Ong, R.Y.C.
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Ong, R. Y. C. (2010, April 22). Mobile communication and the protection of children.
Meijers-reeks. Retrieved from https://hdl.handle.net/1887/15349
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2 Mobile telephony
This chapter aims to provide a brief overview of mobile telephony. It is meant to make the reader familiar with the ingredients that are relevant when answer- ing theRQs introduced in Chapter 1. We start with a general introduction.
Rapidly developing mobile technologies have contributed to a variety of capabilities and functionalities that are becoming standard applications in mobile phones and other communication devices. The mobile phone, for example, has evolved into a platform that offers multimedia interactive expe- rience to its users. We attribute the mobile phone’s rapid evolution to two distinguishing features: its ability (1) to connect people and (2) to empower the user. The first distinguishing feature of the mobile phone, i.e., to connect (communicative element), is a significant element when considering the grow- ing need for society to stay in touch, to communicate, and to have access to information ‘anytime, anywhere, anyhow’. However, we are also seeing a changing trend in the way the society is connecting. We are no longer using the mobile to talk but we are also using the mobile phone as an empowering medium (see below) to play, to share, to view, to update, to invite, to consult, to message, and to conference.
In relation to having access to information ‘anytime, anywhere, anyhow’, this is observed in the provision of a variety of mobile audio-visual contents and services either without charge (free) or for a fee via premium-rate services.
Three types of content may be provided: (1) mobile customisation content (ring- tones, logos, and wall papers), (2) content of informational value (news, sport, weather, and financial market update), and (3) entertainment content. Some examples of entertainment content include a short movie and music clips, and mobile games. In order to take advantage of the mobility and portability of mobile devices, a number of other services have also been developed for the mobile platform. These take the form of dating services and location-based informational services.
The second distinguishing feature of the mobile phone is that it empowers the user, by placing the user in control. The user controls (1) how he can be contacted, (2) when he can be contacted, and (3) the type of content and services he wishes to have access to. The control that the user experiences in a mobile environment outweighs by far the control he has in a fixed environ- ment. Although, similar content and services are readily available in the fixed environment, the increasing demands and requirements for these new forms of wireless communication have propelled the development and evolution
of mobile technology and with it, mobile content development to satisfy the ever growing demands of the user.
The chapter starts with a brief discussion of the development of mobile communication technology (Section 2.1). Section 2.2 contains a brief overview of Hong Kong’s mobile telecommunications infrastructure and its players. The introduction of mobile content is dealt with in Section 2.3. The chapter con- siders the delivery of mobile content over various platforms in Section 2.4.
We conclude the chapter in Section 2.5.
2.1 THE DEVELOPMENT OF MOBILE TECHNOLOGY
Mobile devices have evolved significantly over the past fifteen years. The earlier generation mobile phones stayed relatively close to their original objective of providing vocal communication. They were neither designed to display pictures, graphics, and short video clips, nor to have the capability to play music, capture still images, and access and send e-mail. However, the mobile phones have evolved to incorporate greater user friendly applications.
Their size have also become smaller and their weight much lighter.
Three major generations
Historically, there are three major generations of mobile telephony with fast wireless data transmission. The 1stgeneration mobile phones, for example, were analog based. The 2nd generation (2G) mobile devices were based on theGSM(Global System for Mobile Communication). The data speeds of 2G mobile phones were between 9.6 kilobits per second (Kbps) to 14.4 Kbps.1 Shortly thereafter, an improvement on theGSMcame in the form of theGPRS
(General Packet Radio Service) 2.5G service. TheGPRS transfers data at 27 Kbps.2 Further development of mobile technology saw the introduction of 3G technology. With 3G,UMTS(Universal Mobile Telephony System) was used.
In comparison to earlier technologies, 3G provides faster data transfers at speeds of 128Kbps to 384Kbps.3This enables mobile users to access the Inter- net, to download files, and share videos. It also provides users with the expe- rience of the fixed Internet platform. With 3G, mobile phone screens have become larger with full vibrant colours. Furthermore, storage capacity has increased to take on the experience of a variety of audiovisual content of the Internet.
1 Ahlert, C., Nash, V., and Marsden, C., (2005), Implications of the Mobile Internet for the Protection of Minors, Preliminary Report of the OII-led Working Group on Mobile Phones and Child Protection of EICN, April 2005; available at http://network.foruminternet.org 2 Supra.
