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The Bloor Perspective: Pre-pay mobiles, Patch Penguin and Olympic sponsorship
In their latest look at hot issues, Robin Bloor and his colleagues consider the mobile profit problem, the next step for the Linux leaders and IBM's replacement as the Olympic Games sponsor.

By Bloor Research

Published: Monday 04 February 2002

Around five years ago, as the size of mobile phone handsets shrank and geographic coverage increased, the industry began to make significant inroads into business and the numbers of users rose rapidly.

Recently, the operators have acquired users by the truck load and in the more mature markets of Western Europe it is estimated that well over half of the population has access to at least one mobile.

However, the huge increase in user numbers has come at a high cost to the service providers and many are now under pressure to improve their profitability.

In the mobile world, the value of customers is measured by their ARPU, or average revenue per user. For the last couple of years the big mobile companies have sought to gain market share at almost any cost. The net effect of this expansion in numbers, the growing proportion of pre-paid customers, and the effect of competition has seen ARPU drop significantly for almost every supplier.

Indeed, over the last couple of days both Vodafone and Orange have reported numbers that indicate ARPU is still falling, although as with all statistics, the figures can be subjected to a number of slightly different interpretations.

However, it appears mobile providers are now concentrating on increasing the ARPU and this may mean limiting the number of pre-paid services on offer or attempting to make them more profitable. Until now, it has been difficult to offer sophisticated, profitable add on services to the pre-paid market because of the problems with managing billing.

However, the introduction of new tools, such as Prepaid mCharger from CMG, to handle billing in real time for pre-paid services may allow the mobile providers to increase the ARPU from non-contract customers.

It will be interesting to see if the mobile service providers take up the new capabilities that such real time billing systems can supply to the pre-paid market, especially in the provision of paid-for data services, or if they focus on converting pre-paid customers to long term contracts.

Tension at open source central
Over the years the Linux community has portrayed the collective that manages the evolution of Linux Kernel as a happy, friendly group.

However, a recent proposal to create a new "Patch Penguin" role has lead to some debate within the Linux community as to how the development of the operating system should be supervised.

Since its inception, Linux has evolved with remarkably few instances of discord, but there are now the first visible indications of tension in the Linux world. The discussions are focussed on a proposal by Rob Landley calling for the establishment of a role, the "Patch Penguin", to help integrate fixes for the numerous small problems to be found in the current Linux 2.5 kernel.

These problems are not regarded as significant and, indeed, are commonly found in nearly every complex software system. Landley believes the Patch Penguin could help ease the frustrations that some developers are feeling when they receive no feedback on the fixes that they submit.

Linus Torvalds argues that the current development structure operates well and believes that some developers are frustrated simply by the fact that he does not include every patch submitted into the kernel. He believes it is an issue of prioritisation. He is reported to have said: "You can do one of two things: accept everything, including the crud or be careful and spend time on the patches you apply."

However, the frustrations of developers whose patches are not incorporated are not based on the rejection of their work. It appears to be much more the lack of any feedback. Patch suggestions are not formally rejected, they just disappear into the open source ether.

Torvalds also notes that finding people to do the minor patches might be difficult too - because everyone wants to be involved in the big-hitter projects. So, it now looks as though the Linux world may be searching for a cross between a penguin and a stable hand.

There is no crisis in the Linux movement, but it is clear that if Linux is to continue to gain credibility in the business world it must be seen to be capable of supporting the increasing development pressures that comes with business.

Torvalds has succeeded thus far by harnessing the talent of the open source community. Maybe the time has come for the steering group to add a little unexciting grooming capability to its undoubted flair and vision.

Going for Gold
Coming soon to a screen near you - the Winter Olympic Games from Salt Lake City. The Olympic Games is usually an event that the IT industry associates with IBM. However, Big Blue long ago announced its decision to retire from the front line

But the games must go on, and an event of this size requires major IT support. Most of it revolves around the delivery of information to locations all over the World. It's all about getting information into the systems as fast and accurately as possible then transporting it to users, such as the press, to use when they need it.

All of this requires a massively scalable infrastructure with big servers and plenty of bandwidth to cope with enormous volumes of streaming media.

A quick haul around the Olympic Games websites offers up a few IT-related names. The main sponsor to look out for is SchlumbergerSema. These are the boys and girls responsible for all of the worldwide integration issues - basically making sure it all comes together.

Naturally, AT&T is in there too, providing some of the bandwidth required to get information through to customers. An interesting technology partner is Qwest with its content management and delivery skills. It is helping out with the extended wireless and communications issues that will help to co-ordinate the activities of officials, athletes and the media. This involves close ties with NBC Olympic - the special company created by NBC simply to transmit the Games to the World.

Avaya is in there too, helping NBC Olympic with internal communications and call routing. Additional communications equipment is coming from Lucent, 5,000 PCs will be supplied by Gateway and numerous Unix systems will find their way to the games from Sun.

So there you have it. The question is whether the suppliers will turn in a faultless performance between 8 and 24 February or whether they'll end up in a heap on the ice.