies, have
benefited enormously from competition. The
bundling of products including broadband
access, telephony and/or television is also
becoming more and more common in many of
those highly developed regions. The growth
rate of DSL, still the most common system for
broadband in Europe, has started to decline
and some new alternatives are increasing their
market share.
Despite the promising figures, the EU strategy
to spread the use of broadband has not been
able to solve the differences between the most
and the least developed Member States, nor
between rural and urban areas. The rollout
of DSL and cable is accelerating in European
cities but in the remotest parts of the Union
the deployment of those technologies is,
Mobile
Satellite
at best, not commercially attractive and, at
worst, substantially more expensive than
other alternatives.
That is why policy-makers should not be held
back in the name of ‘technology neutrality’
from promoting technologies, such as
satellite that are not only optimally suited to
respond to many public sector requirements,
such as emergency response, but are also a
proven infrastructure that can quickly bridge
the geographical digital divide - reaching
out to Europe’s islands, mountains and
villages - in a cost-effective way. Satellites
are a natural complement to existing land-
based technologies, both wired and wireless,
taking one step further to ensure that access
to broadband is available to all European
citizens.
Geographical digital divide
There are two types of digital divide: social
and geographical. The first depends on a
multitude of educational, cultural, and socio-
economic factors that need to be tackled
using a long-term approach. The latter can be
eradicated thanks to technologies that have
a global reach and that do not depend on the
deployment of lengthy and costly terrestrial
infrastructure to access those remote and
scarcely populated areas of very little
commercial interest to service providers.
As has been seen with broadband penetration,
broadband coverage has also rapidly grown
in the last few years and with it too, the gap
among Member States and, more importantly,
between rural and urban areas. DSL, the most
common system for broadband access, is now
available in 89 per cent of all the telephone
lines in EU25, but this percentage has now
started to plateau while other alternative
technologies are still marginal in many
Member States.
payment
Mobile
- regional systems
access
development
The differences are just getting wider and in
the case of rural areas in countries such as
Greece, Czech Republic, Malta, or Cyprus
there is no DSL coverage at all. Waiting
patiently for a technologically neutral
market to take its natural course to stimulate
competition and bring connectivity to those
areas will not bring results. Even when there
is coverage, the speeds are usually low and
the prices way too high.
Universality of service
Satellites already deployed in space offer
broadband connectivity using just an antenna
attached to housetops. They provide a
universality of service that can be a real
solution to the geographical divide cutting
across borders and covering the entire globe.
Satellite capacity is available to start a
significant rollout of services although action
is still necessary to improve awareness in a
Europe afflicted by technology neutrality: a
concept that those outside Brussels may not
have heard of and may care even less about.
Companies have been investing in new
solutions and applications to lower the cost of
the end-user terminals and reach rates similar
to that offered by DSL in Europe. An expert
group made up of industry members working
with the European Commission on the issue of
the Digital Divide came to the conclusion that
satellite was best in areas with a minimum of
20 households per square kilometre.
Satellite infrastructure requires large
investment and operators need a return on
that investment. In addition, service providers
and local support infrastructure is needed
including user terminals and installation.
Whereas it is relatively easy to see how
structural funds, for example, could be used
to support the construction of new phone or
cable infrastructures, in more remote regions
it is not a new terrestrial deployment that is
required but a satellite one.
Can structural funds be used to bring satellite
connectivity to those without any? Since
structural funds are given to individual
regions they do not naturally lend themselves
to satellite services, which draw upon
economies of scale and are most cost-effective
when providing service to multiple regions
and a great numbers of users. Satellites
infrastructure is available for sharing by
many regions and Member-States and cannot
Europe issue II 2009 n 17
 GIL 2009: Europe
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18 n Europe issue II 2009


be amortized on the same basis as a fibre
optic network or a cable. Structural funds
should also be available to fund services and
equipment in regions where there is a clear
market failure.
Appropriate recognition
EU officials must therefore not only embrace
the potential and advantages of satellite
communications, but also ensure that
legislation allows taking advantage of their
technical strengths. During the Fifth Space
Council in 2008, space ministers already
recognised the substantial contribution of
space to attaining the EU’s Lisbon Strategy
objectives. Member States clearly asked for
“an appropriate regulatory framework and the
sustained access to radio-spectrum for space
applications”.
After travelling the 36,000km from outer
space, satellite signals are fragile when
arriving on earth and the stronger terrestrial
frequencies easily interfere with them. That
is why protection must be in place to avoid
Connect-World
An insight into the future
www.Connect-World.com
Satellite - regional development
interference with crucial services such
as emergency or sea communication, but
also with the day-to-day information and
entertainment that the world has come to take
for granted. Satellite orbital positions and
the allocation of the frequency bands they
operate in is coordinated by the International
Telecommunications Union (ITU). European
legislation must be consistent with those
international agreements to avoid potential
conflicts among operators and Member States.
Such conflicts would only serve to jeopardise
the quality of satellite services within Europe.
Global backbone
Satellites provide an invisible safety net, a
global backbone, upon which most of today’s
communications services rely. Even cable TV
often relies on this satellite backbone. The
networks that satellites are able to create also
enhance social cohesion among all European
citizens, making the world genuinely a smaller
place by fostering a rich cultural exchange.
The European Union still talks about total
connectivity years after it originally said
it wanted to make it a reality. Satellite
technology could have brought Europe one
step closer to achieving that objective. Policy
makers should not be afraid of promoting
specific technologies when they are so clearly
the optimum solution for a persisting problem.
After all, politicians will be remembered for
the bridges they build, not for the gaps they
leave. n
Europe issue II 2009 n 19
 Internet markets

Innovating to reach the consumer

by Dana Dunne, CEO, AOL Europe

Consumers expect services on the Web to be free, so advertising will have to pay the way,
but it is increasingly difficult to target advertising to the right consumers, the right sites and
on the correct device. Advertisers need to reach the consumer whether on a computer, mobile
phone, iPod, PDA or television. By aggregating content from rival services and distributing it
to multiple platforms - mobile, fixed, PC, etc. - consumers, advertisers, content providers and
service providers all benefit.

Dana Dunne is the CEO of AOL Europe; he served previously in the US as the head of AOL’s transformation programme. Prior to joining
AOL, Mr Dunne was the Chairman and CEO of WebTV Europe, a mobile music and private investment company based in London.
Previously Mr Dunne was President of the Wholesale and International Carrier Services business unit for Belgacom, where he had
served earlier as the General Manager of the Business Division. Earlier in his career, Mr Dunne was at the American telecoms company
US West as Head of Corporate Strategy and Development as well as President of US West International. He was a leader of McKinsey
& Company’s telecommunications practices, based in their London, Brussels and Madrid offices.

Dana Dunne holds MBA and MA joint degrees from Wharton, University of Pennsylvania, and is a fellow of Joseph H. Lauder
Institute.

It is safe to say that advertising will fuel the
future of the Web. Consumers increasingly
expect free access to just about everything
on the Web - free email, free content, free
services and that model requires the support
of ad dollars to continue. Yet with the
explosion of the Internet, advertisers face an
increasingly difficult job of reaching people
on the Web - audiences are fragmenting,
platforms are multiplying, consumers have
greater control than ever over what they see
and when, and, on top of that, the pace of
change continues to accelerate. Is the Web
getting ahead of itself? How do advertisers
keep up?
Who needs a gatekeeper?
Five years ago, portals were gatekeepers
and many millions of customers valued that
service. It was a simple and straightforward
set up that made it relatively easy for
advertisers to reach consumers.
As the Web has developed, people have
become more accustomed to viewing Web
pages from a huge multiplicity of sources,
so the concept of a gatekeeper to content
has disappeared. Consumers roam widely on
the Web, using search to find what they are
looking for, social networks to connect with
people they care about, and an increasing
array of blogs and niche sites that appeal
directly to their passions. According to
Technorati, a blog tracking service, roughly
60,000 blogs are created every day. Each
week, the equivalent of 57,000 full-length
movies are uploaded to YouTube. Social
network usage has tripled in the past three
years.
From a content perspective, reaching
consumers today means producing great
content, carefully targeted to specific audience
groups. From an advertising perspective,
reaching an increasingly fragmented online
audience is a challenge.
The blending of information and
communication technologies creates powerful
tools that bring people together, enhancing
their digital experiences.
What will help advertisers in this fragmented
world is the rise of improved analytics and
advertising networks that can potentially
serve millions of websites. Fast forward ten
years into the future, to a time where all of our
media, including TV, newspapers and books,
could be IP-based, and the power of the
intelligent network becomes obvious. Imagine
also that by reducing creative production costs
advertisers can produce multiple versions

20 n Europe issue II 2009


“We now see around 40 per cent of mobile traffic in the EU is coming from the iPhone. This
has been a fast and rapid development, but it’s a validation of the growing strategy to deliver
the fullest possible breadth and depth of content from Web to Mobile.”
of the same campaign. Two consumers then,
reading the same IP-newspaper, can be served
the same advertising campaign, but with
separate creative content targeted to appeal
specifically to each type of user.
More platforms
Among the ICT initiatives pursued by the
European Union is the goal of introducing
multi-platform access for content. Our
strategy reflects this and we continually
look for new ways to give consumers their
preferred content, irrespective of location,
time and method of delivery. One example of
this is the recent launch of new portal features
that allow consumers to access multiple email
services from one online location.
Portals, social networks and niche websites
focused around ‘passion points’ that engage
with consumers feed into the growing desire
of mass audiences to have individualised
content, irrespective of whether it gets
delivered via a computer, mobile phone, iPod,
PDA or television.
In the past 18 months, for example, there has
been a rapid acceleration of website usage
and products on mobile phones. Two key
things have driven this - new handsets like
the iPhone, and the massive rise in mobile
usage of social networking sites such as
Bebo. What this clearly shows is that people
want access to the Web services they use and
trust on their mobile devices. Mobile Web
browsing is growing faster than PC Web
browsing in key EU markets - eight times
faster in the UK according to recent research
(http://www.mobilemarketer.com/cms/news/
research/2392.html) - and content providers
need to make sure that their websites deliver a
compelling and engaging experience on these
devices.
We now see around 40 per cent of mobile
traffic in the EU is coming from the iPhone.
This has been a fast and rapid development,
but it’s a validation of the growing strategy to
deliver the fullest possible breadth and depth
of content from Web to Mobile - the stories
and articles available online as well as in full
on mobile sites. As more and more customers
use their mobile devices to browse the Web,
they will use optimised mobile sites to access
exactly the same content as they would on
the Web. The ability to access and browsing
the Web on the go is becoming a standard
feature of all mobile phones, just as taking
and storing pictures and video online seems
to have become a common service within the
last three years.
With this rapidly growing new usage comes
the opportunity of new monetisation from
mobile advertising. One thing is for certain,
as this credit crunch bites deeper into the
manufacturing and retailers’ purse, the use
of the Web to reach potential consumers will
evolve from an ‘additional consumer channel’
to a ‘must have channel’. The rate of growth
of online advertising in Europe is predicted by
a number of researchers to enjoy double digit
growth in 2009. Online advertising is a great
new platform with exciting new customer
response paths - notably click-to-call, where
a click on a banner directly launches a call
to the call centre of the advertiser’s sale
department. The integration between Web
and mobile is its key strength. With global,
multi-platform, advertising networks, ads can
be dynamically targeted across the Web and
mobile sites wherever the customer is. For
instance, iPhone customers can be targeted on
both mobile and websites, making sure that
ads are optimised for the device customers
are using to view the site. This sort of
functionality is at the vanguard of monetising
this exciting new cross-platform, convergent
world.
New era of openness
Adding to the cross-platform complexity will
be a new trend just now taking off - openness.
Just as publishers once learnt that adding
links to competitors’ sites was a good thing
rather than a threat, they are now learning
that adding competitors’ content to their sites
can have the same positive effect. Bebo, for
example, recently joined the new OpenSocial
platform that allows any developer, including
competitors or advertisers, to develop content
for Bebo. It is a win-win situation - Bebo
dramatically enhances its own user-experience
and developers get access to a high-profile
platform to promote their applications.
Consumers can also access custom feeds
from social networking services, local news,
and RSS enabled sites directly from portal
homepages. On the social networking front,
Mobile payment
Mobilesystems
Internet access
markets
feeds are now aggregated from rival sites
into single services, creating competitive
advantages that benefit Web and mobile
consumers.
This ‘co-opetition’ - collaborating with
competitors for mutual benefit - will be
increasingly commonplace in the year ahead.
It is a direct response to consumers’ desire to
have as much of their content in one place,
unfettered by any limits imposed by the
platform or the content provider. Europe just
got smaller.
The pace quickens
In the last year alone almost 300 new online
ad networks were launched; millions more
consumers became online publishers via
their Bebo, Facebook and MySpace pages;
bloggers beat professional newsrooms to
exclusives and the launch of a new generation
of smartphones heralded a revolution in
mobile Internet.
For brand owners and advertisers, just keeping
up with the pace of change is a challenge
in itself. Online advertising was always
supposed to be simple but as the number of
publishers, outlets, formats and channels
continues to grow at a breathtaking rate so
online advertising is fast becoming more
complicated than TV, radio or newspapers.
Exploiting technology to win
Consumers have been spared the headache
of the Web’s new complexity by RSS feeds,
recommendation sites, cost-comparison
portals for every product under the sun and
the latest semantic services like Twine.
Up until very recently, confused advertisers
have been poorly served. That is quickly
changing as the latest full-service, global ad-
networks are now leveraging hugely powerful
technology to reach an increasingly disparate
online audience. Barriers to reaching the
consumer are falling.
That is good for advertisers, good for
consumers, and good for the Web. The flow of
cash into this sector will fund faster, smarter,
better technology to reach more consumers,
drive up usage and give advertisers more
opportunities to reach consumers. n
Europe issue II 2009 n 21
 ICT Innovation

