Current issue
Editorial:
Welcome to this second issue of Nordic and Baltic Journal of Information and Communication Technologies, nb!ict. nb!ict is an offspring of NordICT – a collaborative network of universities and private ICT companies in the Nordic and Baltic Sea region. The primary goals of nb!ict are twofold: to provide a platform for debate on ICT developments; and to present scientific work from or about the region.
In this second issue of the journal, focus is on new mobile and wireless applications and services. The reasons for taking up this theme revolve around the vast growth potentials in the area but, first and foremost, the important potential social and economic implications of the use of such new mobile and wireless applications and services.
The first section including the shorter and more journalistic pieces have three papers written by people from industry. The authors of these three papers are involved on a daily basis in developments relating to the topics they are concerned with in their papers. This means that information is up-to-date and that the topics discussed are based on the issues presently debated among people in the ICT industry. It can also imply that information may have a bias towards the interests of the companies of the authors. This is, however, a risk that this journal is prepared to take in the journalistic section in order to bring forward new and interesting developments in the ICT field.
The first paper in this section is on Greenland. It is written by Jørn Jespersen, CTO of Tele Greenland, and is entitled ‘Greenland in the centre of the world’, which is also the heading of the company vision of Tele Greenland. Tele Greenland is presently the only operator on Greenland. Its license to operate implies that the company must offer a full range of services covering settlements down to 70 inhabitants at homogeneous prices. Knowing the Greenlandic geography, this is a major challenge.
The aim of the paper is to describe the technologies used in the long haul for reaching all users and how technologies develop with the increasing capacity and service demands on the network. The basic backbone infrastructure is based on satellite and microwave technology. The technological solutions in these areas are being upgraded; however, in order to be able meet the demands for capacity for data services in the longer perspective, Tele Greenland is working on a project called Greenland Connect, which is a submarine cable project connecting Greenland to Europe and North America. This is a major enterprise for Tele Greenland and is the core topic of the paper. In addition, the paper also touches upon aspects of the policy and regulatory changes in the telecoms area, which are in the horizon on Greenland, including the possibility for differentiating the service offers in, e.g., the capital Nuuk and smaller settlements.
The following paper is written by Jaakko Saijonmaa and Tiina Saaristo from EADS Secure Networks, Finland. The title of the paper is ‘TETRA developments in the Nordic and Baltic countries’. TETRA is the acronym for Terrestrial Trunked Radio and is the digital radio communication technology for public safety and private utility and transport organisations, which is becoming the most prevalent in the Nordic and Baltic countries and elsewhere in Europe. The development of TETRA started app. 20 years ago, following the same trend of digitalisation, which also resulted in the GSM technology. However, TETRA has developed relatively slower than the GSM track technologically as well as with respect to the take-up of the technology. The explanations are to a large extent organisational and relate to the mission critical character of the communications in question.
The paper describes the TETRA technology, its functionalities and developments including its adoption of IP-based data communications. While the traditional public safety networks have been citywide or regional, allowing only for a limited number of users, TETRA technology allows for nationwide communications encompassing far more users. The next step is cross-border and international communications via TETRA – an issue which is important in the Nordic and Baltic region with relatively small countries and an increasing need for cross-border public safety communications. This is the primary topic and aim of the paper. The paper shows that there is still a long way to go for TETRA-based cross-border communications. However, such developments are on their way technologically as well as organisationally.
The third shorter paper is on ‘WiMAX vs. LTE – the role of the financial crisis’ and is authored by Karsten Vandrup, who is managing director of Litepoint Europe. The issue dealt with in the paper is the battle between WiMAX and LTE. The situation is that WiMAX has come further in the standardisation processes than LTE and WIMAX is already being deployed, while LTE is still in the labs. However, with the advent of the financial crisis and its many repercussions in other business sectors, the question arises whether the likely halt on investments, which follows the financial crisis, will open the game and provide better opportunities for LTE.
