Valued Lessons wrote :

A lot has been written lately about Google Maps Navigation. Google is basically giving away an incredible mapping application with good mapping data for free. Why would they do such a thing? Most of the guesses I’ve seen basically say “they like to give stuff away for free to push more advertisements”. That’s close, but everyone seems to have missed a huge detail, perhaps the most important detail of all.

Google is an advertisement company, particularly skilled at targeted advertisements. Almost all of their revenue comes from being able to show you ads that you want to see when you want to see them. What does this have to do with maps and navigation? Well, this is going to seem really obvious once you read it, but no one seems to have mentioned it yet, so here it goes:

Google will know everywhere you drive, and when.

Valued Lessons goes on to detail ways Google could use that data to refine the targeted advertisement that represents the lion’s share of Google’s revenue. But there is another reason for pushing Google Navigation…

Now that they have found the way to gather start harvesting the data at a really massive scale they are able to go head to head with all the navigation software editors that have provide traffic information. Here is a nice business model :

• Get the free version of Google Navigation deployed to as many terminals as possible.
• Harvest traffic data.
• Sell traffic data as a premium service. Or just give it away and kill everyone else…

Mobile network operators I know are going to hate this. They make partnerships with the likes of TomTom, only to be entirely bypassed by Google ! I love it.

Let’s take a look at what TomTom wanted to do :

TomTom will use two main sources of information, occasionally complemented by others.

First, travel times deduced from the movement patterns of mobile phones. TomTom has made an agreement with Vodafone NL, allowing us to use (anonymously) the country’s 4 million Vodafone customers as a potential source of information and developed the technology to transform this monitoring information from the mobile network into reliable travel time information.

Secondly, historical FCD (Floating Car Data) from our own customers. Every TomTom navigation system is equipped with a GPS sensor, from which one can determine the exact location of a car.

Yes, Google can do all that too.

The process of obtaining data TomTom has developed results in highly detailed traffic information. In the Netherlands, for example, it means up-to-date travel times per road segment for approximately 20,000 km of road (see figure) and historical information per road segment for all major roads in the country, approximately 120,000 km.

TomTom has developed the technology in-house to calculate travel times across the entire road network, by processing the monitoring data from the mobile telephone network through TomTom’s Mobility Framework software.

And that’s information from before 2007… Imagine what can be done today !

Letting Google know where you go and letting Google mine that data is the reason for Google Latitude too… Latitude does not have the same mainstream appeal as a turn by turn navigation application, but with so many Google Maps customers now using it inside their car we are now talking Google scale !

Let’s go out on  a limb and make a prediction. In five years, in dense urban areas, you will get your ADSL at cost, provided you subscribe to your telecommunications operator’s mobile offering.

Three major trends are at play :

• Cells are getting smaller
• Radio throughput is increasing
• ADSL throughput is not going anywhere

Once cell throughput approaches ADSL throughput, the value of ADSL drops to zero. Why bother with ADSL when you have unlimited traffic at decent speeds with no geographical limitations ? In Paris, I seldom bother to even switch on my Android G2’s Wi-Fi networking – now it is all UMTS, all the time.

Why not ADSL for free ? As I can even get full motion video on demand on my mobile communicator, the availability of video services on the ADSL remains an incentive only if I’m interested in high definition. But to some people, high definition is important so ADSL retains some perceived value. In addition, giving away free ADSL access bundled with a mobile subscription would be gross abuse of a dominant position by operators protected behind the barrier to entry that their license affords them – so the worse they can do is selling ADSL at cost. But it is nevertheless tempting to squeeze out the perceived value of ADSL from the consumer’s point of view in order to cut the fixed access pure player’s oxygen supply. Isn’t life so much more comfortable among oligopolistic old pals ? Marginalization of ADSL pure players will be even worse if they are not playing along in the fiber optics arms race.