3 Supra.
Chapter 2 29
Emphasis is on applications
However, from the user’s point of view, the differences between the later and earlier generations of mobile phones are characterised by the applications which the mobile phones facilitate.4 We observe that it was only with the introduction of 2G digital cellular technology that we had the integration of voice and data communication. Thus, the first application ofSMS(short messag- ing service) andMMS(multimedia messaging service) were provided by 2G mobile phones. The application remains the best known application of 2G mobiles and is still a common form of text communication between mobile phone users.SMSapplication is popularly used to personalise a mobile phone to reflect a mobile user’s identity and fashion sense by downloading ring-tones, logos, and wall papers. With 2.5G mobile phones, the availability of entertain- ment content increased and became more varied to include graphic, photos, music, and games download. Communication via messaging became more personal and interactive withMMS. However without doubt, we observe that the mobile world ‘opened up’ with the introduction of 3G technology. 3G provides a full range of broadband applications available, including audio and video streaming, video capture, on-line gaming, and a host of other applications. Richer content, higher quality graphics, and greater interactivity is what distinguishes 3G from earlier generations of mobile phones.5Indeed, the next evolutionary step in mobile phone development is the introduction of smart phones seen in the form of for example, Apple iPhone, Blackberry, and Palm Pre. Possessing enhanced features such as Wi-Fi, web-browsing, MP3 and movie play-back, the smart phones are experiencing a rapid rise in consumer sales.6
Experience of new technologies
Although mobile technology and wireless communication are continuously evolving together with other standards that are recently developed, such as (1) WiFi and Bluetooth (2)WiMAXtechnology, and 4G, this chapter does not intend to focus on these technologies. The reason is that the more recent technologies and the mobile devices are currently not available in terms of (a) cost of service, and (b) cost of hardware, to children and young people.
We are of the opinion that when the devices incorporating the later standards and technology, become increasingly available to the younger generation under competition driven economies, the potential hazards and risks raised in Chap- ter 3 will become even more pressing to both governments and communities.
4 Supra.
5 Alhert, Nash and Marsden supra n.1.
6 Lohr, S., (2009), Smart phones rises fast from gadget to necessity, The New York Times, Techno- logy, June 9, 2009, available at http://www.nytimes.com/2009/06/10/technology/
10phone.html?_r=1; see also Perez, M. (2009), Smart Phone will be the next phone for many, Information Week, June 12, 2009, available at http//www.informationweek.com/news/
personal_tech/smartphones/showArticle.jhtml?articleID=21780102
2.2 TELECOMMUNICATION INFRASTRUCTURE INHONGKONG
Having considered the various mobile technologies, this section will briefly deal with Hong Kong’s telecommunications infrastructure (Subsection 2.2.1), telecommunication services, and mobile operators (Subsection 2.2.2). The telecommunications services in the section are restricted to mobile telephony services and do not include services such as fixed line telephony or Internet Protocol telephony. Moreover, we address the open access strategy (Subsection 2.2.3).
2.2.1 The infrastructure: mobile phone services
Licenses for mobile services were first issued in 1987 for analogue service.
This was rapidly followed by the issuance of digitalGSMservice in 1992. We observe that competition remains keen in the mobile services sector. As at August 2008, there were fourteen digital networks operating: four in the 800/
900MHz (of Megahertz) bands, six in the 1700 -1900MHz bands, and a further four in theUMTSbands.7
The telecommunication infrastructure in Hong Kong is well established.
With a population of just over 7 million, Hong Kong has over 3.8 million fixed telephone lines and approximately 8.8 million mobile phone subscribers. The number of registered mobile subscribers was recorded at 11,230,499 in August 2008.8 This represents one of the highest penetration rate of about 160.8%.