Innovating at the speed of life

by Larry Stone, BT President Group Public and Government Affairs

The pace of change is accelerating at a rate many times faster than any time in the past.
Innovation is not only important to companies; the economies of whole countries depend upon
it. One way to stimulate innovation is to collaborate with other organisations and absorb new
ideas. The European Commission’s Framework Programmes provides financial support for
collaborative research in ICT.

This lowers risks so companies can participate in collaborative projects and provides additional
skilled resources to address complex challenges.

Larry Stone is BT’s President of Group Public and Government Affairs; he looks after EU affairs, UK parliamentary and political
matters, and public affairs globally with teams in Washington and Singapore. Mr Stone is also responsible for CSR and sustainability in
the BT Group. Previously, he served as group company secretary, as a trustee of the BT Pension Scheme and as a member of the Faculty
of ifsProshare (financial education charity), the UK Social Investment Fund Advisory Board and the London Stock Exchange Primary
Markets Group. Mr Stone also served as BT’s external and media affairs in Asia (based in Tokyo) and for the European Union (based
in Brussels). Prior to that, he was at Cellnet (now O2 UK). Mr Stone is on the Board of the Europe-America Business Council (EABC)
and on the Advisory Board of the European Policy Council (EPC). He is Honorary Colonel of 81 Signal Squadron (Volunteers) in the
Territorial Army and is a Foundation Board Member of Kingston Grammar School.

Larry Stone has degrees in Law and in Communications Policy.

If you feel the world is spinning faster these
days, you certainly are not alone. The pace
of change is accelerating all the time. It was
at least 50 years in the world’s wealthiest
countries before the majority of homes
received electricity from a main power line.
When broadband came along, similar levels
of take up were achieved in some countries in
less than a decade.
Once innovations have captured the public’s
imagination, they spread like wildfire. And
innovation is no longer just about new
technology products. Indeed, innovating
the way firms do business can have a bigger
impact on their success than a new technology
alone.
The room for poor performance is already
small, and it is vanishing fast. Firms that
have too few of the right ideas will soon
find business ebbing away. So too will
businesses that are slow to turn their ideas
into marketable products and services.
On the other hand, if you have a winning idea
and can get it to customers quickly enough,
the market could well be yours for the taking
- even if it is dominated by firms from a
completely different industry than your own
as various examples such as Apple’s iTunes
have demonstrated.
The problem, unfortunately, is that any lead
might be short lived. New ideas can come
from anywhere at any time. Add to that the
fact that it is getting easier and easier for firms
to clone their competitors’ products, and it is
clear that having just one or a few winning
ideas is far from good enough. To take and
hold the initiative, you need a pipeline that
can pour innovations onto the market at
what, by yesterday’s standards, would be a
blistering pace. You may only have a few
weeks’, or perhaps a few days’, head start on
your competitors, so there is no chance at all
to stand still. The ideal would be to be able
to innovate at the speed of life - that is, to be
so at one with your customers’ thinking that
you consistently deliver the new products
and services they are looking for at just the
moment they need them, and ensure there
never is a gap between what they ask for and
what you offer. And what matters is the speed

22 n Europe issue II 2009

Europe issue II 2009 n 23
 ICT innovation

at which customers are able to improve their
personal and professional lives, not the speed
at which new technologies become available.
As far as customers are concerned, genuine
innovation happens only when their daily
lives actually get better or their firms achieve
greater success as a result.
This is an ideal, of course - but it is
impossible for firms to even get close if
they use traditional methods of innovation
hampered by secrecy and strict need-to-know
policies. To aspire to match the speed of their
customers’ lives, firms must innovate at the
speed of their lives.
Those who get it right will reap big returns.
According to Arthur D. Little, “Top
innovators have 2.5 times more sales and get
more than ten times higher returns from their
innovation investments.” How, then, can firms
transform their innovation processes to deliver
the throughput they will need in the future?
The answer varies from industry to industry,
and from business to business. Central to the
success of many firms to date, however, has
been the concept of open innovation.
over the past 90 years. And it is a similar
story on the other side of the Atlantic. Only
24 of the companies listed when the FTSE
100 Index was established in 1984 remain in
the list today.
Innovation in Europe
In Europe, an important aspect of many
organisations’ Open Innovation Strategy
is the participation in European-funded
collaborative programmes.
The European Commission has provided
funding to support collaborative research
in ICT over a number of years through the
Framework Programmes schemes (FPs). The
FPs provide financial support of between 50
per cent and 75 per cent of the research costs
(depending on the type of organisation) for
agreed collaborative research projects. The
current scheme aims to provide €9 billion in
grants to support research in the ICT domain.
Formal collaborative research allows
companies to leverage technology and
insight from industry partners, suppliers
and universities through participation in
projects that are part of formal EU research
programmes. The ‘outreach’ provided by
such collaborative research provides an
invaluable perspective on the global science
base, and affords some protection against
new technologies that could disrupt current
business models.
In addition to undertaking the collaborative
projects themselves, BT currently participates

In open innovation, firms invite people from

outside their traditional R&D teams to take
part in the innovation process. They may be
people working in other parts of the company
- in sales, marketing, or customer support, for
example. They could be university researchers
and academics, business partners or suppliers.
They could even include the firm’s customers
and the public at large. Equally, adopters of
open innovation recognize that there are more
ways of getting returns on their innovation
investment than turning them into products
and services or using them to improve their
own efficiency.

Forward-looking companies that have

adopted open innovation have had great
results. In addition to achieving advances
that have improved customer satisfaction,
by stimulating innovation, companies have
brought many new products and services to
market. Studies of scientists and engineers,
for instance, have shown that those with
access to the widest variety of information
are the most creative. It stands to reason: if
innovation is a chain reaction, the more ideas
someone is exposed to, the more he or she is
likely to generate.

Looking back, it is clear how easy it is for

firms to lose the initiative and sink without
trace. Of the companies included in the
Fortune 100 when it was first published in
1917, 61 no longer exist. Of those that remain,
only 18 make the list today - and only two of
those have performed better than the average

24 n Europe issue II 2009


in three European technology platforms.
These are industry driven groups producing
Strategic Research Agendas to advise the EU
on the key research challenges that should
be addressed by future calls for project
proposals.
The financial support provided by these
funding programmes helps to lower the barrier
for companies to engage with collaborative
research. This reduced risk means that
companies can research areas earlier than
it could otherwise. The involvement of
partners in a collaborative project means that
additional skilled resources are available to
address complex research challenges that
could not be addressed by one organisation
working alone.
In a global environment many technologies
are interconnected and a single country or
even a large region cannot work in isolation.
Given this, funding programmes need to
be more flexible and allow non-EU players
to participate. There are also some global
challenges where there would be benefits in
working with equivalent funding schemes
in other regions to create a global initiative.
Then too, the process to review proposals and
allocate funding can be long and complex. As
technologies evolve faster many areas might
not be able to use these funding programmes
to support innovation. Another issue is that
projects that aim to address challenges which
cut across the organisational structure of the
Commission find it difficult to get funding
under the current funding programmes.
Mobile payment
Mobile
ICT systems
access
innovation
There is another important area where the
EU can drive the way to more innovation and
competitiveness. This is by creating a more
level playing field in the telecommunications
industry across the EU. This will have a
positive impact not only on those that provide
electronic communications services, but even
more importantly on those who use them:
residential and business customers.
Politicians often overlook the indirect benefits
of a competitive electronic communications
sector, as they tend to have the residential
customer more in mind than the business
customer. However, modern networked
IT solutions play an increasing role in the
competitiveness of European businesses.
They are an enabler to compete in a global
market place.
Competition in ICT helps businesses in all
sectors - whether these are major international
corporations or local businesses. The
availability of innovative ICT services attracts
more investment, and improves business
processes. Competition means lower prices
and forces incumbent players to become
more efficient, which ultimately leads to
lower costs for consumers. Lower costs for
communications and other ICT solutions
make international companies more likely
to invest in a country (it is not just about
manpower costs). Therefore, there is also a
direct and an indirect impact on employment.
All this makes ICT essential to future
economic growth and prosperity.
With its proposals for the Review of the
European Electronic Communications
Framework, the European Commission
has put forward the right key parameters.
They could help to regulate the electronic
communications industry in a more effective
and consistent way across the EU. It is now
up to the Member States and Members of
the European Parliament to make the right
political choices and not to fall into the trap of
favouring national champions or supporting
protectionist policies in times of economic
crisis. Open trade and open innovation are
key components of the solution to the current
situation.
We are all facing challenging times ahead and
the innovation agenda will be important for
Europe’s future success. The pace of change
will quicken, so we need an environment
in place that rewards innovation for the
benefit of European businesses and European
citizens. n
Europe issue II 2009 n 25
 ICT innovation

Complexity and innovation in the connected era

by Stephen Murdoch, Vice President & General Manager, Large Enterprise Business Unit, Europe, Middle East &
Africa (EMEA), Dell

Always-on connectivity makes our lives simpler and more efficient and stimulates innovation
and interaction with customers, friends and peers. Nevertheless, the infrastructure for this
connectivity has become too complicated and costly. Fortunately, new standards-based
computing and virtualization technologies, (that is, ‘cloud computing’) cost less, are easier to
maintain, and save space, energy and money. The Internet and social media (Facebook, and so
on.) make it easier to connect with customers, tap their ideas to stimulate innovation and offer
customers better products and services.