The paper first briefly elaborates on the two technological solutions and their respective advantages. The conclusion is that it will hardly be the technological performance of one or the other system, which will determine the game. The two technologies are at an equal level with respect to performance. It may, however, turn out – as LTE is propagated by the 3GPP consortium, which is working on the basis of the WCDMA technology – that LTE can be seen as a natural advancement of WCDMA and, therefore, may be favoured by operators with WCDMA networks. Nevertheless, the battle between the two standards is not determined. This is clearly illustrated by the fact that Nokia is betting on two ‘horses’ – as the paper says. Being strong in WCDMA, Nokia will be expected to support LTE. However lately, Nokia has marketed a WiMAX terminal.
The second section is devoted to papers of a more traditional academic character. There are three papers written by scholars from Norway, Sweden and Finland on developments in their respective countries.
The first among the three academic papers is a contribution by Leif B. Methlie and Per E. Pedersen, entitled ‘Business model performance: Reflections from three studies of mobile data services’. For some years, Methlie and Pedersen have been conducting analyses on the basis of the Structure-Conduct-Performance paradigm. The idea is that if one aims at making analyses of the market performance of, for instance, new technological offers or the business models used for the introduction of such services in the market, one has to include an examination of the structural conditions for their deployment, the business models that these conditions facilitate, and an analysis of how these business models influence the actual performance in the market. There are thus three steps to take: an analysis of the structural conditions including market and regulatory conditions, an analysis of the business models implemented, and an analysis of the market performance - which often results in analyses of the profitability of companies, but in the work of Methlie and Pedersen focuses on customer value.
This type of analysis, encompassing as well the structural conditions, the business models implemented (the conduct of companies), and the market performance, makes it possible to avoid the business model analyses often seen, where purely descriptive models result in proposed normative implications. When involving the whole chain of causality and basing it on empirical analyses, the foundation for the recommendations to companies regarding business models to apply becomes stronger. This is an analytical view that Methlie and Pedersen have been developing for a number of years and which has already been well published in scientific journals. In the present paper, they put together empirical analyses from all three steps in an integrated analysis, specifically with regard to mobile data services in the Norwegian market.
In all three steps there are concrete findings presented in the paper, and these findings are drawn together in an integrated analysis, where the major conclusions are that in order to succeed with new mobile data services, which substitute for existing services, attention should be paid to the mobile specificity of the services. Furthermore, the concrete analyses show that there is a lack of significant paths from business model dimensions through mediating variables to perceived customer value, where these mediating variables are categorised in terms of intrinsic and extrinsic value to the customers. Intrinsic values play a bigger role for end users than the extrinsic values with respect to the services analysed in the paper.
The second of the academic contributions is a paper by Oscar Westlund on ‘Diffusion of Internet for mobile devices in Sweden’. In addition to the diffusion aspect, it is also a presentation of empirical evidence regarding adoption criteria for mobile Internet in Sweden. The aim of the paper is to present the results of surveys conducted in Sweden concerning the diffusion and adoption of mobile Internet. It is thus primarily an empirical study, but the paper also includes a presentation of the basic elements in the theories on diffusion and adoption.
The diffusion part of the paper presents the results regarding mobile Internet of a survey, which is conducted each year in Sweden on media consumption in general. Results for 2006 and 2007 are presented. The adoption part is based on a Mobile Barometer (for 2007), which the author of the paper has been involved in developing. Whereas more simple diffusion analyses focus on the mere penetration (e.g. ownership) of devices, the Swedish survey on media consumption allows for an examination of the use of the service capabilities of the devices.
The evidence coming out of the media consumption survey is that even though the majority of mobile devices in the market are Internet-enabled, only a minority of device owners actually use their devices for Internet access. Among the users, younger and economically better off men are over-represented, while elderly, economically less well off, and women are under-represented. This result is not a surprise, as it confirms general patterns of technology diffusion. It, however, emphasises that the general perception in Sweden, as well as in most other European countries, is that there is a technology barrier to cross with respect to mobile Internet – a barrier which younger men often are keener to seek to cross – while the paper indicates that in Japan younger women are the biggest users of e-mail via mobile devices. There can be many explanations for this fact; however, it may be an indication that the business actors in the mobile area have been better in Japan than in Europe to launch mobile Internet as a service package rather than as a technology challenge.
