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Voice and SMS Still the Key Mobile Services

Value of Mobile Internet Services Perspectives Seminar Schloss Dagstuhl, Wadern January 24, 2008 Heikki Hämmäinen Helsinki University of Technology Department of Communication and Networking Technology. Voice and SMS Still the Key Mobile Services. Y-axis: Usage Frequency X-axis: Penetration

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Voice and SMS Still the Key Mobile Services

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  1. Value of Mobile Internet ServicesPerspectives SeminarSchloss Dagstuhl, WadernJanuary 24, 2008Heikki HämmäinenHelsinki University of TechnologyDepartment of Communication and Networking Technology

  2. Voice and SMS Still the Key Mobile Services Y-axis: Usage Frequency X-axis: Penetration Size of circle: Usage Activity Voice SMS Streaming Multimedia Camera WLAN Browsing Gaming Installations IM Productivity Email Radio MMS PoC Offline Multimedia Video Call

  3. Many Try – Not That Many Use Repetitively Share of Panelists % Tried Once Tried Several Times Repetitive Usage Browser Music Camera MMS Calendar Email

  4. Non-Communication Usage is Increasing – From 30 to 40% Communication 70% and other 30% Communication 60% and other 40% Typical user: 22 minutes of usage / day Typical user: 33 minutes of usage / day

  5. WLAN is Emerging Among the Early-Adopter Users Although only 1% of all panelists have used WLAN bearer, already 15% of all aggregated traffic is generated by WLAN bearer. Traffic volume intensity of WLAN is high because of bandwidth and pricing.

  6. Not All Interest Converts Into Use

  7. Pricing is the Key Bottleneck in Driving New Services

  8. Value of time? • Parameters collected of each transaction • time stamp, duration, location, etc • (value/price tag?) • (mental/physical state?) • Prices not available, but can we use time to measure value indirectly? • Value of time vs. utility theory?

  9. Consumer’s ProblemConflicting interests Consumer surplus, CS Producer profit Consumer utility, u Consumer price, p Producer cost, c Product value • Consumer tries to maximize consumer surplus, CS • Consumer’s utility from a product is dynamic • Producer tries to maximize producer surplus, profit, p-c • Social planner tries to maximize social welfare, u-c

  10. Consumer’s ProblemUtility function utility u(x) px maximized net benefit = max[u(x)-px] x x(p) • u(x) is typically increasing and concave • Consumer chooses x(p) because of maximal net benefit • Cummunications expenditure is small wrt total income • Utility of communications is quasilinear wrt income • Level of income has little impact on u(x)

  11. CONTACT Heikki Hämmäinen Heikki.hammainen@tkk.fi http://www.netlab.tkk.fi/u/hammaine

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