So the incentives combine :

• Users want the convenience of permanent unlimited cell access
• Operators are happy to squeeze out ADSL pure players

As a result, cell traffic increases and leads us to the next step of this self-reinforcing process : femtocells. Spectral efficiency nearing the Shannon limit, antenna diversity, spectral multiplexing and other 3G MIMO techniques can combine to provide the peak throughput that all the shiny marketing pie in the sky presentations promise. But in operations in the field those speeds are not achieved unless you camp under the antenna. For example, LTE 2×2 MIMO is advertised at a peak throughput of 173 Mb/s but actual rates are somewhere between 4 and 24 Mb/s in 2×20 MHz. They drop sharply as distance increases and it gets worse as the cell gets crowded. So there will be strong user demand for small cells – demand theoretically exists until there is one cell per user.

Approximately 60% of mobile usage already takes place indoors, yet providing in-building coverage is a technical problem at the gigahertz frequencies used for Wimax and LTE. This is only set to get worse as the mobile continues to replace the home phone. Research indicates that, as “all you can eat” data packages become commonplace, this number is likely to reach 75% by 2011.

Doug Puley – “The macrocell is dead, long live the network”, 2008

With the user spending more than 60% of his time indoors, there will be a fixed line access nearby. Extension of the access network on top of ADSL and FTTH links is already underway to increase capacity and compress costs by getting the data off the mobile network as close to the user as possible. Femtocells work well on ADSL too. So ADSL will remain useful as a way for mobile operator to shed load from the rest of the access network. And on top of that, ADSL lets the operator reach subscribers in areas not covered by the radio network.

So to mobile operators who offer fixed line access, ADSL could soon be considered as a mere adjunct to their core offering : mobile access. That could add yet more pressure on the game of musical chairs of mobile access frequencies license allocation. Why not attempt to exclude the competition that does not own a mobile network ? That leads us to ADSL access at cost – or slightly below that if the operator is willing to be naughty and deal with the market regulator. It will happen sooner than you think.

By the way, for a wealth of data about 3GPP evolution from UMTS-HSPA to LTE & 4G, you can take a look at this  September 2009 report by Rysavy Research. It provides about all you need to know about it and it is nearly as good as what I get internally from SFR.

Some people notice I am quite dogmatic about open networks. And they are right : to me, open is everything and the rest is details. But even my zeal has its limits : I don’t gratuitously shove tools in the face of people who can’t use them in practical conditions. I have been advocating jabber among my technically minded friends since 2001 and running my own server since 2003, but it took Google joining the XMPP network in 2006 to actually make it a viable option for pushing open instant messaging to the masses of people I don’t want to support myself. Before that I could understand the necessity for joining proprietary networks and run multiprotocol clients to reach people I could not decently drag to Jabber or IRC. But now I can tell them that getting presence information and instant messenging from me is just a Google account away – and since it is a mainstream service offered by an established and well known service provider they can hardly anymore label me a techno-excentric for using it. So – no I will not join your proprietary instant messaging network.

Today we have the same situation with social networking. And while the technological prerequisites for open microblogging have been almost there for a while, they have not yet cristalized into something that can be fed to the masses. That day will come – and we are all pushing toward it. Until then, I have a Facebook profile. But soon I know that I’ll be able to tell the world that my social networking tool is my blog, or whatever other tools I fancy moving to and from thanks to data portability efforts. And it’ll be easy for others to do the same because interoperable services will blossom at the hands of mass-market providers – maybe even Facebook if they ever reach enlightenment. And when that is about to be ready for massive adoption, you know where I’ll be – and you know where I’ll not be anymore !

To me there is an element of religion in those choices. But the techno-apathetic average user can make the same choices out of pure self-interest. If there are a number of comparable offerings on the market, one of which lets the buyer choose between different suppliers and move between them at will, you can bet that the one-time cost of moving away from the proprietary offering will be more than offset by the future value of the open solution. If we look at the history of technologies, examples of such migrations are plenty. Let’s just take e-mail for example : what is the current weight of closed mail systems ? They still exist, but they are insignificant niches and many of them use e-mail for notification…

Urban transport in Africa is chaotic and only getting worse by the year – degrading infrastructure, growing megalopolis and rising energy costs are not helping. I traveled in quite a few African countries and I had the dubious privilege of using public transportation such as the legendary minibuses which are a mandatory part of the African experience. At home in Paris, I mostly ride my bike. I always wonder why bike transportation is not more developed in Africa : it would be practical, sustainable and consistent with the local standard of living while extending business opportunities and access to goods and services – all while using few imported goods and mostly local workforce.