Stephen Murdoch is the Vice President and General Manager of Dell’s Large Enterprise Business Unit for Europe, Middle East &
Africa (EMEA). Prior to his current role, Mr Murdoch was responsible for defining, establishing and leading Dell Global Infrastructure
Consulting Services; he previously led Dell’s services and enterprise systems business in EMEA. Mr Murdoch spent many years at IBM
where, most recently, as Vice President of the Communications Sector, he was responsible for the entire telco, media and utilities industry
portfolio. At IBM, Mr Murdoch held a number of global, EMEA and UK senior management roles with experience spanning software
and services, storage, and enterprise systems.

Stephen Murdoch has a BSc (Hons) in Physics.

The IT industry has reached a crossroads,
shaped by the macro-trends of globalisation
and balanced by the more sobering reality of
recession and our increased responsibilities
relating to Green IT. Within that, the online
world is undergoing the most significant
transformation in its history, and there is a
blurring of professional and personal space
through the explosion in social media and
online communications. Change creates
opportunity for those that embrace it and
eagerly adopt new routes to innovation opened
up by mass usage of the Internet. The trick
is to harness all of this dynamism and make
sense of it, in order to provide innovative and
realistic solutions that can meet the growing
needs of today’s organisations.
Always-on connectivity However, somewhere along the way, the
underlying infrastructure has become too
The Connected Era is driven by a surge complicated. The same systems that deliver
in always-on connectivity - from mobile so much benefit can also be expensive,
technology and unified communications, to difficult to operate and hard to maintain.
RFID, overnight delivery and the immediate Some complexity is unavoidable, providing
needs of today’s global businesses. This differentiation and competitive advantage, but
connectivity opens up new opportunities for there is unnecessary complexity that needs to
innovation and interaction with our customers, be identified and removed for our vision of
friends and peers, utilising technology to innovation to become a reality.
make our lives simpler and more efficient.
“The Connected Era is driven by a surge in always-
on connectivity - from mobile technology and unified
communications, to RFID, overnight delivery and the
immediate needs of today’s global businesses.”

26 n Europe issue II 2009

Europe issue II 2009 n 27
 ICT innovation
“The small and medium business (SMB) sector is also making significant headway through
innovative technology programmes. UK-based gardening firm, Wriggly Wigglers, is making
the most of the Connected Era by implementing tools to ensure regular customer and
community interaction.”
Data centre management and cost
CIOs face escalating management and cost
issues in their data centres. Server sprawl,
storage constraints, data protection and
security concerns, compounded by ultra-
mobile always-connected devices, continue
to put pressure on resources and budgets. To
cope with these pressures and the worldwide
flood of digital data predicted by 2010,
users have found themselves adding more
machines, employing more staff and hiring
more consultants to manage it all.
More service at lower cost
The CIOs’ dilemma is that innovation is
typically constrained today, in times when we
need it most. A typical business spends only
30 per cent of its IT budget driving innovation
to support strategic business growth or for
cost control. That means 70 per cent of the
budget goes for ongoing IT maintenance.
This, combined with reduced budgets, means
CIOs must deliver the same - or greater -
levels of service at lower cost. CIOs need to
scale and protect their current environment
without creating more complexity by
realigning their investment.
Technology to the rescue
What has become clear today is that this 30/70
investment ratio is no longer sustainable. If the
EU is to meet its goals of fostering innovation,
research and entrepreneurship across Europe1,
and if organisations are going to ride out
the current recession, then the imbalance of
investment on maintenance versus innovation
needs to be quickly addressed by all sectors.
For this to happen IT must be simplified.
Ultimately, it is important that organisations
act now to address the spiralling problem of
IT complexity - ensuring long-term goals and
objectives are still achievable and innovation
does not suffer.
Fortunately, the proprietary systems that once
dominated data centres are steadily giving
way to standards-based computing that is
both more affordable and easier to maintain.
However, it is not just a matter of getting the
hardware right. Virtualization technologies
1
The EU Lisbon agenda: http://www.euractiv.com/en/future-eu/lisbon-agenda/article-117510
2
14-19 education and skills: http://www.dcsf.gov.uk/14-19/
28 n Europe issue II 2009
can make space in the data centre, save
energy and streamline manageability; data
can be de-duplicated and storage consolidated
and tiered. Solutions delivered from the
‘cloud’- via the Internet - are becoming more
attractive, economically, environmentally and
in terms of performance, and a great deal of
service, support and maintenance can now be
handled remotely.
Opportunity to innovate
The positive news is that organisations are
now exposed to more opportunities to innovate
than ever before. Fundamentally, there is
increased opportunity to interact directly
with customers. Listening to customers has
been forever redefined; whereas it used to
mean commissioning a customer survey, it’s
now about real-time engagement with your
customers (and critics) online and then using
those relationships to create a smarter, more
innovative, business. Tapping into the ideas
of your customers is like having an open
source R&D lab. In one example, a company
invited customers to share their ideas on the
Web for improving products and services;
they attracted more than 11,000 ideas and put
more than 280 ideas to use.
Innovative IT
The industry has many other examples
of innovative IT in action, not least in
the education sector. Solutions such as
unified communications have supported
local education and authorities in making
the virtual classrooms a reality. As well as
bringing more innovative learning techniques,
this technology is helping the sector meet
government directives regarding inclusion
and schooling of 14-19 year old students in
the UK2. By incorporating easy-to-use Office
Communicator Server (OCS) based voice and
video conferencing, which enables 360 degree
round table discussions, remote learners can
now see their peers and fully participate.
“The industry has many other examples of innovative IT in
action, not least in the education sector. Solutions such as
unified communications have supported local education and
authorities in making the virtual classrooms a reality.”
Location need no longer be a barrier to
education.
Small and medium business innovation
The small and medium business (SMB) sector
is also making significant headway through
innovative technology programmes. UK-
based gardening firm, Wriggly Wigglers,
is making the most of the Connected Era
by implementing tools to ensure regular
customer and community interaction. Social
media technology allows the company to
reach out to thousands of customers via
weekly podcasts from the Wiggly sofa. Using
the latest communications vehicles, such
as Facebook, Wriggly Wigglers keeps in
contact with the 1,375 customers currently
listed as friends on their profile page. Social
media has also helped them build a mail order
catalogue based on Wiki ideas generated on
its Facebook page by experts and customers.
This is just one of the many organisations now
utilising social media sites such as Facebook,
Twitter and YouTube to reach new audiences.
Despite sceptics, I believe much progress
has already been made in both the private
and public sectors. I continue to see more
examples of innovative programmes in action.
I have been involved in IT all my professional
life and believe we are embarking on our
most dynamic period of technological
innovation yet; opening up unseen levels of
customer intimacy to those that can harness
it. The spread of social media and inventive
communication methods, boosted by a real
hunger within the corporate world and public
sector to throw off legacy mindsets and get
serious about investing in the future, will
further open up the Connected Era. Managing
complexity whilst keeping us all connected
will continue to be the greatest challenge, and
this calls for smart IT investments that allow
CIOs to do more with less, as they focus their
energies and budgets on future innovation. n
 Mobile payment
Mobilestimulus
Innovation systems
access

The EU innovation agenda and recovery package

by Katie Miller, Director, Government Relations, EMEA, Nortel

The EU’s Economic Recovery plan, will inject money into the economy to combat the
global recession. Some €5 billion will go to trans-European infrastructure projects
including broadband. Much of the spending will likely support the EU’s Lisbon goals and
the EU Innovation Agenda, and go towards ICT development. This spending to promote
technical innovation, coincides with the rollout of a new generation of high speed broadband
technologies, both mobile and fixed, and will stimulate the offer of many new services.

Katie Miller is the Director of Government Relations for Nortel in EMEA; her career in regulation and industrial policy covers both
corporate and public sector perspectives. Ms Miller has previously held roles at Ofcom the UK regulator, RM plc and NatWest and has
undertaken consultancy work for companies such as The Economist and Royal Mail. Ms Miller is a fellow of the RSA, The Royal Society
for the Encouragement of Arts, Manufactures and Commerce, an associate of the Association of Project Managers, and of the Institute
of Mathematics and its Applications.

Katie Miller has an MSc in project management and a BSc in mathematics.

At the end of November 2008, EU
commission president, José Manuel Barroso,
set out a Recovery Plan for the EU to address
the economic crisis. He outlined how he
hopes this package will inject purchasing
power into the economy and address the
EU’s long-term competitiveness in line with
the Lisbon strategy for growth and jobs.
Among the specific measures included in
the announcement was €5 billion for trans-
European energy and broadband infrastructure
projects. With these new measures, could
we be in line for growth in European ICT
innovation?
In contrast to regulatory interventions,
industry is rarely shy when supporting new
government investment, so it is no surprise
the industry has responded positively to
the proposals in the Recovery Plan. Mark
MacGann, Director General of the body
representing the telecoms, IT and consumer
electronics industries in the European
Union, EICTA, said, “We are glad that the
Commission has understood that Internet
and the digital revolution need real political
commitment and fiscal incentives to ensure
a rapid return to growth and prosperity
in Europe.” It is hoped that the billions
of Euros that Mr Barroso has committed
to broadband investment in the Recovery
Package will support the Lisbon goals and
the EU Innovation Agenda, for advancing
developments in ICT, in particular. Beyond
the stereotypical support for more money, it
seems on this occasion industry may concur
with the policy objectives; there is optimism
that the money will stimulate innovation in
the EU.
The highest speed broadband yet
Timing is everything. Clearly, the imperative
to invest has been set by the economic
collapse, but a principal reason this public
investment is likely to promote technical
innovation, is that we are coincidentally on
the cusp of a new generation in broadband
technologies, both mobile and fixed.
In February 2009, in Barcelona at the
GSMA Mobile World Congress we saw
public demonstrations of live mobile high
definition international video calls using LTE
technologies, giving weight to the predictions
that leading operators will begin building new
networks this year, and more notably will be
offering commercial 4G mobile broadband
services from 2010.
In fixed networks, we have seen rapid take
up of 40G technologies to address network
congestion and lots of interest in the 100G
technologies expected later this year. In the
fixed access network, at least ten operators
worldwide are trialling the latest wave-
splitting technologies which promise to offer
more than 1Gb of symmetric broadband.
This symmetric bandwidth is valuable for
uploading video to social networking sites
and is important for business users as it
offers the same high bandwidth for both
upload and download. Operators are also
looking seriously at applying wave-division
technology in access networks because
it offers a lower total cost of ownership
compared to today’s fibre broadband
equipment. It enables operators to build just
one network to offer the broadband bandwidth
needed by businesses located in residential
areas and in areas where duct space is limited.
Investing for innovation
This public investment will mean that
industry can leverage the R&D spending in a
way that would not be possible if the money
just bought more of a mature technology.
By investing now, the money will stimulate

