Presentation on M2M and market failure at Internet of Things-week

Last week I was invited to the European Commission's expert group on the Internet of Things to speak on OECD work. It was in Venice during Internet of Things-week, which sounds great until you realize it was 35 degrees Celsisus outside and 40 degrees inside. The European Commission currently is doing a consultation on the Internet of Things, so if you have opinions, voice them! Unsurprisingly maybe, I put the focus on market failure that currently impedes the growth of the Internet of Things.

Update: Here are some links to where I got the data:
- http://stakeholders.ofcom.org.uk/binaries/research/telecoms-research/not-spots/PA_Consulting_main_report.pdf on coverage
- https://ripe64.ripe.net/presentations/172-Mobile_Broadband_Measurements.pdf that 20% of locations are unavailable more than 10 mins/day

New presentation on Machine to Machine communication

I recently gave a presentation on Machine to Machine Communication to the Dutch Telecommunication User Group, BTG. This was based on work I have done at Logica. The presentation represent my own thoughts and not those of my employer. I am still working on the topic and am interested in hearing anyones views on the topic.

M2 m implications for btg

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Celebrating Bill St. Arnaud and his wireless vision

James Enck used to call the readers of his blog "Eurotelcoblog", super mega über valued readers or something of the like, when they provided him with interesting tidbits and insight. In Bill St. Arnaud's case the list of superlatives that I would need to give him in thanks to his efforts would be a bit too long and not do him justice. Ever since I published about how opening up the market for MVNO's to end-users, Bill has been a major supporter of the idea, often blogging about it. Today he wrote such a great post on what universities and research networks could do with the idea, that I have to give him his own article, anything else would just be too little.

If you want to know where the future of innovation in networks is, then read Bill's blog of today. It's very enlightening, about how networks could be build that seamlessly integrate traditional mobile and wifi networks can be integrated into one large network, that could support many innovations.

Without readers and supporters, this blog wouldn't be anywhere so that's why I'm celebrating Bill today!

The truth about 3 digit Mobile Network Codes (MNCs) E.212

Despite the title, I don't know the full truth about Mobile Network Codes and whether they can be 2 digit or 3 digits long. However, I'm getting an ever bigger suspicion no one really does. So after talking to experts from various telco's and standardisation organisations for more than a year and just before I head into a new world, I thought I write down everything I've learned about Mobile Network Codes as defined in ITU recommendation E.212. This is not all there is to know and I hope others will chime in. There is so much misinformation and Fear, Uncertainty and Doubt, that it is hurting the development of the industry as a whole. I do have the sincere feeling, I'm the first person in a decade to fundamentally look at these numbers and the impact they have on the telecommunications market. I haven't seen any studies by any other researcher looking at these numbers at all. (Please prove me wrong, I would so love to see some other nutcase who looks at this stuff in-depth, preferably one who is way better than me and teaches me something new).

You're a policy maker and you need to know what to do

Before dismissing the potentially billions of euros of unrealized potential in the market and not changing a damn thing to the way MNC's are assigned, please ask a very very good and honest researcher to look into this. As far as I know there is no reason to be against this plan. But I am one person. I'm often right, but I may not be. After a year of searching though nobody I met who has serious mobile network knowledge has said I'm seriously bonkers and it cannot be done. Here is what I know. Don't be afraid to be critical. Do know, no one is paying me for this position. 

A Mobile Network Code is digits 4 to 6 of a 15 digit IMSI. 
As you may know, your SIM-card carries a unique number, the 15 digit IMSI number. (there are more unique numbers for an IMSI, but this is the important one). This number is used in the network to identify the mobile subscriber. Based on the IMSI the network knows whether the SIM should be allowed access, the type of access it should be granted and where to route the bits too.

