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More active mobile connections than humans

by | Aug 17, 2012 | Technology: Issues and Uses

The Mobile Moment is Only Months Away – Preparing For the Biggest Number Ever – Yes That Day Is Near: When One Tech Passes Human Population In Size

The ultimate number in technology is upon us. Within months, literally, only months now, we will reach the point in time that there are more active mobile phone connections on the planet than human beings alive. Not 100% penetration ‘by households’ or ‘by adults’. No. I mean 100% mobile penetration per capita. By humans alive. Counting literally everyone from babies to great grandparents.
This is totally, comprehensively unprecedented in the human history of technology. No tech ever, no tech, has even come close. Not television sets, not Playstations, not PCs, not Walkmans, not radios, not cars, not motorcycles, not even bicycles; not credit cards, not even bank accountsl; not books in print, not newspaper circulations; not the reach of electricity or landline telephones or even running water; not wristwatches, not toothbrushes, not even pens and pencils.. have been as widely used as mobile is today. And now comes the ultimate milestone. The first time ever, there will be a consumer technology that exceeds the whole human population by its size.

This is the big picture. This is the biggest story there ever was in any technology, ever. The most widely reaching technology ever – by a massive margin by now – and what is more, mobile is not just a telecommunication tool, it is also a digital, interactive mass media channel. It is also a payment channel. And it is the ultimate technology cannibal.This is your primer to understanding the most radical, utterly disruptive technology there ever was, and what it is doing now, and where it is headed next. This is a long blog, so set yourself some time. But if you are in telecoms, or media, or advertising, or the financial industry, or in travel, or retail, or education, or healthcare, or well, almost any industry from farming to fishing to forestry to funerals – mobile will change your life. This is your guide to your digital future. Do grab a cup of coffee and follow me after the break here to an adventure into the electronic eldorado, the digital klondyke that we call mobile. We are about to pass the Mobile Moment. That point in time, where humans for the first time ever, found a consumer technology that had grown larger than the total human population itself.

And a brief comment about why me? Why would some Tomi T Ahonen be telling you this on his Communities Dominate blog? Not because Forbes calls me the most influential expert in mobile, no. Because someone was going to be there, to see it from the start. Someone saw this massive Trillion-dollar industry at its birth. I was not smart enough to invent this industry, and I was not clever enough to get myself into a career where this was happening. It was all total coincidence, but there would be one country, where mobile first became a mass market (that was Finland). There would be one country, where mobile first exceeded all ‘expert’ views in its growth and size, where mobile actually grew past its fixed landline telecoms ‘big brother’. (That too, was Finland). Then there would be one country where mobile would pass the conventional wisdom of ‘one mobile phone per one human being’ (that was also Finland). This set up the logic that leads to today’s blog article. It is only possible to predict that some day mobile phone accounts will exceed humans alive, if some people are willing to walk around with two mobile phones (or at least, two or more mobile accounts, even if sharing them on one handset).

And that happened also, obviously in Finland. But there were three major telecoms operators/carriers in Finland at the time. The one where this was first observed was the biggest of the challengers in mobile – Radiolinja as part of Elisa Group. And there, before this was public domain data, the first to see the data suggesting these astonishing revolutionary trends, would be the team that examined subscriber growth – that was my team. I was literally the world’s first person to see the early data, in the country where it first happened, at the carrier/operator that first measured the phenomenon. My first calculation on the trend was done on my trusty PDA at the time, the HP LX 200 that I carried everywhere, and I sat in my fellow colleague Mikko Heijari’s office, when I first examined the fresh data we had just received, and I then made a preposterous projection, what if this trend were to continue…

999-Tomi
This is a picture of a young 37 year old Tomi T Ahonen, managing the unit for my employer, Elisa Group what was then the biggest revenue and profit engine in telecoms: International Calls. And one of my projects back in 1997 was the world’s first fixed-mobile service integration project that had me jump ‘to the dark side’ of mobile soon thereafter..

Since 1996 I have known, from data I have personally seen, from data that was not yet even released to the Finnish regulator and far less to the competitors, that mobile phone subscriptions would grow to pass fixed landlines (which happened in Finland exactly on that projection, by 1998) and also, that this was partly fuelled by the bizarre notion of multiple subscriptions. I was talking about this at telecoms forecasting conferences internationally as early as 1997 – and I was seen as a lunatic, a total heretic, obviously by my peers at that time. So it brings me great pleasure to track the path we have travelled since that first astonishing data point, that we looked at with Mikko, and I calculated, and then took to our boss, Matti Tossavainen at Elisa. And I am happy that this industry moves so fast, that I am still alive to see the ultimate proof. It is only months to the point where the human race sees the first consumer technology, that has more users than humans alive.