Europe issue II 2009 n 29

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30 n Europe issue II 2009

Decisive coverage of telecommunications strategy

both innovation and price competition,
not just lower prices. By investing now in
innovative technologies, public money can
generate demand and demonstrate a good
business case. This, in turn, will reduce the
risk for commercial investment in innovative
technologies, and reducing investment risk is
critical in current capital markets.
The funding, together with imminent
spectrum releases, will likely enable European
businesses and consumers to access these
technologies at the head of the curve, keeping
pace with other leading countries, such as
Japan. Keeping pace is important because
broadband is an infrastructure like roads and
airports which influences foreign investment
decisions and empowers regional economies.
For example, fast upstream and downstream
broadband enables businesses with branch
networks, supplier networks or businesses
who want to encourage home working to
improve productivity and reduce costs. Good,
symmetric broadband connections enable
suppliers to do more for their customers
remotely. They enable regional employees
(perhaps in lower wage areas) to interact with
company systems and colleagues as well as
those who work in metropolitan head offices.
Good symmetric broadband will make it
possible for us to easily share the videos
we capture of those exciting moments on
new HD video cameras with our family and
friends wherever they are.
By contrast, the main argument levelled
against this investment commitment is that it
is simply not enough; it is a drop in the ocean
- or more appropriately - like comparing
512Kb dial-up speeds to 1Gb broadband.
McKinsey analysis suggests over €300
billion will be needed to provide fibre-based
broadband access across the EU. However,
by targeting public investment, it is likely the
relatively small investment will unlock more
commercial investment because competition
rules suggest public investment will be used
where commercial investment is uneconomic.
Therefore, public broadband investment will
bring broadband to a greater proportion of
the business and residential population, which
in effect increases the overall market for
services delivered over broadband networks.
In turn, new content services and applications
become viable, and they increase the value
placed on broadband by users, giving them a
reason to pay a premium for better broadband.
If publicly funded broadband demonstrates
that business and residential consumers will
pay for faster broadband, then there will be a
commercial business case to bring broadband
to more areas. In this case, the public funding
may lead to many times more commercial
investment.
Driving broadband demand
Although investment in next generation
broadband networks will likely stimulate
innovation, it would be wrong to conclude
that associated new revenue streams are the
main incentives for commercial investment
in superfast broadband. There are too many
types of risk in this investment already.
The stereotypical investment strategy of
multinational businesses is to manage risk by
either investing in new technologies in mature
markets, or bringing mature technologies into
new markets. When it comes to broadband,
few countries have more than 30 per cent
take-up of broadband in residential markets,
suggesting demand is not mature. At the
same time, the economic climate brings a
degree of risk, and business cases are in
flux. Consumers are getting used to paying
for data instead of calls. We are beginning
to see competition between fixed and mobile
broadband networks with reports that 50
per cent of consumers in the UK city of
Manchester have swapped their fixed line for
a dongle. There is also significant regulatory
debate on the future of call termination
revenues and universal service obligations.
All of this means there are already more
types of risk in a network providers’ business
plan than would usually be entertained. So
the commercial drivers for investing in next
generation networks seem unlikely to be
the opportunity to sell new services to new
customers.
Still, there are three reasons that do seem to
be driving operators’ decisions to upgrade
- competition, capacity and cost-saving.
Telecoms markets are renowned for their
‘stickiness’ - the propensity of customers to
stick with their provider. This means that
there is enormous value in being first to
market with innovations. So the behaviour
of competitors is a significant driver when it
comes to investing in innovation. There is a
game to see who blinks first; no one wants to
be last to market.
Capacity constraints are also real drivers
since recent innovations to take-off, such as
the mobile broadband dongle and the BBC
iPlayer, have caused enormous increases in
the volume of data being sent over mobile
and fixed networks. iPhone users typically
use 20 times more capacity than the average
mobile phone user. This is putting a strain on
current networks and, accordingly, stimulates
interest in next generation technologies that
offer more capacity and use spectrum more
efficiently.
Next generation broadband technologies also
offer significant cost-savings, the importance
of which is growing as customers start to
Mobile payment
Mobilestimulus
Innovation systems
access
tighten their belts. The next generation
technologies are all-IP, and this simplicity
means technologies are more robust and
more maintenance can be handled remotely
reducing the cost of having engineers on the
road.
Improved broadband access
However, even if innovation and the
associated new revenue streams will not
drive commercial investment in broadband,
they will inevitably be a consequence. The
potential for innovation generated by next
generation networks derives from their
simplicity. The technology does not dictate as
many service boundaries compared to today’s
networks, which means it will be much easier
to maximise the contribution of the network
to services and applications. So, in addition
to the timing being right, investment in next
generation broadband is likely to stimulate
innovation, because their simplicity enables
network operators to play a greater role in
new services and applications.
This simplicity means it will become more
practical and affordable to extend enterprise
applications, such as unified communications,
outside of the enterprise. It means home
workers, or remote branches, will get the
same experience as head office staff. Not only
does this suggest businesses will improve
their relationships with remote employees
or suppliers, but they might also choose to
outsource more of their IT costs to network
operators, and save even more.
This is just one example where network
operators may be able to assume responsibility
for a process more efficiently or effectively
than might be achieved by businesses alone.
Networks have valuable information about
users such as their location, their identity and
the characteristics of the device they are using
to connect. The same simplicity might lead
to operators taking responsibility for privacy
or security, for example, for their business
customers by opening the interface of
enterprise applications to the network. As next
generation broadband rolls out to more areas,
we may see network operators offering new,
innovative services to business customers.
The timing is right for government investment
in broadband, and though network operators
are faced with an enormous degree of risk
today, this government intervention in the
market improves the prospects for innovation.
n
Europe issue II 2009 n 31
 Mobile service

Mobile service intelligence

by Mark Quinlivan, CEO, Carrier IQ

Today’s complex service environment is hard to control without adequate data. Most of the
traditional ways of measuring network services are based upon the use of network measurements
that quite often do not give an accurate picture of the end user’s experience. This is particularly
true for data-based services. Mobile Service Intelligence uses information from today’s highly
sophisticated handsets, while in normal use, to monitor true customer experience both to assess
service quality and, importantly, to predict future revenue opportunities.

Mark Quinlivan is the CEO of Carrier IQ; he has over 23 years of domestic and international management experience. Most recently,
Mr Quinlivan was the COO of edocs, acquired in 2005 by Siebel Systems. Before edocs, Mr Quinlivan held senior positions at Lucent Technologies including as SVP
of Worldwide Consulting and Integration. Prior to Lucent, Mr Quinlivan held senior management positions at Ascend Communications and Stratus Computer.

Mark Quinlivan earned an undergraduate degree in Management and a Masters degree in Computer Science from WPI, and completed the PMD program at the
Harvard University School of Business.

In a mobile world where devices are
increasingly expected to access more data,
perform more functions, and live off-line
as well as off-portal, Mobile carriers and
handset vendors need far more insight into
the way networks and devices combine to
deliver mobile services. It is a world that has
expanded far beyond voice and SMS; it is no
longer enough just to know how the network
is performing, how much the customer is
spending or the phones’ capabilities.
The growth of mobile broadband services
among European carriers amplifies the need to
connect the dots to manage and improve the
quality of the end-to-end customer experience
and be able to segment this data in detail by
device type, application and location. This
is particularly challenging when no network
traffic is generated; for instance, when a user
attempts - and fails - to access a data service
or when it is the speed of the response of the
device that matters.
With the arrival of new techniques for
delivering detailed and accurate data about
usage and experience at the handset, carriers
are finding new ways to improve customer
satisfaction. Mobile Service Intelligence uses
information from phones while in normal
use to monitor true customer experience both
to assess service quality and, importantly, to
predict future revenue opportunities.
Tracking customer needs
The European mobile market is constantly
evolving but quality remains a critical
differentiator, whether you see the mobile
industry as a leading-edge content provider
or as a utility pipe that delivers third-party
offerings. Gone are the days when services
were just a network with a phone at the end.
Today’s services are the result of a complex
value chain including content providers,
aggregators, gateways, and handset, laptop
and device applications. As a result, it is no
longer sufficient to measure the quality of
the component parts alone; operators need to
know about the end-user experience and the
way they consume the delivered services.
The customer expects decent data, music,
video and/or games, not just quality voice
communications. Like with other services,
when expectations are not met consumers
simply go to another provider.
Meeting customer expectations by improving
a service or a handset in isolation is
increasingly difficult if you do not know

32 n Europe issue II 2009


“To accelerate mobile content
usage and uptake during the
last ten years, carriers have
been increasingly adopting an
open network approach.”
exactly what is happening as the customer
sees it. Sure, carriers can deploy drive testing,
use network probes and protocol sniffers,
wait for returns, conduct user surveys, or just
hope that customers will call in describing
their experiences. The problem is that none
of these options really gives a picture at the
level of detail needed or within the timeframe
required.
Without detailed and accurate data, carriers
miss opportunities to improve customer
services and, importantly, to anticipate threats
to revenue or opportunities. In fact, recent
evidence suggests that some of the KPIs (key
performance indicators) carriers presently
use to manage their businesses have a limited
impact on overall customer satisfaction, so
crucial in the current market climate. For
instance, one commonly finds traditional
voice-based metrics being used to monitor
network quality including data services, and
with very few metrics that directly measure
data services and provide true indications of
end-point, customer’s device, performance.
Operator challenges
In this world of complex services, operators
can play a range of possible roles - from total
service provider to pure data transport. Data
transport is a commodity business that is
unlikely to bring operators new revenues. On
the other hand, many operators that tried to
be total service providers have since elected
to provide an intelligent pipe in collaboration
with established content brands (like Google,
Yahoo and even Apple) giving consumers
what they crave whilst keeping the door open
to new revenue opportunities.
So the operator has two challenges, if their
product is a commodity, the differentiation is
based on price and customers’ experience. If
the operator is an intelligent pipe, it needs to
acquire the intelligence to play this role. The
challenge to provide this intelligent insight
is being able to understand, evaluate and
strategise about areas which have previously
remained hidden from the operator. Two
examples articulate this problem well,
especially in regards to mobile content:
To accelerate mobile content usage and
uptake during the last ten years, carriers have
been increasingly adopting an open network
approach. To achieve this they involve
numerous third-party content providers, who
use the carrier’s network to attract their own
subscribers. This indirect relationship means
that carriers who already experience severe
limitations measuring the usage and usability
of content are now challenged to measure the
even wider field of content distribution. When
they can measure how content is consumed on
the device itself, operators get a better picture
of the customer satisfaction and usage levels.
A specific example comes from an operator
that was monitoring data services to assist
them in selecting between equipment vendors.
The operator was using traditional ‘dropped
calls’ statistics to measure data quality.
Investment decisions were based on this and
other information. When the actual throughput
was measured based on delivered services
the results were very different; the number
of dropped ‘data calls’ was shown to have
very little impact on total data throughput
or the customer’s experience. In effect, the
historical measures did not accurately provide
the needed information and could have led the
operator to make incorrect business decisions.
Traditional methods including surveys,
network monitoring and device management
tools all work well, but they do not give the
depth of insight into service quality and
customer experience required. Now, as phones
and devices become smarter, more capable
and more complex, it is possible to use the
device itself to measure service quality and
user experience at the device - where the
customer receives the service - and obtain
a level of insight previously unavailable to
operators.
Mobile service intelligence
This approach is called Mobile Service
Intelligence; it uses the mobile phone or
broadband dongle itself, combined with
advanced data processing applications to
provide detailed metrics. These metrics
directly represent the quality and nature of the
services being delivered to the customer base.
Mobile Service Intelligence is able to do this
by analysing data on usage patterns and fault
conditions by type, location, application or
network performance from millions of users,
even when that functionality is independent
of the network. This analysis puts the ‘IQ’ or
‘smarts’ into the data collected.
For example, a carrier launching a new
service targeted at a certain age group,
initially has strong take-up, but then it tails
off. The operator is then uncertain whether
this is due to market saturation or up-take
Mobile payment
Mobilesystems
access
service
issues and cannot resolve the problem using
current methods.
By using Mobile Service Intelligence,
operators can monitor services in detail,
allowing them to quickly identify problems
at the root. For instance, it may be that the
limited take-up is not due to lack of demand,
but to the difficulty users have accessing the
service on the first attempt. With this insight,
the operator working with the handset or
application vendor can resolve the problem
early in the product’s life cycle and use an
advertising push to drive a new wave of take-
up.
This new approach can also help operators set
new KPIs to improve the customer experience.
For instance, an operator’s product manager
hears complaints from the field regarding a
service, but each of the internal departments
claim, based on their own operating statistics,
that their part of the solution is functioning
well. Mobile Service Intelligence techniques
helps classify the problems and create new
KPIs based on actual customer experience.
As a result, business units can track customer-
focused rather than equipment-focused KPIs
and ensure that investment and improvement
choices are targeted for customer benefit.
Actionable intelligence
Every division and every business unit can
use Mobile Service Intelligence applications.
A recent report by Tony Cripps at Ovum
called, ‘Mobile service metrics: overcoming
the experience gap’, highlights the importance
of this intelligence. Without device-side
insight, operators miss the opportunity
to improve the customer experience and
increase revenues. The report concluded
that there was a high degree of interest in
utilising such data by a broad spectrum of
vendors, including suppliers in the network
and service management space, mobile
device management, data warehousing,
business intelligence and customer care
arenas. This new generation of ‘actionable
intelligence’ is increasingly sought after and
operators have come to recognise the value
of actively managing the business towards
end customer experience based on insight
and differentiation. Carriers will compete to
offer content and service providers a value
proposition beyond simple data transport.
Mobile Service Intelligence can provide the
insight and differentiation that helps wireless
operators make smart business decisions
that can dramatically lower operating costs,
increase customer satisfaction, reduce
customer churn and increase revenues. n
Europe issue II 2009 n 33
 Mobile Internet

Mobile Internet opportunities abound

by Sean MacNeill - Vice President & General Manager, Global Services and Support, Openwave

The mobile Internet is growing rapidly; 25 per cent of the UK’s population already use the
mobile Internet. It has always been a challenge to access the Internet using mobile devices
given the small screen and, until recently, slow speeds. The operators’ efforts to restrict
mobile access to a few ‘approved’ websites has frustrated users and slowed uptake, but this is
changing. Lower data tariffs, conversion of PC formats to mobile friendly screens are driving
user adoption of mobile Internet.