The pre-paid SIM-card from the Dutch supermarket MVNO Albert Heijn I bought yesterday as a temporary replacement has IMSI: 204122030140166. Decoding it leads to the following knowledge:

• 204 is the Mobile Country Code of the Netherlands. Why it is necessary for mobile networks to know countries, I don't know. But it is in the spec. There are some operators like Digicel, who use one MCC 338  for their whole network in many different countries, deeming it too hard to work with an MCC for every Caribean Island and technically speaking they are right. Vodafone could easily use on MCC for all nations it operates in. Nothing breaks if you use an Italian MCC in Vatican city. Though it somehow is against best practices and the ITU doesn't like you doing it and wants operators and regulators to report extra territorial use of MCC's and MNC's
• 12 is the Mobile Network Code of Telfort. This used to be an indepent MNO with its own mobile network. It was bought by KPN, who switched of Telforts network and now Telfort is an MVNO on KPN's network. MNC's are issued by national regulators. In Vatican City this may well be Radio Vatican or the pope himself. The combination of MCC and MNC uniquely identifies the network. The E.212 spec says that the number can be 2 or 3 digits long. In Europe it is two digits long. In the rest of the world Wikipedia seems to show 3 digits are used as well. For instance Honduras, Columbia and the United States. 
• 2030140166 is the Mobile Subscriber Identitification Number: In this case it is 10 digits long, per the standard it could also be 9 digits long. That gives every mobile operator at least a billion and up to 10 billion numbers. Though it could be issued completely at random, it does seem there is further logic in the number. For instance I heard that the first x digits are sometimes used to point at a specific Home Location Register, which keeps track of where SIM-cards are in the network. It seems HLR's can only accomodate x million devices per HLR. If you expect more than x million devices, using the first digits allows for easy internal routing of traffic.  Furthermore specific MVNO's, like my supermarket MVNO may get their own range, so maybe 2030 is unique to Albert Heijn. Again, if they grow, it becomes easier to shift them to different or dedicated HLR

Wrote an article for Gigaom on Apple and SIMs

Gigaom just published an article by me called: "How to bypass carriers Apple style", on what Apple could do with the SIM-idea I developed for M2M. Apple is only in there because of the marketing value, Samsung, Sony, Philips, LG, Asus, all of them could be doing this. It works best for laptops and other data devices. These devices often don't have data roaming enabled, even if you use a dongle.

Have fun reading it!

GIGAOM Readers: please have a look at some of the other articles I wrote on the topic:

• A very simple presentation to introduce the idea given at the Telco2 conference (click or scroll down)
• A more in depth management summary of the idea, focussed on embedded M2M
• There is also a 55 page document for the government of the Netherlands (in Dutch)

Other things I wrote:

• The common errors of Telecom CEOs
• a primer on peering and transit
• Telecom Cool Wall
•  Why all telecom marketing and product management is wrong

The GSMA changes opinion on programmable SIM-cards

In a surprise move, the GSMA today announced that it will standardize a new form of embedded SIM. This will allow remote activation and updates.  The spec will be ready in January 2011. No word yet on whether or not the IMSI will be changeable after initial activation. This is however a complete reversal from the GSMA's position from the past:

Appendix A of 3GPP TR 33.812 V9.2.0 lists the opinion of the GSMA as
[…]Furthermore, one of the major concerns of MNOs is the potential weakening of the well-established and trusted SIM-based GSM/3G security architecture. Extended OTA (any kind and via any bearer of over the air data download to the USIM) capability to facilitate download of new subscriber keys and possibly authentication algorithms represents such a potential weakening of security.[...] not allowing MNOs to fulfil their obligations towards regulatory and other governmental authorities to guarantee secure authentication and billing.


[…]The only proposal in the TR that was acceptable to GSMA SG representatives was the Alternative 2 where operator change was performed by physical replacement of the UICC in the device.[…]


This would allow the likes of Apple to release mobile phones without removable SIM-cards. The biggest question is of course, why the GSMA changed its position and how much control they are willing to relinquish to the end-user, be they Apple or a smart metering company.

Though this will alleviate the problems I identified in my work on Machine to Machine communication, it's only 1 out of the 4 problems that I identified that now could be fixed (seeing is believing). Customers may be able to switch operators in the future, but roaming, national roaming and innovation, will probably still be limited.