You will start to see that statistic reported by some analysts eager to grab headlines already towards the end of this year, 2012. By my current projection, we should pass the point when there are more active mobile accounts (prepaid and postpaid, combined) by about February or March of 2013. But that time is so near, we don’t count years anymore, now it is down to months. And the stories will start to break – albeit a bit prematurely, before this year is done. So lets put the biggest number of all time, into its proper context. This is also intended as background material for various journalists and analysts who may be writing about this unprecedented moment in human history. The Mobile Moment in History.

REALLY? UNPRECEDENTED?

Unprecedented, yes. An overused word often in hyperbole. But literally, unprecedented, yes. There has never been any consumer technology that exceeded the total number of humans on the planet by its reach. The planet has currently just over 7 Billion people alive. Automobiles have only reached about 1 Billion registered and in use. Personal computers do a bit better, at about 1.3 Billion when we add up all desktops, laptops, netbooks and tablet PCs like the iPad. Television? Is approaching 2 Billion TV sets in use worldwide. The Internet? When we add all PC based users, and all shared users (families sharing one PC at home; and PC based internet shared at various internet cafe’s and computer labs at schools and libraries), and add all mobile phone based users (smartphones, basic ‘dumbphones’ including HTML web and the more basic WAP) we get past 2.4 Billion users. Radio receivers? There are about 4.1 Billion of those across the planet. But we will have over 7 Billion mobile phone connections live and active very shortly. We are already past 6.4 Billion now in August of 2012 and the industry grow that fast, yes, that within months we will hit the 7 Billion number.

Yes, literally, no technology has been as widely spread, used by as many people as mobile. Wristwatches? No. The peak production of watches happened early in the last decade and their sales are now in gradual decline. We hear from various statistics regularly that the trend is away from wristwatches, to use the clock on the mobile phone. The writing instrument? Paper and pen? The humble pencil? Yes, very VERY widely used indeed. Except that 800 million adults are illiterate and have no use for a pen or pencil. Add to that about 1 Billion kids too young to go to school yet, and yes, the market for people who have even learned to read and write is only 5.2 Billion. And what of that ubiquitous technology, the toothbrush? I reported earlier an MMA statistic that the world has 4.2 Billion users of toothbrushes, which was I believe based on calculations on access to running water. The truth is actually a bit worse. A more thorough analysis including the sales statistics and replacement of toothbrushes reveals an even lower number, alas. The number of people who do use a toothbrush according to the 60 Second Marketer is only 3.5 Billion people. But the world will pass 7 Billion mobile phone connections live and in use, by around the time when year 2012 turns into 2013, give or take a few weeks.

DVD players? No, VCR’s? No. Playstations? No. All gaming consoles, PS family, Xbox and Nintendo? No. What if we toss in all portable gaming devices, Gameboys and PSPs into the mix, added to gaming consoles? Nope. Digital cameras? No. Any type of stand-alone cameras, digital or film based? No. What if we add camcorders, videocams and even any Super 8 film cameras that might still be in use today? No. Walkmans? No. iPods? No. Any type of portable music players including all cassette walkmans, all portable CD players, all stand-alone MP3 players and iPods – combined? Not even close. Home CD players and CD players in portable boom boxes? No.
There has NEVER been a technology in use on the planet that has 7 Billion active users or active paid accounts. Newspapers have a global circulation of about 450 million. Fixed landline phones only reach about 1.1 Billion landline telephones. Multi-channel TV systems, all cable TV, satellite and digital TV combined reach under 1 Billion television sets. Credit cards have under 2 Billion unique users (many of whom have multiple cards, though) and banking accounts reach under 2.5 Billion total unique users worldwide. If you have insurance for your home or car, the total unique user base of insurance is well under 2 Billion. But we are shortly reaching the point of 7 Billion active mobile accounts. Wow. This is a truly astonishing point in time.

WHO WINS?

So you may have heard that mobile is important to your industry or business or department or job. But what do others think of mobile? The first industry to feel the mobile invasion was fixed telecoms, obviously. Those battles were fought in the late 1990s and early in the past decade when many still thought it possible for fixed landlines to survive or ‘to win’ against mobile. Today fixed landlines are a niche in telecoms, mostly serving business customers and in residential uses, mostly only the internet connection. If you still have a home fixed telecoms landline (a third of Americans, over half of Finns have already abandoned the landline) and its connected to a telephone (rather than serving the internet connection or perhaps your home fax machine, haha) and it rings – will anyone answer it? No. Because everyone in your family knows that if the home fixed landline phone rings, it can’t be for them, because their friends call the mobile number directly. Isn’t this true? Yet a decade ago, if the landline rang, we answered it. Now if it rights, its either a wrong number or a sales call.