Sean MacNeill is the Vice President and General Manager of Global Services and Support for Openwave. Prior to this position, Mr
MacNeill was Openwave’s VP and GM of Sales for the Americas region. Prior to joining Openwave, Mr MacNeill was President and Chief
Operating Officer at Dynavar Corporation and led the sale of the company to Sun Capital Partners who merged Dynavar with Solunet
Inc. where he served as Chief Operating Officer. Before Dynavar, Mr MacNeill held a variety of senior level management positions in
sales, marketing, and operations for such companies as Vocalscape Communications, a VoIP software developer, and Intrinsyc Software,
Inc., a mobility software and services company.

Sean MacNeill earned a B.A. with distinction and an M.B.A. from the University of Victoria in British Columbia, Canada.

The mobile Internet has taken off and is
likely to become the medium that bridges
the digital divide worldwide. In Europe,
interconnectivity through the mobile Internet
has become an integral, irreplaceable part of
many people’s lives. Analyst firm Forrester
predicts that 125 million Europeans will
access the mobile Internet by 2013, more
than tripling today’s users. According to a
December 2008 comScore report, 25 per cent
of the total UK population now accesses the
Internet from a mobile device, up nine per
cent compared with last year.
So, what are the key drivers for mass adoption
of the mobile Internet in Europe, and how
can companies leverage the mobile Internet
to develop products which are relevant to
ordinary consumers within the mobile eco-
system?
Using the Internet on mobile devices has
historically proven to be a challenging feat,
specifically with regards to harnessing the
power of a system that was designed to be
used and viewed on personal computers with
large screens and at broadband speeds.
Traditionally, we had a hybrid world
structured, essentially with two Internets,
one for mobile and one for the desktop. Slow
networks, expensive mobile infrastructure and
an overall poor user experience have hindered
mass adoption of the mobile Internet leaving
consumers frustrated. In preventing simple
access to the Web, ‘the operators’ ‘walled
gardens’ limited their ability to increase data
ARPU (average revenue per user) and offer
other revenue opportunities. Mobile phones
are, by nature, constrained devices with
limited screen size, memory and supported
content. However, they are always on, always
with you and always yours, making them one
of the most personal items you own.
As handsets advance, and tariffs become more
data-friendly, mobile operators can no longer
limit access to just a few sites, they must
enable an open environment in which general
Web content, not specifically designed for the
mobile device, can be delivered (including
Java, Flash and other richer media content
types). In addition, the environment must
provide for promotion of content partners and
preferred services to a user population who
are discovering, in increasing numbers, that
the mobile Internet is starting to look like the
desktop experience. This has led to a number
of other, non-traditional players, entering the
mobile Internet market.
In February, France Telecom-Orange
announced a large push into the combined

34 n Europe issue II 2009

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Europe issue II 2009 n 35

 Mobile Internet
“Interestingly, as the mobile Web opens up opportunities for external players, there’s been
real innovation in revenue generating models as well.”
mobile and PC Internet space, through a
joint deal with HP. Skype announced deals
with Nokia and Sony Ericsson to integrate its
service into several different phone models.
Before Christmas, the operator Hutchinson
and INQ, the handset vendor, focused on
social networking, launching the INQ1, which
built data services such as Facebook, MSN
and eBay directly into the software of the
handset. The network infrastructure to bring
these types of services to life was highlighted
by Telstra’s announcement of the fastest
mobile broadband, clocking in at 21mbps.
With the traditional walled gardens coming
down, mobile software companies are
helping operators avoid becoming bit pipes
that merely transport data. By offering a key
set of high-value services, the carrier instead
serves as an ‘intelligent smart pipe’ to their
subscribers, ensuring a great user experience.
As users connect directly to the Internet or via
applications, whole new areas of innovative
businesses and services are starting to appear,
such as application stores.
As we are already seeing in the traditional
Web, niche information and personalised
content are usurping mass market ‘hits’.
We now see major brands prioritising the
customer experience and exploring the
best ways to reach their customers through
what some are calling User Experience 2.0,
an attempt to proactively unite users with
relevant content and services. One Internet for
all devices, where the content is fast, secure
and easy-to-use, driving mass adoption and
offering huge revenue opportunities in Europe
is where mobile Internet is headed.
Providing a more personalised experience
means allowing users to share, collaborate
and exploit content to extend their online
activities and communities into the mobile
space. The goal is to make content discovery
much simpler and more targeted, eliminating
the awkward left-to-right scrolling when
browsing, presenting the most relevant
content first, allowing for intelligent inter-
website navigation. It is a dynamic process
of interpreting the content being served
and enhancing and adapting it on the fly to
provide the best possible user experience.
To this extent, one of the interesting
developments over the last 18 months has
been the development of open platforms
36 n Europe issue II 2009
that can be used by developers to create
applications. These do not necessarily access
the mobile Internet, but draw on mobile data
services, and sometimes GPS technology, to
create strong customer-focused applications.
The iPhone App Store was one of the first,
incredibly successful incarnations of this
model. It has spurred innovation all over
the world as developers are continually
creating relevant and exciting products for
consumers. These applications can range from
games, to social networking applications,
to GPS applications, and everything in
between. Nokia’s announcement that it will
be developing its own app store similar to
Apple’s is an indication that the industry as a
whole will be moving in this direction.
The reason why applications succeed is that
they can provide a much more personalized
experience, which allows users to share,
collaborate and exploit content to extend
their online activities and communities
into the mobile space. The goal is to make
content discovery much simpler and more
targeted, while eliminating the awkward left-
to-right scrolling when browsing. It becomes
a dynamic process of interpreting the content
being served and adapting it on the fly to
provide the best possible user experience.
Since the platforms are open, they are wholly
available to canny entrepreneurs. Facebook,
which runs a similar system, has over 600,000
developers worldwide, many of whom are
running successful businesses just through
application development.
Interestingly, as the mobile Web opens up
opportunities for external players, there’s
been real innovation in revenue generating
models as well. Mobile advertising, in
particular, promises to dramatically reshape
business models and presents new revenue
opportunities for all players in the value chain,
but it is critical for the industry to focus first
on delivering a great open Internet experience
to everyone. To this extent, understanding
the preferences and behaviours of the user
population, with due consideration to privacy,
before developing the scope of advertising,
will be critical. It is a fine balancing act
between monetizing new opportunities
presented by the mobile Internet without
alienating the user base. It is not something
that will be solved overnight, and there will
undoubtedly be consumer backlashes. There
have been notable examples from the PC
Internet industry - such as the user backlash
to the Beacon product from Facebook, and
Phorm from British Telecom.
In short, there are opportunities within the
entire mobile eco-system for innovation.
While the operator is still the main control
point, there are countless other areas for
innovation, including mobile Web-specific
applications, mobile applications, mobile
advertising delivery networks and much
more. Consumers must be nurtured and
brought along with the new technologies or an
increasingly complex eco-system will cause
users to feel that they are being exploited just
for the sake of new revenue streams. n
Connect-World is
celebrating its 12th
anniversary
Through the years, Connect-
World’s authors told of the rise
of mobile, of fibre, of wireless
and of broadband; they told of
the dot.com meltdown, of
digital inclusion and conver-
gence, of standards and break-
throughs, the rise of IP and
the fall of switching and of the
regulatory turnaround.
In every issue of Connect-World
heads of state, ministers and
regulators, heads of
international institutions and
leaders of industry speak of
what the ICT revolution, as it
happens, means to the people
in their regions of the world.
www.connect-world.com
 Mobile Satellite
payment
Mobile systems
access
spectrum

Mobile satellite and spectrum harmonisation

for innovation
by Stewart White, CEO, Stewart White Consulting

Mobile service innovation, especially in regions poorly served by traditional networks, depends
upon the availability of broadband services that satellite transmission can bring. The EU’s
recent regulatory initiatives will harmonise the 2 GHz S-band throughout the EU and make
it available, on a competitive basis, to groups seeking to introduce EU-wide mobile satellite
services. The regulatory certainty this provides will reduce the risks faced by satellite operators
and foster investments to meet the increasing consumer demand for ubiquitous, cross-border
services.

Stewart White is the CEO of Stewart White Consulting; he is also acting as the Public Policy Advisor of Solaris Mobile. He served
previously as the Group Public Policy Director of Vodafone Group. Originally from Australia, Mr White moved to Europe to join a UK
based law firm where he advised on satellite related issues for the Murdoch group and on the first satellite procurements of SES-Astra.
He has advised a number of satellite operators, such as PanAmSat and Thuraya, as well as service providers such as CNN, and has
been an expert advisor to the European Commission on a range of policy issues in the ICT sector. Mr White has had a long involvement
with the ITU and has also advised a number of governments on sector reform, drafting legislation to implement and establish regulatory
authorities, drafting licences and interconnection agreements, particularly in the Middle East.

Stewart White is a lawyer by training and has spent more than 25 years specialising in satellite law, regulation and policy as well as
other regulated sectors.

With the European Commission’s objective
of facilitating the introduction of innovative
communications underway, and having
focused their attention on a harmonised
authorisation for mobile satellite services
(MSS) and spectrum, there remain challenges
aplenty. Keeping on schedule is first among
them. How the Commission is able to do this
will have significant implications within the
EU and beyond.
Regulatory certainty can provide a welcome
backdrop against which satellite operators and
their investors may evaluate the substantial
risk over the long lead times involved in the
introduction of satellite-delivered services.
Such certainty should be seen as an important
public policy goal, both at a European Level
and against the overarching processes of
the International Telecommunication Union
(ITU) to secure relevant space segments, and
coordination of proposed satellite services
with other potential satellite systems.
With increasing consumer demand for
ubiquitous, cross-border services, the
Commission has been aware of the public
policy benefits of adopting a harmonised
regulatory framework for delivery of mobile
data multicasting and voice services across
the community as part of the Lisbon agenda1,
however this is the first time that they have
adopted such a framework.
Background
On December 3, 2004 the Council of Ministers
concluded that an effective and coherent
use of radio spectrum was essential for the

1
The Lisbon strategy is an action and development plan for the European Union set out by the European Council in Lisbon in 2000.