It can be compared to 10.98 million in June 2008 and 9.3 million at the end of February 2007; this represents an increase from 123 mobile phones per 100 inhabitants at the beginning of 2006.9As at the end of August 2008, out of the 11,230,499 subscribers, 2.961,460 are 2.5G and 3G mobile service sub- scribers.10In addition to voice services, popular applications and data services enjoyed areSMS, mobile internet, download services, multimedia, video, and mobile TV. Further with the current 3G network in the process of being upgraded with high speed downlink packet access (HSDPA) technology, 3G mobile-service users can experience higher speed data download of up to 3.6Mbps. In fact, the successful upgrade has led the increase in the number of 2.5G and 3G data-service users from 2.66 million in July 2006 to 2.94 million
7 Hong Kong: The Facts-Telecommunication, available at http:www.gov.hk/en/abouthk/
factsheets/docs/telecommunications.pdf
8 The number includes digital, PCs and pre-paid SIM subscribers. See Key statistics for Telecommunications in Hong Kong, available at http://www.ofta.gov.hk/en/datastat/
eng_wireless.pdf
9 As at July 2007, the mobile penetration rate is 139.8% with registered mobile subscribers standing at 9,674825. The number of 2.5G and 3G subscribers as at the end of July is 2,657,736. See http://www.ofta.gov.hk/en/datastat/key_stat.html
10 See Key Statistics for Telecommunication Services in Hong Kong as at August 2008; available at www.ofta,.gov.hk/en/datastat/eng_wireless.pdf
Chapter 2 31
in July 2008.11As of July 2008, 26% of mobile-service users in Hong Kong have subscribed to data services. We believe that the statistics provide a relevant indicator in that with the increasing number of 3G users, it is conceiv- able that the consumption of mobile content services and the exposure to inappropriate materials will likewise increase.
2.2.2 The players
Having briefly described the infrastructure for mobile services this section deals with the players in a mobile telecommunication sector. In this respect, we regard mobile network operators (MNOs) and mobile virtual network providers (MVNOs) as the two main players.
A: Mobile network operators (MNOs)
Mobile network operators (MNOs) are assigned a radio spectrum through which public radio communication service is provided. In Hong Kong, as anMNO
means a holder of the following: (1) a mobile carrier license, (2) a public radio telephone services license, or (3) a personal communication services license.
There are six licensed personal-communication-service-licensed operators in Hong Kong. The six personal-communication-service-licensed operators are also licensedMNOs. We provide details of the licensedMNOs in Appendix A, where we also provide two Figures. Figure A1 illustrates the market share of the respectiveMNOs in Hong Kong as at early 2005 and Figure A2 shows the mobile market in Hong Kong as at early 2006. In Appendix B, we illustrate by way of a case sample of CSL New World Limited Ltd via its brand name, One2Free. The case sample provides the typical mobile content that anMNO
might offer to mobile phone users in Hong Kong.
B: Mobile virtual network operators (MVNOs)
In so far as Mobile Virtual Network Operators (MVNOs) are concerned, we note that the establishment ofMVNOs is a fairly recent phenomenon. In Hong Kong, anMVNOis an entity that “provides mobile telecommunications services to customers through interconnection with and access to the radio-communica- tions infrastructure of a Mobile Network Operator (MNO)”.12Thus, anMVNO
11 OFTA Trading Fund Report 2007/2008; available at www.ofta.gov.hk/en/trade-fund-report/
0708/pdf.full.pdf
12 See Office of Telecommunication Authority at ww.ofta.com.hk. Other definitions of MVNO have been provided by International Telecoms Union and U.K.’s Office of Communication.
ITU defined MVNO as “an operator who provides mobile communications services to users without its own airtime and government-issued licenses” whilst OFCOM defines MVNO as “an organization providing customers with mobile phone services without owning any airtime”. See a brief description on different types of MVNO in http://web.si.umich.edu/
tprc/papers/2006/513/dewenter_haucap_workingpaper.pdf
does not have its own infrastructure. Rather, it uses the infrastructure of an
MNO.
The firstMVNOwasUK’s Virgin Mobile in 1999.MVNOs have been viewed positively since (1) they stimulate competition, and (2) are able to target niche markets.MVNOs promote competition as (a) they enable new entrants to enter the market without the large network building costs required, (b) they bring down prices and keepMNOs honest by expanding consumer choices, and (c) they promote the use of excess network capacity.13MVNOs provide an attract- ive complement to theMNOs by focusing on content creation and distribution.
Examples ofMVNOs include Disney Mobile, MobileESPN, and Vivendi Uni- versal Music Mobile.14
Given the popularity ofMVNOs in Europe, and with the view of opening up the telecommunication services sector, the Hong Kong Telecommunication Authority has provided for their establishment ofMVNOs in Hong Kong. Thus,
MVNOs provide mobile services to customers by access to, and interconnection with radio-communications infrastructure ofMNOs.15The issuance of a public- non-exclusive-telecommunication (PNET) licence to provideMVNOservices was part of Hong Kong’s liberalisation efforts to open the telecoms market by allowing companies which does not have their own networks to participate in the operations and the provision of local mobile telecom services.16This is in accordance with the Telecommunications Authority’s (TA) obligations on open network access.TA’s open access strategy is described in the following subsection.
