KEY POINTS:
All the glitz and glamour of the world's largest mobile phone show this week in Barcelona has come in the form of slick new multimedia-capable phones from the usual suspects - the mobile handset makers.
But listening in on the panel discussions and questions asked by analysts attending the Mobile World Congress and its clear that the current buzz in mobile is at the other end of the spectrum, in emerging markets where the aim is to get the price of a mobile phone down to US$20 or less.
The distribution of wealth in the mobile industry is changing as developing nations increasingly go mobile - China Mobile in China and Mexico's America Movil are now serious players in their markets and the incumbent operators want their own slice of the action. Witness Vodafone's US$10.9 billion purchase of a chunk of Indian operator Hutchison Essar last year around the time of the last congress.
Only around 20 per cent of India's population currently have mobile phones. That's a statistic that spells "goldmine" for mobile executives. Why pour billions into trying to deliver expensive mobile services to fickle westerners when you can brining millions of new customers online with voice, texting and mobile internet services in India and Africa?
It's a no brainer really, the best return on investment for mobile operators lies in the emerging markets. But crucial to success there is getting internet-capable handsets cheap enough to appeal to the average villager who doesn't have regular power or a bank account, let alone a computer at home.
The People's Phone
Hence we see in Barcelona this week, numerous low-end phones debuting to appeal to operators tapping the emerging markets. Take for instance the new US$20 handset from Indian company Spice.
Spice aims to sell 10 million phones in the next 12 months, an ambitious target. How does it get the price of the handsets down so low?
Well, the entry-level Spice handset has no screen which radically reduces the cost of materials involved. The price may even go lower, potentially giving Nokia, currently the biggest supplier of low-end phones, a run for its money.
Still, Spice isn't just playing in low-end phones. This week it also launched a video phone, one of the first in the world to feature phones that can be loaded with removable optical mini-discs.
Purple Magic
A collection of mobile hardware players grouped under the LiMo banner have a different strategy - to make highly-functional, 3G phones based on the Linux operating system.
A total of 18 LiMo-based handsets appeared at the show this week from a range of handset makers. In that sense, they're well ahead of Google with its Linux-based Android operating system.
Why does the LiMo Foundation exist? According to its website: "The existence of so many incompatible [mobile] operating systems inhibits developers of third-party software from investing in the development of unique applications - for business users, entertainment, games, music, etc - that will ultimately drive industry growth."
The aim is to push open standards and reduce software development costs, ultimately bringing down the price of highly-functional mobiles. As such LiMo supports, which include Samsung, Motorola, AMDand Purple Labs will likely position their Linux phones to serve the emerging markets too.
New horizons
One of the big talking points at the Mobile World Congress this year is the move among mobile operators to utilise lower radio frequencies to provide mobile phone services. In the GSM world we're generally talking about 850MHz and 900MHz spectrum.
In some cases the roll-out of services based on these frequencies is down to necessity - higher frequency bands are all used up providing mobile services in many countries.
But new mobile radio technology makes use of the spectrum a lot more efficient for providing mobile coverage - it can mean better coverage, particularly in rural areas and less cell sites required in network build-outs.
Telecom will roll-out a new GSM-based network later this year, using 2100MHz spectrum in main centres to deliver voice as well as mobile broadband services based on the high-speed packet access (HSPA) system. In rural areas it will use 850MHz spectrum to deliver so-called Edge data services.
Edge is a standard common in Europe and the US but increasingly outdated as its data capacity is limited - many were horrified when the iPhone was launched on AT&T's Edge network rather than as a full 3G device.
Anyway, the GSMA, the trade body representing the bulk of the mobile industry, is desperate to get more handsets out that work in the 850MHz frequency. It kicked off the Horizon Phone initiative, with a competition for handset makers to design a tri-band 850/1900/2100 MHz phone with HSPA support for mobile broadband. LG won the competition with two handsets that run on HSPA at 850/1900/2100 MHz and GSM at 850/900/1800/1900 MHz.
That bodes well for the likes of Telecom with its 850MHz network build and also for Telstra, which also uses 850MHz spectrum across the Tasman for its Next G network.
The same type of initiatives will likely to be used to kick-start hardware development for devices supporting the 900MHz band. It's early days, but by the time Telecom launches its GSM network there should be a range of devices that allow people to use the 2100MHz spectrum in cities and seamlessly switch over to 850MHz outside of the main centres.
The mobile operators armed with spectrum in that band will no doubt be keenly watching this space.