Europe issue II 2009 n 37

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38 n Europe issue II 2009
 Mobile Satellite
payment
Mobile
Regulatory systems
access
spectrum
affairs

“Where costs are levied by Member States for national authorisations, doing so on a cost-
recovery basis is the best way to ensure that the EU’s public policy objectives are met.
Indeed, the European Framework Directive7 mandates that National Regulatory Authorities
(NRA) take appropriate measures when levying fees to ensure that there is no distortion or
restriction of competition, to encourage efficient investment in infrastructure, and to promote
innovation.”

development and growth of competitive and
flexible electronic communications services
and to offer greater consumer choice.
This was followed by a resolution of the
European Parliament on February 14, 2007
entitled ‘Towards a European Policy on the
Radio Spectrum’2, which focused on the
importance of communications for rural and
less developed regions and the deployment
of broadband by various means to provide
efficient solutions to achieving universal
coverage in the 27 Member States. On the
same day, the European Commission adopted
the Spectrum Decision3 allocating the 2GHz
S-band spectrum to MSS, including those with
a complementary ground component (CGC) in
all Member States. This decision complements
an earlier Commission Communication of
April 26, 2007 on European Space Policy - a
common regulatory framework for electronic
communications networks and services aimed
at encouraging ubiquitous service throughout
the European Union.
Following the allocation of S-band spectrum
to MSS through the Spectrum Decision, on
June 30, 2008 the European Parliament and
Council adopted its MSS Decision4 defining
the European Selection and Authorisation
Process (ESAP) for systems providing MSS
in the S-band. Although the MSS Decision
establishes a harmonised spectrum allocation
process, the subsequent authorisation to
use spectrum in national markets is the
responsibility of individual Member States.
Once the Commission’s selection process
is concluded, the selected operators will
submit a notification to Member States before
exercising their rights under the selection
process5. Because the selection results hold
for all Member States, each State has only
to grant the selected applicants the right to
use the S-band spectrum already assigned.
No additional competitive process must be
established by Member States. These national
authorisations will apply to the MSS and to
the CGC6, both of which may be deployed as
part of the MSS network.
Where costs are levied by Member States
for national authorisations, doing so on a
cost-recovery basis is the best way to ensure
that the EU’s public policy objectives are
met. Indeed, the European Framework
Directive7 mandates that National Regulatory
Authorities (NRA) take appropriate measures
when levying fees to ensure that there is
no distortion or restriction of competition,
to encourage efficient investment in
infrastructure, and to promote innovation.
To that end, any national authorisation
framework that imposes authorisation costs
above those of administrative cost recovery
creates an entry barrier for providers of
alternate communications platforms, and
tends to undermine the economies of scale for
user equipment and service charges delivered
through the harmonised single market
spectrum allocation process. This would
fragment the internal market.
Commissioner Reding recognised the need to
alleviate the necessity to seek authorisations
from individual countries within the EU
in announcing the MSS Decision to allow
selected operators to provide their services
using 2GHz spectrum ear-marked for the
purpose EU-wide and not only in metropolitan
areas. Importantly, she recognized that:
“these satellite services depend on substantial
investment and therefore need simple and
swift procedures as well as long-term legal
certainty. This is why the Commission,
in close cooperation with the European
Parliament and the Council of Ministers,
set up, in a record time of only 10 months, a
single EU procedure for selecting interested
operators of mobile satellite services. There is
now one market, not 27 in Europe for mobile
satellite services. Henceforth, the ball is in
the camp of the industry.”
“In order to meet the
timetable laid down in the
MSS Decision not only does
the Commission now need to
adhere to the timetable itself
in order to issue the relevant
authorisations, but Member
States through their NRAs
also have an important part
to play.”
Harmonising process
The sector has accepted the challenge laid
down by Commissioner Reding and broadly
welcomed the opportunity for simple and
swift authorisation procedures and for long-
term legal certainty, but the ball is not only
in their camp. In order to meet the timetable
laid down in the MSS Decision not only does
the Commission now need to adhere to the
timetable itself in order to issue the relevant
authorisations, but Member States through
their NRAs also have an important part to
play. Each NRA must observe the timetable in
issuing the necessary authorisations for each
Member State for the space segment, the MSS
component (although in some Member States

2
Official Journal of the European Union, 287 E, 29.11.2007, p. 364.
3
Commission Decision on the harmonised use of radio spectrum in the 2GHz frequency bands for the implementation of systems providing mobile satellite services, February 14, 2007,
Official Journal of the European Union, L43/32.
4
EC DEC 626/2008/EC of the European Parliament and Council of June 30, 2008 on the selection and authorisation of systems providing mobile satellite services.
5
Directive 2002/20/EC of the European Parliament and of the Council of March 7, 2002 on the authorisation of electronic communications networks and services (Authorisation
directive).
6
In this context, Member States should also be aware that although the European Decision identifies the S-band for MSS and CGC, it does not mandate MSS operators to deploy a terrestrial
component (CGC) in the band.
7
Directive 2002/21/EC of the European Parliament and of the Council of March 7, 2002 on a common regulatory framework for electronic communications networks and services.
(Framework Directive)

Europe issue II 2009 n 39

 Satellite spectrum

“Under the current Commission timetable announced on December 19, 2008 a selection
Decision is expected between May and August of 2009 - depending on the results of the first
selection phase and the cumulative spectrum requirements of the credible applicants.”

reliance for the MSS may simply be placed
on the Commission’s blanket authorisation)
and the necessary terrestrial authorisations for
CGC.
On October 7, 2008 the Commission received
four applications for S-band spectrum from:
• ICO Satellite Limited element of regulatory uncertainty; especially
• Solaris Mobile Limited
• Inmarsat Ventures limited in 2009 or otherwise well ahead of the
• TerreStar Europe Limited
These applicants are now subject to a two-
phase selection process. During the first
phase, the technical and commercial ability
of the candidates to actually launch their
systems, as well as their compliance with a set
of contractual and manufacturing milestones,
will be assessed. Applicants successful in the
first phase are required to have committed
and demonstrated substantial investments
and procured the construction and launch of
the necessary satellite in order to meet the
timetable laid down by the Commission in
their Call for Applications8.
If, following this phase, the Commission
determines that there is insufficient spectrum
available to award each viable applicant the
spectrum that it has sought a second selection
phase will take place. The second phase
involves assessing candidates against four
pre-defined selection criteria, those being:
1. consumer and competitive benefits
provided, including rural coverage and the
number of users supported;
2. spectrum efficiency;
3. the speed at which all Member States will
be covered by S-band MSS and
4. the capacity of the systems to fulfil public
policy objectives.
Timeline
Under the current Commission timetable
announced on December 19, 2008 a selection
Decision is expected between May and August
of 2009 - depending on the results of the first applicants, regulatory certainty and timely
selection phase and the cumulative spectrum authorisation of their proposed MSS services
requirements of the credible applicants. This remains a goal yet to be delivered. The
represents a delay of more than one month industry world-wide is watching with interest
in the initial indicative timeline published these developments in Europe. n
in the Commission’s Call for Applications.
The Commission is working hard to meet
the timetable, since any delays introduce an
applicants who intend to launch their satellite
Commission’s prospective target launch date
of 2011.
A further element of uncertainty involves
the status of the UK administration’s ICO-P
satellite filing with the Radiocommunications
Bureau (BR) of the ITU, which received
Connect-World is
notification on January 26, 2004. ICO
launched an action on September 26, 2008 celebrating its 12th
against the Parliament and Council10 seeking anniversary
orders that the MSS Decision is void for a
number of reasons including that the MSS Through the years, Connect-
Decision did not acknowledge the existence
World’s authors told of the rise
of its pre-existing rights derived from the ITU.
of mobile, of fibre, of wireless
This aside, the Commission is proceeding with
the selection process as announced.11 Recital and of broadband; they told of
10 of the MSS Decision recognises that the the dot.com meltdown, of
regulations of the ITU provide procedures for digital inclusion and conver-
satellite radio frequency coordination as a tool gence, of standards and break-
for management of harmful interference, but throughs, the rise of IP and
do not extend to selection or authorisation. the fall of switching and of the
regulatory turnaround.
Conclusion
In every issue of Connect-World
In conclusion, the regulatory landscape within
the EU is being changed for those seeking to heads of state, ministers and
introduce MSS services in the 2GHz S-band. regulators, heads of
The policy objectives stated in the MSS international institutions and
Decision have been broadly supported by leaders of industry speak of
all of the applicants in the ESAP process. It what the ICT revolution, as it
remains to be seen whether this move by happens, means to the people
the European Commission, the Council of in their regions of the world.
Ministers and the European Parliament will
deliver in a timely way the public policy
objectives stated in the MSS Decision and www.connect-world.com
9
whether this can therefore be regarded as a
successful move into future pan-European
spectrum planning and authorisation. For the

8
European Commission, Administrative Procedures (2008/C 201/03): Call for applications for pan-European systems providing mobile satellite services (MSS).
9
http://ec.europa.eu/information_society/policy/ecomm/current/pan_european/index_en.htm.
10
Case T-441/08 (2009/C 6/68).
11
http://ec.europa.eu/information_society/policy/ecomm/current/pan_european/index_en.htm. The Commission has said, “In October 2008, a request for annulment of the legal basis for
the selection procedure has been brought to the Court of First Instance of the European Communities. Without prejudice to the legal prerogatives of the Court, it is not expected that the
request would impact the timing of the selection process.”

40 n Europe issue II 2009

 Mobile Regulatory
payment
Mobilesystems
access
Mobileaffairs
data

Change today for tomorrow’s demands

by Ben McCahill, Director of Mobile Strategy, Tellabs

According to a recent survey, the future of the mobile industry is increasingly tied to data.
A recent survey of more than 50,000 mobile users in the UK, France, Italy, Germany, Spain
and the United States showed that more than half of the mobile data users in those countries
expect to increase their usage in the next two years and that many new users will join them. To
efficiently meet the demand, operators need to begin upgrading their platforms now.

Ben McCahill is the Director of Mobile Strategy at Tellabs. Mr McCahill has held various roles since he joined Tellabs in R&D, Customer
Services, and Product Management as well as serving as Head of the regional Business Solutions Group in EMEA. Mr McCahill left
Tellabs for three years to join e-Net, an operator in the fibre wholesale market and re-joined it in his current role. Mr McCahill has over
15 years experience in networking and ten years in telecoms; prior to joining Tellabs, he worked in the UK, USA and the Far East.

Ben McCahill holds a Bachelor Degree in Engineering from the University College Dublin and a Master of Science degree from Heriot
Watt University, Edinburgh.

The pace of change in the mobile industry
is arguably faster than any other. The mass-
market uptake of mobile Internet among
subscribers, together with the arrival of the
‘applications supermarket’ business model
and the proliferation of user-generated
content, shows the pace at which the mobile
industry is evolving. It is moving in an
exciting new direction where data functions
and services provide new opportunities for
people to communicate and interact with one
another seamlessly while on the move.
As the mobile industry as a whole becomes
more data-centric, operators are getting more
and more nimble. This puts them in the best
position to react as quickly as possible to
meet consumer expectations. Of course, when
it comes to forecasting what mobile customers
will want, a crystal ball would be handy,
but here in the real world, the best course
is to cultivate an in-depth understanding of
customers and their requirements - now and
for the future.
Knowledge is power
Armed with comprehensive market data,
operators can prepare their networks for
a large array of differentiated mobile data
services and deliver the quality that those
services deserve.
We commissioned the Nielsen Company to
undertake the first major in-depth survey of
mobile users during the economic downturn.
The survey investigated the future intent of
current users and non-users of ten mobile data
services, covering mobile email, multimedia
messaging (MMS), music downloads, mobile
video, LBS/GPS, mobile Internet, uploading
photos, game downloads, software/application
downloads and mobile commerce.
More than 50,000 mobile users in the UK,
France, Italy, Germany, Spain and the
United States participated in the study. The
survey showed that more than half of the
approximately 200 million mobile data users
in those countries expect to increase their
usage in the next two years, increasing the
network traffic from services such as mobile
Internet, email, photo uploading and MMS.
Mobile data usage up
The results provide detailed insight into
mobile data user attitudes. Despite the
economic slump, consumers intend to
increase use of the analysed mobile data
services dramatically; more than half of the
current mobile data users expect to increase
use in the next two years.
Mobile Internet leads demand, followed by
email, MMS, uploading photos and software/
applications download. In most countries,
convenience tends to be the leading lifestyle
factor driving use of services, followed by
entertainment and then work and socialising.
For operators, the positive trend in demand
shown by the survey can represent a multi-
million dollar opportunity.