Your customer wants to be mvno v2

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My presentation on M2M at Telco2.0 and my impression of the conference

Tuesday and Wednesday I was at the Telco 2.0 conference in London organised by STL. I was an invited speaker on the M2M track on Wednesday morning. Like many of you, I know the Telco 2.0 blog and knew of the conferences. Good friends in this community, like James Enck were on stage there before me. Other friends in this community stood at the basis of the Telco 2.0 ideas. So I was quite happy to be invited to the event.

Telco 2.0 on M2M
My presentation was part of the dedicated M2M track. Not all the attendants were there, but only those interested in M2M. The crowd was treated with a series of presentation from carriers and various forms of system integrators and suppliers.


What I found interesting in the telco presentations was, what they were and weren't about. What they weren't about is what their customers were doing and the problems that these customers were facing. What they were about is, potential use cases, the organisation of the telco's M2M unit and how it was embedded in the organisation and the design of the M2M platform. The whole reasoning was supply driven. Build it and they will have to come. As someone had warned a while ago, most telco diagrams of a problem start with their network in the upper left part of the page and the customer in the lower right part of the page. This is true. It also shows where their focus is; themselves, not their customer.

The difference between the telco's wasn't too great. Orange seems to go for a more fully integrated solution, where they will deliver the network, the platform and all sorts of other devices. Telenor has a dedicated group for M2M networking solutions, called Connexion and another group Objects that focus on service enablement, regardless of the network. So Connexion can sell to the whole market without involving Objects and vice versa.

Most of the presentations were at least of a decent quality and sometimes quite better. It deserves metntioning, because often this is different. However, the feeling these presentations give me in retrospect, is that of enormous budgets and very little idea of what the customer is looking for. This idea came from a remark by a quite brilliant and quiet Eastern European financial controller of a mobile telco, who remarked privately that his company just didn't have the size and the budgets necessary for such a platform, certainly given the 5 euro max revenue/month per SIM. This remark is so incredibly true. The large behemoths of European Telecoms are still swimming in the free cash flow. Free cash flow that is supposed to do something and might as well be spend on M2M. Running after every hype in the business, including M2M is not so much a necessity as it is a luxury.

The interactive format of Telco2.0 also means there was quite some feedback from the room, through instant polls. What it showed was that the audience was effectively split over the idea whether mobile telcos have a larger role to play  in the M2M ecosystem.

My presentation on how M2M customers becoming MVNO's
 I gave a presentation called "Your M2M customer wants to be MVNO". In generally the audience quite liked it. They thought it was thought provoking. I do think it was the most referenced presentation during the day. Both the facilitator and the speakers quite often referred to Rudolf or Logica. This was of course nice for my ego. I really focussed on the 4 central business problems and why becoming an MVNO was a solution.


What was also quite clear is that the industry really doesn't want to hear what I had to tell. The idea that a large scale M2M user is going to become a wholesale customer of the telco is just not done. There were some interesting comments why not:

Your customer wants to be mvno v2

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How regulator's and Telco's are holding up the Internet of Things

Well, I got quite a few reactions on my work on Machine to Machine communications. Some of it was critical and deserves a reaction. Many people however are also very positive. Bill St. Arnaud has referred to me multiple times now on his blog. Telco2 has invited me to speak in London on November 9-10. The Apple and Gemalto rumor stimulated me quite a bit more to finish the piece below. BTW I think Steve should talk to me.


I'll go through the criticism point by point. It starts of with that M2M is overrated and who really wants this. The next section is, that I misunderstood technology or misidentified solutions. Then a short intermezzo to explain that even if technology was a solution, it wouldn't solve all and then I lay all the blame on regulators. To get some background, flip through the presentation

Management Summary of Onderzoek Flexibel Gebruik van MNC's

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BTW the spicy title is because it seems I get better response to spicy titles than to none spicy titles. Fear sells and I happen to know some regulators read this blog, so this may give them reason to forward the blog.

Where do we use M2M?