Another often discussed difference between Europe and Japan in this field is that fixed Internet access has been more important for Europeans as compared to mobile Internet when comparing with the Japanese. The implications of this are approached in the paper by raising the question whether fixed Internet access is a barrier to mobile Internet access in Europe. The question is not finally answered in the paper, but the adoption survey illustrates that ‘people value the mobile device as inferior in relation to the computer in terms of transfer speed and overview functions’ - as stated by the author. The overall framework in which the paper by Westlund is thus inscribed is the issue of why it is that mobile Internet seems to develop only slowly in European countries compared to Japan and South Korea when taking the advanced infrastructure in a number of European countries into consideration. Sweden is a case in point: ‘Sweden is an interesting case study because the ICT and mobile telecom sectors are well developed’, says Westlund.
The third academic contribution is a paper on ‘Operator roles in mobile broadcast’ by Eino Kivisaari, Tuukka Autio, Timo Smura and Heikki Hämmäinen from Finland. The purpose of the paper is to assess the viability of different mobile broadcast value networks. The case is Finland, but it is also discussed whether the conclusions for Finland have a viability for other countries as well. The fact that Finland has chosen a DVB-H solution means that it is a paper on value networks for DVB-H based mobile broadcast networks.
The methodology of the paper is first to construct different value network scenarios in the Finnish situation on the basis of the most important business roles that go into the delivery of mobile broadcast. Subsequently, a techno-economic analysis is performed resulting in estimations of the net present values for the different scenarios and, on that basis, an assessment of the feasibility of the selected value network configurations in the Finnish market is made. It is thus a simulation based analysis with the advantages and disadvantages, which relate to such analyses in terms of consistency and lack of flexibility. The simulation is based on extensive literature studies and interviews with a selection of representatives of key players in the Finnish market in addition to the large experience of the authors regarding the Finnish network market, and it operates with relevant scenarios and input for the modelling and simulation of different mobile broadcast value networks.
Some of the overall conclusions drawn on the basis of the simulation analysis are that DVB-H, no matter which value network configuration is chosen, seems not to be a ‘gold mine’ – as the authors state it. This applies to Finland at least, which is a large country geographically with a small and sparse population. However, it can also be concluded that possibilities for viable business models do exist, but that potentially conflicting interests of mobile operators and broadcasters may be barriers to a swift development of mobile broadcast in Finland. The paper thus confirms the point of view that the lack of swift diffusion of mobile broadcast is not primarily a technical issue but primarily a business question.
Furthermore, the paper acknowledges that even though a generic model is used in the paper, the conclusions may not entirely fit the situations in other countries, partly because of the geographic and demographic differences, but also because the value networks implemented in the different countries are not the same. The Finnish model is a very open one where the necessary roles/assignments are distributed. In some other countries, more integrated models are implemented. The paper, therefore, ends with future work directions encompassing the question of comparing the viability of open and integrated business models for mobile broadcast.
In the section with academic contributions we thus first have a paper on how structural conditions affect business model options and, further, how business models impact on market performance. We, thereafter, have a paper on diffusion and adoption, and as the third contribution we have a paper on the viability of mobile broadcast value networks. The common theme for all three papers is how new mobile and wireless services are doing in the market. The background is that new mobile and wireless services have not been taken up as fast as was anticipated around the turn of the century. In East Asia, however, the development has been faster, first and foremost in Japan and South Korea.
The slower than expected development of new mobile and wireless services is a recurring theme in European analyses in the area. This has led to a growing attention to diffusion and adoption theory, to business modelling, and also to the regulatory environment for the development of these services. This also applies to the Nordic and Baltic countries although developments in the Nordic countries often are considered to be at an advanced stage.
Anders Henten
Editor