Europe issue II 2009 n 41

 Mobile data
Addressing user concerns
Mobile users continue to raise concerns about
cost, speed and quality of service. So while
it is clear that mobile data is here to stay
operators must also note the issues highlighted
by the survey: cost (too expensive or unclear),
speed, quality and reliability.
The results underline one key point: if
operators want to meet users’ expectations,
they must act now to make sure their networks
are ready for the growth in demand for high-
speed mobile services.
Is your network up to the task?
Pressure on networks will be compounded
since 41 per cent of European and 71 per
cent of US respondents anticipate daily use of
mobile Internet services. Mobile email is on a
similar growth trajectory and it is increasingly
available on a range of mobile devices.
The sustained increase in high-bandwidth
applications and corresponding data traffic
will create significant challenges for mobile
operators looking to maintain profitability.
Since most of the growth is expected within
the next 12 months, this issue demands
immediate attention.
Operators who address these challenges
early will take advantage of the increasing
demand, while enhancing margins. However,
this demand presents operators with a
further challenge. Network development
critical to future competitive differentiation
and success is required at a time when the
telecommunications sector - like everyone
else - is in a period of economic turmoil.
Yet even conservative estimates suggest that
there will be 200 million broadband-enabled
mobile devices in use by 2011. This trend
and the accompanying consumer hunger for
services as outlined by the Nielsen survey
means that it simply is not viable to delay
investments that will enable operators to
manage the rapid technology change required
to support these services.
A reluctance of some telecommunications
players to move quickly is understandable.
Many are used to making incremental, tactical
changes to their network capabilities and,
until recently, that was a reasonable approach.
The pace of technological evolution and
innovation is relentless. Reactive network
42 n Europe issue II 2009
changes no longer enable operators to stay
ahead of application and service development.
Operators could be left behind as technology
trends overtake their networks, and services
running with more complex combinations
of transport protocols demand increased
bandwidth.
Challenge and opportunity
Now is the time to take a strategic approach
to network development. For some operators,
that will mean radically adjusting cost
structures to reduce operating expenses,
streamline operations and increase backhaul
efficiency.
The key to success lies in a forward-looking
strategy based on the concept of a single
provisioning model. This approach will enable
operators to deliver consistently fast, accurate
and scalable services regardless of data type.
If backhaul networks are to support the new
wave of multi-protocol services, operators
must restructure their networks around
flexible, transport-agnostic, managed anchor
points that remain constant, but enable
attached components - services and protocols
- to be developed as required. This strategy
maximises the network’s ability to support
multiple protocols, service delivery options
and traffic types at the same time. It also helps
network planners select the most economic
transport protocol for services while ensuring
vital quality of service.
Given the current economic climate, it
would be both imprudent and unsustainable
to suggest immediate, large-scale, backhaul
replacement. It is possible, however, to
plan changes that will meet the anticipated
rise in demand for services and provide
profitable service delivery in an appropriate
timescale. Operators should do this now,
while accommodating data growth is still
manageable and before traffic volumes
become overwhelming.
Operators must identify network limitations,
so they can begin anchor point installation
and roll out changes, first to less stressed
points, until the whole network is a single,
future-ready platform.
Lead with effective backhaul
Many operators have already responded to
the market trends, and are initiating backhaul
network developments. The UK’s BT Group
is deploying access platforms in the Ethernet-
based mobile backhaul service that gives
mobile operators access to its ‘21CN’ next-
generation network. Vodafone’s Backhaul
Evolution Programme is designed to reduce
network costs across its 16 operating
companies.
This Backhaul Evolution Programme is a
classic example of how an operator is tackling
the need for strategic change today. Vodafone
began its programme in Ireland, where it has a
high dependency on microwave. It is using the
platform to introduce statistical multiplexing
gains, collecting numerous small sites and
multiplexing them on a packet basis to obtain
backhaul efficiency. As the project evolves,
Vodafone plans to use the information it
delivers to drive the changes required in its
other operating companies.
If operators reduce these cost structures now
and make sure service delivery is accurate
and consistent, and is delivered using the
most economic available transport, they will
be well placed in an increasingly competitive
market. They can seize a key role in service
rollout, turning the challenge of bandwidth
demand into an exciting opportunity to meet
user expectations with proven network quality
and tightly managed transport costs.
Plan for tomorrow
The findings of the survey present mobile
operators with a clear route forward. They
must prepare their networks today for
the mobile data services and applications
users will demand tomorrow. The research
substantiates what operators have been hoping
for over the past few years - those who use
mobile communications will want to use
them more. Services will become even more
sophisticated and customers say they want
them sooner rather than later.
It is therefore clear that if operators are to
benefit from the growing appetite for mobile
data, they need to act now to ensure that their
networks are ready to deliver high quality
service and a positive experience for the end-
user. Only then will the potential of mobile
data be fulfilled - for operators and customers
alike. n
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Pragati Maidan Exhibition Centre
New Delhi, India

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Europe issue II 2009 n 43

 Digital advertising

Advanced advertising - from concept to product

by Tim Spencer, President, Sigma Systems

Advertisers are facing greater budget restraints than ever before. To get the best results for
their spending they are increasingly turning to the sort of advanced, targeted, advertising that
digital media makes possible. By combining demographic data and viewing habits, Subscriber
Information Services (SIS) construct individual, group and community profiles that are used
to target meaningful advertising to specific viewers on their mobile phones, TVs or PCs. The
Society of Cable Telecommunications Engineers’ SCTE 130 architecture standardizes this
process.

Tim Spencer is the co-founder President and COO of Sigma Systems, having served previously as Sigma’s CTO; he has over 20 years
experience in telecommunications software design and development. Prior to Sigma, Mr Spencer held various senior positions with Bell
Canada. He was Director of Software Engineering for advanced services at Bell Mobility, where he was responsible for the design and
development of real-time OSS solutions such as message processing, service activation and fulfilment, inventory and network management.
Mr Spencer also led several international OSS consulting projects for Bell Canada International in Central and Latin America.

Tim Spencer holds a Bachelor of Science degree in computer science and software design from DeVry University.

While there have never been greater
opportunities for advertisers to identify and
reach specific customer communities, there
has never been more competition or market
pressure facing those who provide advertising
channels. As the global economy staggers,
advertisers are under severe budget pressure
and need to demonstrate tangible returns on
their ad investments. Those returns are best
measured through vehicles that can target
specific customer segments and support
measurable interactions with them. This is
why advertisers are intrigued by the promise
of interactive TV advertising. It combines the
power of the TV medium with the Internet’s
interactivity, behavioural targeting, and
community-orientation. Delivering interactive
advertising as a viable, value-added product is
high on many TV providers’ priority lists, but
not everyone will make it work right on the
first go around.
The business case
Many print publications have lost massive
portions of their ad revenue to thousands of
online publications. Traditional broadcasters
have lost revenue and market share to an
ever-increasing number of specialized
programmers and cable channels. With
businesses looking to optimize their
marketing dollars, competition to sell ad
space has further intensified. The search to
find better ways to identify, engage with and
sell to customers continues to advance while
advertiser expectations increase.
Advertisers want to target, interact with,
and measure their success in reaching out
to specific customer segments. Part of the
reason print publications are struggling is
that they couple a high cost to advertise
with relatively poor means of customer
identification, interaction, and measurement.
Advertisers cannot justify major investments
in print advertising if they cannot demonstrate
tangible returns on those investments.
Similar forces are affecting major television
advertising outlets. What is a strong audience
share today was an embarrassment ten
years ago. Rarely does one see a television
commercial that does not attempt to push
interested prospects to a website where they
can be captured as qualified leads and be
exposed interactively to various content-based
promotions. Converting the passive viewer
into an active prospect is a major challenge
now because there is not a direct linkage
between the TV advertisement and the online,
or mobile, ad components.
This is where the business case for advanced
advertising becomes extremely relevant.
From the viewer’s perspective, advanced
advertising brings together the TV, mobile
phone and Internet experiences into one
seamless channel. Technically, it allows the
viewer to do anything from an impulse buy
to ‘deep-dive’ research on a product and
find detailed information and specifications,
professional and peer reviews, cross-
marketed and affiliate discounts, and trial
offers. The big challenge is to put this kind of
information and interactivity in place, make it
work seamlessly, and ensure that it is directed
to relevant audiences.
Targeting matters
TV network programmers seek ‘DVR proof’
in new programming. One of the reasons
live programmes, like major sporting events,
can command premium advertising rates is