“At first glance the bicycle seems ideal transportation for many in Africa cities: most are flat, trip distances are short and money for private motor vehicles and public transit systems is scarce. But generally bicycles are underutilized in Africa” writes David Mozer in “The Bicyclist’s Dilemma In African Cities”. He notes that “a survey of literature by Africa writers indicates that bicycles were a prominent mode of transport during the first half of the twentieth century. But for reasons that are not totally clear the bicycle and bicyclist don’t fare well in the contemporary Africa city. [..] Bicycles are used less in most African urban centers than in many European and North American cities. Africans show a substitution directly between walking and motor transport as income increases“.

The difference with Asia is striking. Ten years ago, at the UNCHS (Habitat) Regional Symposium on Urban Poverty in Asia, A. Rahman Paul Barter noted many differences between bicycle use in Asia and Africa : ” In most Asian cities, bicycles are within reach of many poor households and have been widely used for the last several decades (Replogle, 1992). In Asia, unlike most African and Latin American cities, bicycles are affordable even to many of those for whom public transport is not affordable (Godard, 1997; Howe and Dennis, 1993; Tiwari and Saraf, 1996)“.

The difference may have a lot to do with the presence of a deliberate industrial development policy geared towards the building of a sustainable local cycling manufacture and maintenance industry : the UNCHS paper goes on : “Several Asian countries have successfully pursued policies in the post -World War Two era which enabled a local bicycle manufacturing industry to flourish and for large numbers of affordable bicycles to be available on the local market. The main low-income examples is China but bicycle manufacturing is also significant in India and Pakistan, while earlier Japan and Taiwan also developed very large bicycle industries (Replogle, 1992). In China before 1979 bicycle ownership and production remained something of a privilege but with market reforms bicycle ownership rose steeply (Hook and Replogle, 1996). China has also long provided direct government and employer-based subsidies to workers for the purchase of bicycles (Replogle, 1992). India and China have also managed to become large exporters of bicycles. The lack of a significant domestic bicycle industry and high tariffs on imports in Bangladesh contributes to bicycles being beyond the reach of the poor in Dhaka (Gallagher, 1992). There are some examples of successful credit schemes for the purchase of non-motorised vehicles by low-income people in Sri Lanka and Bangladesh (World Bank, 1996)“.

Why African governments have disregarded the opportunity to develop a home grown light industry consistent with local manpower, local competence, local needs and ressources is a nagging question, especially since such light industry can be the seeds of an economic biotope within which more sophisticated industries can develop in a grassroots fashion.

But practical obstacles and hostile individual attitudes toward cycling are also to blame, most of them catalogued in Rahman Paul Barter’s paper. I had the opportunity to interview locals about them. The objections related to security and afford ability are easily invalidated by the fact that in many African countries light motorcycles are overwhelmingly the popular way to provide individual transportation as soon as it is within economic reach, as anyone who has ridden among the hordes of mopeds can testify.

So what remains is prejudice against human powered vehicles in general and bicycles in particular as a serious mean of transportation. As I have heard from potential users in Africa, riding a bicycle is not recognized as a dignified mean of transportation. Physical exertion being shunned, the bicycle being seen as a child toy unworthy of an adult, cycling being incompatible with the socially accepted role of women… The objections I witnessed in Africa are strangely similar to the ones I hear in Paris. And apparently they are the same elsewhere in the world. A lot of communication work remains to be done everywhere in the world so that cycling becomes a serious choice for transportation. It is sad that even where it makes the most sense and delivers the most positive externalities, cycling still needs propaganda to convince transportation users.

Of course, cycling is not a universal solution. But it is a valid tool which is currently underrepresented in the transportation mix, especially in poor countries where in many situations where it is economically and practically optimal, it is neglected for irrational reasons. I hope that African entrepreneurs will see the opportunity along with micro-credit institutions and ambitious politicians who can foster awareness initiatives.