Phonebooth

TO SEE FUTURE, LETS REMEMBER RECENT HISTORY

The cellular telecoms revolution did not start with Marty Cooper’s famous Motorola phone. The first commerical cellular ‘1G’ First Generation analogue telecoms service did not commence in Chicago on Ameritech using that iconic Motorola phone in 1983. No. This industry started in 1979, when NTT of Japan launched the first commercial cellular mobile telecoms service for Tokyo with 30 base stations and a hideously expensive cellular telecoms service using carphones. So this mobile telecoms industry is now 33 years of age. Very young indeed. And its is taking scalps. It is claiming victories. The landline business? The fixed landline business is going, going, gone. I was just at LAX Los Angeles International Airport and walked by a wall that used to have a whole bank of payphones. Not anymore. I remember writing about it somewhat cautiously, early in the past decade, that at some point those payphones will be gone. Now increasingly they are. Finland was the first country to decommission all payphones and phonebooths.

The analogue version of mobile telecoms could not really do much other than eat into the telephone business. But then came digital. GSM launched commercially in 1991 in my native Finland, on the Radiolinja network (part of Elisa Group, one of my former employers). That ushered in the era of modern mobile telecoms including competition in mobile. With digital came the opportunity to offer new services, services we could not do in the analogue days of cellular telecoms. First up? SMS text messaging.

Makkonen
Matti Makkonen (then of Telecom Finland) inventor of SMS Text Messaging who later when we both were employed at Nokia, mentored me, and was the informal godfather to my Consulting Department at Nokia

Ah, SMS text messaging. Invented by Matti Makkonen then of Telecom Finland (now part of TeliaSonera) for which he won the Economist Award. Matti didn’t make any money on his world-changing invention, as SMS would then be integrated into the standard of GSM. The first machine generated SMS were used for testing networks in 1991 but it soon was put to commercial use. The first commercial text message, sent from a mobile phone to a mobile phone, was also on the Radiolinja network in Finland, using a Nokia mobile phone, by Nokia’s Riku Pihkonen to another Nokia phone in late 1993. Mobile would never be the same. Up to that point, it was totally correct to call this the ‘mobile phone’ industry or ‘cellphone’ industry. But SMS text messaging changed all that. In just 18 years, by 2011, SMS text messaging passed voice calls in the total number of users on cellular networks. Yes, you read that right. Today there are more people with a mobile device who use SMS text messaging, than who use voice calls, globally. We should no longer call it a mobile ‘phone’ or cell ‘phone’ anymore. I am trying to remember to call it only a ‘mobile’.

And what of other digital text-based communication? How about email? Well, SMS text messaging passed email in total users way back in 2002. eMail has 3.1 Billion active email accounts in use today, according to Radicati. SMS has 5.8 Billion active users according to the latest count by Chetan Sharma. SMS is by far the most widely used ‘data’ application and service on the planet. Yes, SMS is almost twice as big by users and reach, than email. SMS is more than five times as big as Facebook. And even those who are heavy smartphone users, who have subscribed to various ‘OTT’ services like Whatsapp or Blackberry Messenger or iMessage or Skype, will be using SMS regularly – the latest survey in July of 2012, of 2,000 smartphone owners in the USA and UK, found that 92% of smartphone owners still use SMS, even though most of those will have some kind of OTT services installed on their smartphones. And get this – of smartphone users – 69% say they ‘would be lost without SMS’. Yes, SMS is addictive, has been proven to be addictive in university studies from Belgium to Australia. As addictive as cigarette smoking. The very latest University of Chicago study now in 2012 found that also Blackberry messenger and the use of Twitter on mobile produce similar addiction as SMS text messaging. That was our first – first – innovation in mobile. 19 years ago. SMS text messaging was launched commercially in Finland on Radiolinja/Elisa network. And here we stand today, consumers say they would be lost without it.