44 n Europe issue II 2009


that they are immediate. A recorded match
just does not carry the same excitement,
anticipation and emotion as the live event.
Viewers are more likely to view such events
live rather than see them later on a DVR
(digital video recorder) that allows them to
fast-forward through the adverts. Advertisers
know that many viewers, especially when
using a DVR, ignore broadcast advertising.
Advertising that the viewer does not look at
is worthless, so finding ‘DVR proof’ content
is essential.
Advanced advertising capabilities are game-
changers for TV programmers and service
providers because of targeting. A major reason
viewers change the channel or hit fast forward
on their DVR during a commercial break is
that they are just not interested in whatever is
being advertised. Huge percentages of viewers
will turn away from a given advert because it
is only relevant to a small percentage of the
audience.
Advanced advertising changes the way ads are
delivered - via TV, web and mobile device. All
viewers do not receive the same ads. Instead,
they sees ads targeted to their interests based
on an analysis of their subscriber information,
the services they already use, the shows they
view and interact with and preferences they
can adjust. This helps ensures the delivery
of only relevant - potentially compelling -
advertising content to each viewer. It also
allows TV providers to sell each time slot to a
number of advertisers.
Well-defined ‘audience qualifiers’ will direct
content to the right audiences. Audience
qualifiers are advertising-relevant attributes
that apply to viewers and groups of viewers.
These qualifiers, and specific combinations of
them, mark subscriber profiles as belonging to
defined audience groups. Audience qualifiers
can be based on anything from traditional
demographic characteristics, like geography
and household income, to viewing or usage
habits. In layman’s terms, a viewer from
Toulouse, say, could be tagged as a middle-
income, rugby-loving, DVR user. Audience
qualifiers, and the subscriber profiles of which
they are part, also include the viewer’s device
and location.
The mechanism whereby audience qualifiers
and subscriber profiles are defined, stored,
managed, and made available to systems that
handle advertising delivery is now called
a Subscriber Information Service (SIS).
In North America, the Society of Cable
Telecommunications Engineers’ (SCTE)
130 architecture specification for advanced
advertising ensures a standardized and
extensible message-based interface for both
the cable and telecommunications worlds.
SCTE 130 specifically defines the SIS as the
component of the architecture that centralizes
and manages information about viewers and
audience groups. SCTE 130 also provides
tools to define granular audience qualifiers.
The SIS provides the audience qualifier
information to the systems that execute ad
insertion and delivery. The European market
is likely to adopt the SCTE 130, or a similar
standard, as well.
Interaction sells
Audience targeting will help counter the DVR
effect and, when coupled with interactivity,
will increase revenue opportunities
even further. Introducing interactivity to
advertisements makes targeted ads more
engaging and compelling by including
animation, games, live contests, polling, and
access to detailed information.
Interactive elements can be present in other
places beyond the traditional commercial time
slots on TV or standard banner ads online.
Interactive elements can be tied to product
placements or embedded in programming;
they can also be telescoping elements in a
window frame or translucent overlay that
the viewer can choose to interact with at any
time. These elements can appear as pre-roll
ads in advance of pay-per-view and VOD
(video on demand) movies, or on-demand
DVR and entertainment programme guide
menus. This allows TV providers to offer new
advertising products that can behave similarly
to online ads.
Picture a scenario where any time a viewer
presses fast-forward on the remote, a
telescoping ad appears. The same ad can be
served to viewers online or to their mobile
device. Outside of the constraints of in-
program time slots, ads are more difficult to
tune out or fast forward past, and they also
let viewers choose when they want to be
entertained, browse, shop, or learn. Coupled
with targeting and opt-in/opt-out controls,
it becomes possible to deliver a highly
personalized experienced. Interactivity makes
TV a more effective element in multi-channel
campaigns that aim to engage, capture,
qualify, and transact with customers at any
entry point. In other words, the advertiser
should no longer need to entice prospects
to visit a website just to engage them as
customers.
Making it work
Bringing advanced advertising to market will
involve significant challenges. For example,
advertisers and service providers ultimately
Mobile Digital
payment
Mobile
Regulatorysystems
access
advertising
affairs
need to agree upon common audience
qualifiers or common guidelines for defining
them. This will allow them to develop ads and
campaigns that target similarly defined viewer
communities regardless of on which service
provider’s network they appear.
Initially, audience qualifiers can be defined
based on demographics, a subscriber’s
existing services, and even pay-per-view
and on-demand transaction records used for
billing. Delivering more granular and adaptive
targeting over time will require an enhanced
infrastructure to collect and analyze viewer
usage and behaviour data. As patterns, trends,
group and community preferences emerge
from this information, new audience qualifiers
can be defined and attuned to them. This will
result in more accurate ratings and more
specific targeting of both viewer groups and
behavioural patterns. Behavioural analytics
are already commonplace in the Internet
realm and have become part of advertisers’
general expectations.
Any solution, however, that involves detailed
user data must respect the audience’s desire
for privacy and needs to be coupled with
both education and support for strict opt-
out/opt-in controls. The service provider
community needs to provide customers
with the opportunity to control the in-flow
of ads. Further, any SIS-like component’s
job is to abstract personal information from
audience information. Advertisers should be
able to select the groups defined by audience
qualifiers they wish to target without ever
having access to personal information.
Complex fulfilment processes represent
another key challenge. While most
interactive elements like on-screen buttons
and menus are embedded in the set-top box
infrastructure, the viewer’s actions can kick
off a variety of fulfilment processes - such as
financial transactions, hard goods shipments,
and content retrieval and delivery - that call
for third-party involvement. These processes
need to be automated and integrated into
other operations, such as billing, supply chain,
warehouse, credit and debit card processing,
credit checks, and any number of business-to-
business processes related to ad campaigns,
promotions, and trials.
Leading technology suppliers have been
working with organizations such as the TM
Forum and CableLabs to define the standards
and specifications necessary to automate these
processes. This work has resulted in the first
generation of production-ready solutions that
can deliver advanced advertising capabilities
today and provide a foundation for more
complex options in the near and long term. n
Europe issue II 2009 n 45
 Internet Privacy

Internet privacy?
by Andrei Korobeinik, CEO, Serenda Investments OU

The Internet, like any significant new technology, poses a number of serious challenges for
society.

In time, both the technology and ethics of privacy will evolve to meet the needs of our virtual
lives and of an online society. However, until society adjusts to the social implications of these
new technologies, and people get used to the exposure the Internet brings and integrate it into
their daily lives, the only privacy one has online is the privacy we, ourselves, preserve.

Andrei Korobeinik is the CEO of Serenda Investments. He has worked in Web development for the last decade, first as an entrepreneur,
then as the Technical Director of an Internet gambling enterprise.

Mr Korobeinik then launched his own project, the Rate.ee, social network, which became the most popular Estonian Internet site.
Mr Korobeinik is still the CEO of his own social networking company, operating in more than 20 different countries and has invested in
a number of Estonian Internet startups.

Andrei Korobeinik studied computer science at the University of Tartu, where, in addition to IT, he studied psychology and economics.

The Internet, as we know it, has been around
for some 15 years and it is developing at an
incredible speed. Many things have already
happened, but it is always exciting to imagine
what to expect next.
Half a year ago, at a conference on Internet
trends, on one of the slides of my presentation
about Internet privacy I forecasted that
airlines would start using social networks to
get more data on their customers’ tastes. They
could then use the data to give you advice
about hotels you will probably like, show
you movies you have not yet seen or even let
you know what interests you share with the
passengers sitting next to you, which might
be quite useful to know for a long trip.
What has happened during the last few
months? The largest travellers’ community
site, Tripadvisor.com, has launched a social
network where you can get advice from your
friends about the cities you are planning on
visiting or the hotels you are going to stay in.
At the end of January, I have received an
email from KLM airlines saying that they
are launching a new social network called
Bluenity.com. The goal of this network is,
“to discover other travellers and meet them at
any point”, not just on the plane. Good idea,
but to take part you have to surrender a bit of
your privacy.
Internet as a platform
The Internet is changing every day. New
sites appear and new concepts substitute the
old ones. Only three or four years ago, large
Internet sites were trying to defend their user
bases by any means; now, quite logically,
large ‘offline’ companies are doing the same
thing. However, today the situation is totally
different.
Large players feel that synergy is more
important than competition threats. New open
standards appear, allowing services to access
each other’s data. One day your favourite
Internet shop will allow you to discuss the
content of your shopping basket with your
LinkedIn friends, or your mobile operator
will enrich your smartphone contacts with
their pictures from Facebook. Open ID,
Open Social, Facebook API, Google Friends
Connect are just a few words from the Web
2.0 vocabulary that can take us to the future.
The vast majority, some 99 per cent, of data
in the Internet is currently unstructured, so it
is not always easy to use data from other sites.
The Web 3.0 - the semantic web - though, is
not far away; it will consist of data structured

46 n Europe issue II 2009


“TV is just a part of the whole picture. Rapid convergence is affecting the way our data is
processed. There are dating service systems that will allow you not only to choose your
dates from pictures, but also meet them instantly (look left, she is 15 meters away).”
so computers can ‘understand’ it. Tim
Berners-Lee, the creator of the World Wide
Web considers the semantic web to be the
“right Internet”. Indeed, the new Internet will
be much more efficient in using and sharing
data according to your needs.
Big companies and big social networks can
already mine data and discover things about
your life and habits you almost surely don’t
want just anyone to know. With the semantic
Web, the dangers multiply.
Let’s get back to KLM. Of course, my
scenario is not there yet, but will it take long
to integrate KLM’s service with some of the
global social networks? I don’t think so.
Internet everywhere
Just five years ago, the Internet was accessible
from one place - a desktop computer on a
table. Some WAP sites could be used from
your mobile phone and you even heard about
Internet television, but these things, due to
their inconvenience, were quite far from
being mainstream solutions. In spite of that,
the ‘three-screen’ concept descends from
that time. Telecoms and media companies
believed that the same content should be
accessible from everywhere all three screens -
the computer, the mobile phone and your TV
set.
This is what is happening today. Fewer people
really care about desktop computers - people
are buying laptops they can take everywhere.
The newer smartphones are becoming real
Internet devices - it is often easier to go
online than to find a socket to charge your
phone. The only thing which is not yet ready
in many parts of the world is IPTV, but it is
just a matter of time.
It is hard to say whether TV will go online
or the Internet will finally appear on the TV
screens. The Internet TV service Joost is
not very successful and other approaches
by MSN TV (formerly WebTV), Yahoo TV,
and so on. have yet to succeed. Still, TV is
becoming more and more interactive and
it seems that a tipping point will come in a
couple of years. The infrastructure is almost
there, and consumers’ habits are slowly but
inevitably changing; many people already
prefer to watch their favourite TV shows on
the Internet. These are great services, but
every time you use Web-based services a bit
more data about your life and tastes goes into
the service provider’s database.
However, TV is just a part of the whole
picture. Rapid convergence is affecting the
way our data is processed. There are dating
service systems that will allow you not only to
choose your dates from pictures, but also meet
them instantly (look left, she is 15 meters
away). These advances affect not only dating
services - the same sort of system can help
you find investors at a business conference or
a given service provider during a trade show.
It is not science fiction; such applications
already exist. Many people have smartphones
with GPS chips and Internet connectivity via
EDGE or 3G. In some cities, you can find the
closest restaurant and see what others think
about its service and food. Another service
lets you check pictures made nearby - really
nearby - for example, in 50 meter radius.
The progress is fast; too fast to understand
all the consequences it brings. When I walk
in London I can use an iPhone application
to check pictures of the sights to see; I can
also see nearby accommodations, including
pictures of the owners. Do they really want
me to see those pictures? I doubt it.
Quite often, the invasion of privacy issues
are hidden. The Internet messenger called
Google Talk had a privacy agreement saying
that all the content of conversations held by
the users belong to Google. It was changed
two weeks after the service’s launch when
someone checked the terms of agreement and
the Internet community started to discuss the
situation.
However, another Internet messenger, ICQ,
belonging to America Online, still has the
rights to all the ideas and inventions discussed
by its users. It is clear that AOL is just trying
to manage the risks of possible civil actions,
but still, do you think it is a good idea to
discuss your personal or business ideas or
affairs using the ICQ messenger? Like most
people, I do not always read the online service
agreements, however it is better to read the
terms before accepting them and giving
companies free reign to devise ever-more
creative ways to use your personal data.
Mobile Regulatory
payment
Mobilesystems
Internet access
Privacy
affairs
Dr Jekyll and Mr Hyde
Different writers describe gloomy anti-
utopias; most have to do with futures too
scary to contemplate and most predict the
death of privacy. True, the world’s outlook is
changing, long-accepted standards and morals
are swiftly disappearing. Is it true that the
layer of glamorous civilization is disappearing
as well? Is it true we face a scary future? If
we check what is happening on the Internet,
the answer is definitely yes.
The Internet is a kind of a brave new world for
newcomers, without many of the traditional
boundaries set by society. It is a world where
you can date people without knowing them;
you might even doubt their age or gender.
On the Internet one can send messages to a
prime minister and tell him that he is a dumb
communist spy or leave a note ‘on the wall’
saying that they have gone on vacation and
will be back in a couple of weeks.
However, when the virtual world meets the
real world the results are not always what
an overly trusting user might expect. That
fantastic, just perfect, computer matched date
might well be nothing like what you were
led to expect; an indiscrete bit of fiction - or
an unsavoury truth - posted on your site or
blog might lead to an unexpected visit by
the police. Finding, upon returning from
vacation, that your house has been robbed is a
powerful reminder that you have no idea who
is actually reading your blog. You might also
discover that your erotic pictures are available
not only to your Facebook friends, but to your
employer as well - and somehow he/she is not
convinced that those pictures are forged.
In time, both the technology and ethics of
privacy will evolve to meet the needs of our
virtual lives and of an online society. Until
society adjusts to these new technologies, and
people get used to the exposure the Internet
brings and integrates it into their daily lives,
it may be useful to remind people - especially
children - that the ethics and morals they
choose to live by must be followed carefully
everywhere, both online and offline. n
Europe issue II 2009 n 47
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48 n Europe issue II 2009

 I WANT TO TAKE
THE LAST FIVE MINUTES
OF THE GAME WITH ME
What does it take to be a Televisionary?
A deep understanding of what people want and need.
An ability and expertise in making television more
individual and more personal. As a global leader
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Europe issue II 2009 n 49

50 n Europe issue II 2009