13 Srivastava,. L., (2006), The Regulatory Environment For Future Mobile Multimedia Services, Issue Paper 2006, Document number MMS/03v2; available at
www.itu.int/osg/spu/ni/multimobile/presentations/ITUsrivastava_mobilemultimedia.pdf 14 Disney Mobile is a collaboration between U.S.’s Sprint and U.K.’s O2. The service will offer Disney branded mobile phones with restricted calling and internet access as determined by children’s parents. Children between the ages of 8to14 year olds will be targeted. See www.disney.go.com/disneymobile/. Vivendi Universal Music offers speciality music applications (including previews of new releases , music news, CD buying capabilities.
15 Note MVNOs are different from resellers. Resellers merely resell the service of the MNO without establishment and maintenance of any means of telecommunication. The services are marketed using the reseller’s own brand and billing function. See Leung, M., (2002), Mobile Virtual Network Operators in Hong Kong, April 2002, available at www.swedish trade.se/ittelekom/static/MVNO.pdf
16 In this regard, as far as MVNOs are concerned, the telecommunications system of a MVNO interconnects with a 3G network within the meaning of “interconnection” as provided for and required under section 36A of the Telecommunications Ordinance. A MVNO which satisfies minimum criteria has access to numbering resources.and mobile network codes.
As qualified MVNOs may seek the Telecommunication Authority’s intervention under the open network access regime.
Chapter 2 33
2.2.3 Open access strategy
The open network policy provides for licensed 3G network operators in Hong Kong to open 30 % of their network capacity to ‘non-affiliated’ service pro- viders.17Non-affiliated service providers includeMVNO, and content or service providers (CSP).18The open access strategy encourages capable, small, and medium enterprises to design and provide creative mobile applications. It is also envisaged that content providers will have the opportunity to provide new services over the networks at a fair price.19Thus althoughMVNOs do not have the right to the radio spectrum, mobile services are provided via the infrastructure of a MNO. In addition, MVNOs operate their own switching, billing, and database.20 As such, an MVNO provides the same services to customers as if it is anMNObut without owning a radio spectrum.
We observe that Hong Kong’s open access strategy is non-discriminatory in that (1) it enables service providers, whether MVNOs or content service providers (CSPs), to have access to the same transmission and supporting capabilities as the hostMNOwhen it serves its own customers, and (2) there is no difference in treatment of traffic associated with non-affiliated service providers that use the network. We note that the terms of access betweenMNOs andMVNOs including the minimum committed quantity of traffic volume over a minimum committed period of time are normally reached through commercial arrangements. In the event that agreement to provide access is not reached between the parties, the Telecommunication Authority may intervene. The intervention of the Authority where necessary, ensures greater competition at content, application, and service levels.
With a brief background of the policies and the regulations for the tele- communication sector, we proceed to consider why content has become an important factor in the provision of telecommunication services. In Section 2.3, we aim to consider the platforms available for mobile content delivery.
17 This is Special Condition 12 of the mobile carrier licence. Special condition 12 is normally incorporated as a clause in the MVNO network capacity licence agreement. See a sample of the agreement by HK CSL Limited, one of the Hong Kong’s licensed MNO at http://
hkcsl.locusin.com/wwwhkcsl/mvno/Reference_Network_Capacity_Agreement_publication_
version.doc. In fact, a MVNO may seek access to network capacity of more than the 30%
offered under the open network access obligations. This can be done through negotiations and commercial agreements between the MVNO and the MNO.
18 MVNOs and CSPs will buy access capacity at tariffs decided by the MNO. For example, the tariff set by CSL is calculated by the maximum mega bits per second (mbps) per month committed by CSL multiply by HK$65 million: http://hkcsl.locusin.com/wwwhkcsl/mvno/
3G.html. The Telecommunication Authority would only intervene if the published tariffs are (1) unfair, (2) discriminatory, or (3) anti-competitive: Special condition 12.4 of the licence.
19 Leung supra n. 15.
20 Supra.
2.3 MOBILE CONTENT AS NEW REVENUE
The promise of providing broad mobile multimedia experience was sufficient for telecommunication companies and government alike to see mobile content as a new revenue stream. Globally, this led to mobile network operators investing heavily in the infrastructure required for the provision of new generation networks, particularly for the spectrum rights to run 3G services.21 Furthermore, studies have indicated that the average rate per user (ARPU) is decreasing. Thus, in order to re-coup their investment on infrastructure net- works and to increase revenue from reducedARPU, content has become an important driver in the take-up rate of mobile technology. Consequently, in order to maximize their immediate profits and drive customer adoption of mobile data services, network providers will have to focus on developing and launching certain types of data services.