There are many ways of doing machine to machine communication. Much of it is already done in Scada systems and generally uses wired networks. One of these may be analysis systems for hundreds of thousands of sensors in chemical plants. All of this is wired communication. However unlike chemical plants most systems don't sit nicely in one place, they either move or are too distributed.

I'll be speaking at Telco 2.0 on M2M, London, Nov. 9-10

I've been invited to speak at the Telco 2.0 EMEA event in London, Nov 9-10. My topic will be M2M and so I'll be part of the M2M session on the second day. Unfortunately this does mean I won't be speaking at the FTTH Forum in Budapest, which is on the same day, but that one comes recommended too. My attendance of the one and not the other is related to my employers interests.

I'll be speaking along the lines of the research I did for the Dutch government into M2M and the impact on telco business models. 

For those of you in London, I'm free to meet up on the 8th and possibly on the 11th. Drop me an e-mail or a phone call if you would like to. 

If TomTom were a country, its mobile penetration would rank between Gambia and Gabon (137th)

In the report I wrote for the Dutch government on M2M (or embedded wireless, or internet of things), quantifying the size of the market for M2M was one of the important issues. Today TomTom published some of its ambitions with real time traffic information and its HD traffic product in a Manifesto. As part of this they give a number of the amount of devices that are GPRS/UMTS enabled: 1.38 million!

If TomTom were a country, it would rank between Gambon and Gabon in terms of active mobile devices or 137th. Its goal is even more ambitious and that is to bring 20 to 25 million devices on the road, which puts it in the range of  The Netherlands, Australia and Taiwan, somewhere around 35th to 40th in the world rankings. Yes people, that would mean that TomTom would have more devices in the field than many European mobile companies.

M2M is going to be really big and it will change the relationships between telco's and M2M end users.

Logica report on switching costs for M2M (by me)

This last year I've worked on one of the most interesting subjects I've ever come across: Switching costs for Machine to Machine users (or embedded wireless as the GSMA calls it). The result is a report for the Dutch Ministry of Economic Affairs. It's about how a simple rule change in who can apply for numbers (E.212 and telephone) could open up a market for M2M communications. It would more or less remove the difference between public and private networks and result in a more flexible market, like we now already see for internet connectivity.

 Though I independently came to a solution, I can't claim I've thought of this solution first. That honor goes to at least 2 of my Logica colleagues in the Nordics and the UK or maybe to someone at Stratix consulting, but more likely someone somewhere, elsewhere. I do think I can now claim to have written the first full research in a public document on the subject. It's called "Onderzoek flexibel gebruik MNC's"(downloadable pdf, in Dutch). (and yes please put the links that prove this wrong in the comments, someone must have done this before, but I couldn't find it) :-)

Management Summary of Onderzoek Flexibel Gebruik van MNC's

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Will be in Paris and Brussels next week (discussing M2M, switching and roaming)

I seem to have 250 followers for this blog. Some of you may be in Brussels and Paris, so if you want to let's meet up.

I am in Paris on Monday and Tuesday. Pretty packed with meetings, but there may be some time for a meeting on Monday morning and Tuesday afternoon. (and yes, I'm presenting on Monday afternoon, right when the Netherlands is playing, so I might have to wear an orange tie to express my support for the team)

I am going to present some work I have been doing on Machine to Machine and especially the problems related to switching of providers for large scale M2M deployments. Switching 100k SIM-cards is no fun. Also there is a serious problem with roaming and M2M that is related to the switching problem. Try getting a good deal on roaming for large scale M2M. It is nigh impossible. The trouble is that everything has to go through your home operator and for them it is not always in their interest to offer you a good deal and it is impossible for you to steer all your traffic to the one network that gives you a good deal and not to the other expensive ones. The solutions seems to be becoming your own MVNO, with your own SIM-cards and Mobile Network Code. Very exciting stuff and I will publish more about it in the future.

On Wednesday I will be in Brussels, so that I can attend a session on the Future of the Internet of the Oxford Internet Institute on Thursday. My calender is pretty empty, so if anyone wants to meet, please mail me.