MOBILE MEDIA STARTS WITH MUSIC

So then started the innovations. The first major industry to be hit by mobile digital disruption was music. In 1998 a simple innocent-seeming innovation happened in Finland, when a local internet provider asked to have premium price access to email via SMS. The mobile operators.carriers asked, are you serious? You want to charge a premium so you can send emails to our mobile phone numbers, as SMS? You are aware that the length is only 160 characters? Yes, that brave little unprofitable ISP in Finland said and suggsted that the carriers keep a third of the money, charging about one dollar per message. The carriers thought this was some email-to-SMS gateway solution to perhaps enterprise customers. And they laughed all the way to the bank. And then the traffic started to build. The billing systems whirred money and this little ISP was starting to receive massive monthly payments from each of the three carriers. There could not possibly be that much email traffic at these astronomical rates. A few months later, when the carriers looked into what that was – it was the ringing tone.

Little Finnish unprofitable ISP called Saunalahden Serveri ie Saunalahti (later renamed Jippii Group and now part of Elisa) had invented the downloadable paid ringing tone, in the Autumn of 1998. The mobile data services industry – the mobile media industry in fact, had been born. Saunalahti’s ringing tone business went profitable within weeks. The whole ISP went from loss-making to profits within months. And soon innovated into areas of downloadable logos and other early ‘premium data’ content. The ‘merger’ that resulted in Elisa taking over Saunalahti some years later, is said to have been a reverse takeover, the Saunalahti people negotiated such a good deal that they ended up taking control of Elisa Group in that ‘merger’. The little ISP that could..

Sara-3
The ringing tone concept was a group project within Saunalahti, there is no single inventor of the downloadable paid ringing tone as a mobile content format. But it was a small team. One of the experts on that team was my former Elisa colleague, Sara Melkko (who among her many accolades is also a bronze medal boxer for her weight class haha) who would later join me in my third book, 3G Marketing as co-author.

Ringing tones? Yes. Finland had the first radio chart of the bestselling ringing tones as early as year 2000 on radio station NRJ. A Finnish pop band, Nylon Beat, was the first to launch their newest single as ringing tone before releaseing it as a single or on radio or music video, also in year 2000. 50 Cent was the first major artist to earn more out of his ringtone sales of the hit In Da Club than he did out of the sales through traditional media channels.At its peak around year 2008 the global ringing tone business ran revenues of 5 Billion dollars, three times more revenues earned by the humble basic ringing tone, than total global revenues of the Apple iTunes music store for the iPod. That was ringing tones. While its peak has now passed and most phones can do far more advanced music and often create your own ringtones out of real snippets of your favorite music, the basic ringing tone still generated over a Billion dollars of revenues worldwide in year 2010, twelve years from launch. Over the past 14 years, the ringing tone alone has generated 30 Billion dollars of global digital music revenues out of simple, digital music that can only be played on mobile phones. The Ringing Tone was the first of the original and unique media concepts for mobile. It would not be the last.

The Ringing Tone was only the beginning. By 2002 we saw the birth of the first magical and unique trick in media that was impossible on previous legacy mass media including the internet, when Shazam launched in the UK. Shazam is the music identification service that now serves 150 million customers worldwide, identifies 4 million songs per day and earns 100 million dollars per year. Then we had ringback tones, invented in South Korea, another unique-to-mobile service that is worth several Billion dollars now annually. Then we got the full-track downloads, also invented in South Korea by Sony Music in 2003, with the first artist Ricky Martin selling 100,000 copies of his new tracks as pure MP3 downloads to early Korean MP3-capable musicphones, before his album was released. It was the enormous global success of those early MP3 music-playing musicphones – epitomized in the West by Sony Walkman branded musicphones and early Nokia N-Series, that forced Apple to rush its ‘iPod Phone’ ie what became the iPhone – to the market in 2007. But while the music industry initially resisted the mobile revolution when it didn’t see the value of early ringing tones, it has since taken on music with a vengeance. Warner Music Chairman Edgar Bronfman said in 2006 that “Wireless will become the most formidable music platform on the planet.”

The next media content to fall victim to mobile was news. Capitalizing on the speed of SMS, the Finnish newspaper Aamulehti was the first to offer headline news services via SMS. The paid news headlines soon saw the free variant, as Finnish commercial TV broadcaster, MTV3 introduced the totally free news headline service via SMS, where yes, advertising was introduced as the business model. This was year 2000 the birth of mobile advertising. Newsmedia around the world took to SMS and soon also its richer media cousin, MMS. Morgan Stanley reported that in China alone, 40 million consumers have subcribed to paid SMS and MMS based ‘tomorrow’s headlines today’ branded newspaper headline news services – that is equivalent to 39% of the total Chinese newspaper daily circulation, in paid premium news services delivered via mobile news. The telecoms regulator of India reported in 2010 that one third of all SMS text messages delivered in India are some form of media content like news, horoscopes, sports scores, TV v

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