2.4 PLATFORMS FOR DELIVERY OF CONTENT
Technological advances in mobile communication have spurred the develop- ment of new business models to take advantage of consumers’ demand for mobile content. A diverse range of content and services are available on the mobile devices. Some services are new in that the services have been tailored to suit the mobile environment whilst some services have migrated from fixed environments such as the television and the Internet. We have seen examples of content that have been re-figured from websites and news media such as (a) news, (b) weather, (c) sport results, (d) financial news, and (e) interactive games in the sample case of One2Free. In view of the variety in the type of content and services offered, business models can take three forms (1) network operators offering their own content, (2) network operators allowing third parties to provide content, and (3) network operators providing open access to the Internet.22
Thus content delivered by these platforms will be briefly examined in the following subsections. Subsection 2.4.1 will deal with content produced by
MNOand Subsection 2.4.2 will deal with content produced by a third party in partnership withMNO. The third platform dealing with content provided over the Internet will not be examined since we assume that all readers are familiar with the nature and availability of such content.
21 For example, the U.K. spectrum auction in March 2000 was recorded to be the largest auction in history, raising £22.5 billion thus valuing the U.K. spectrum at U.S. $107.2 per person.21 This is approximately three times more than the Italian spectrum, four times more than the Dutch spectrum and fifty times more than the Swiss spectrum.21 All Italian, Dutch, and Swiss spectrums were auctioned in the year 2000. In total the European spectrum auctions raised £60 billion.
22 Supra.
Chapter 2 35
2.4.1 Content produced byMNO
A number of the content-producing services are delivered to mobile users by the network operator usingSMSandMMS. Depending on the nature of services and the content delivered, the services and content are normally charged at premium rate. Much of the content delivered would be suitable for the general mobile user. However, content may be developed to appeal to a particular segment of society. Examples of such content include adult content (including adult ring-tones), violent games content, and gambling content.
2.4.2 Content produced by third party in partnership withMNO
Mobile content may be developed and provided in partnerships with content providers and network providers. In some cases, the network provider may only provide ‘carrier service’ for the delivery of content to its users. Where content provision involves a partnership between content developers and network providers, it will invariably involve striking the right balance of involvement of the partners in the corresponding value chain. This is seen more specifically for example, in (1) sharing the development cost of content and applications, (2) sharing the risk amongst the partners involved, and (3) revenue sharing.23
As with most business partnerships, differences between partners and challenges will arise in the pursuit of the business venture. In such circum- stances, to reduce potential conflicts, guidance might be sought from successful mobile business models. One example of a successful business model is the experience of Japanese operators. A high degree of success can been achieved with an efficient business model like the Japanese business model. The Japanese business model provides a number of key factors which contributed to its success. The factors include (1) a high degree of flexibility, (2) an openness to content providers, (3) a functioning value chain, with operational control over most of the value chain from server to handset dealer, (4) a transparent billing system, (5) ease of content integration, (6) mass market availability of handsets, and (7) excellent marketing.24Although there is little evidence of conflicts arising betweenMNOs and content service providers (CSPs) in Hong Kong, being mindful of these factors will go a long way to help foster a better relationship between the parties.
23 Review of the Regulation of Content Delivered over Mobile Communications Devices, Call for Submissions, Department of Communications, Information Technology and Arts, available at www.dcita.gov.au
24 A prime example of a successful business model being NTT DoCoMo. See also McKinsey, Comparative Assessment of the Licensing Regimes for 3G Mobile Communications in the European Union and their Impact on the Mobile Communications Sector, available at http://
ec.europa.eu/information_society/topics/telecoms/radiospec/doc/pdf/mobiles/
mckinsey_study/final_report.pdf
2.5 CHAPTER CONCLUSION
On the basis of this brief overview of mobile technology in Hong Kong, we may conclude that the mobile telecommunication sector is responding well to the demands on modern society in (a) the continuous development of mobile devices (hardware), (b) the innovative creation of mobile applications, and (c) the establishment of business models. However, what is necessary for us is to venture further and to examine whether, and to what extent regulatory arrangements are in place to ensure that children and young people are protected against inappropriate mobile content provided over these delivery platforms. These are the tasks we set ourselves in Chapter 6.
