ftp.ccc.de/.../29c3-5167-en-setting_mobile_phones_free_h264.mp4

[Applaus]

Ok, thank you!

I don't like crowded slides, so this is the most crowded slice I have.

What I'm gonna talk about is the telephony industry.

And what we know about the telephony industry is,

that it has been a long time been a closed sector.

And for fixed lines, and now we have the internet, there's voice-over-IP,

things are going better.

But this is not the case for mobile.

And one of the things, that is really changing the landscape,

is voice-over-IP, the Session Initiation Protocol and things like that.

And there are some kinds of extraordinary open source projects going on;

like OpenMoko.

What they are doing is, they want to create open source software

to run on your cell phone to get rid of all the closed-source things that are in there.

And on the network side people are working on projects like OpenBTC and OpenBDSC to create,

actually, the infrastucture you can use to build a network, based on open-source software.

Ahm..., at this conference we have one of those networks running, actually.

But there's still something missing.

Who of you is using a cell phone right now?

[Murmurs in the Audience]

Ok, so who of you have completly open-sourced the network and the, the hardware?

I see nobody

There isone particular reason: There is one thing we are missing,

and that's national coverage.

And there's the ease of use: That you can be anywhere in this country,

or in another country, you can pick up your cell phone and you can call.

You can reach anybody, you can be connected anywhere you are.

And that's what we where missing. And that's why we started the project Limesco.

Our aim is to be a network operator, or a phone operator.

Not completely open-source yet, that's the long term goal,

but that's not where we are right now.

But we want to go there.

We're three founders.

I'm just one of them.

The other two are sitting in the front row;

they deserve an applause anyway.

[Applause]

I'm only doing the scary part here.

But it started about two years ago

and we were just chatting in IRC about, well,

there are some things we don't like.

There are roaming charges.

And sometimes they're ridiculous.

And once we started the project, we actually learned there were charges far higher, than we even knew.

There are providers, when you roam in -for example- Australia, you pay 80€ per megabyte for data.

But there was a lot of lack of transparancy.

Or actually there is a lot of lack of transparency.

One of the things whe noticed in the Netherlands is, that if you have SIM-only packages,

and you have package deals, were you get SIM-cards and a phone with it.

But these are incomparable.

For Example: When you want to get a package deal, you can choose for a package

with 400, 600, 800 or 1000 minutes.

But if you want a SIM-only, you can choose for 250, 450, 670 and...

So, what I want to do is, I want to calculate my total cost of ownwership over two, or maybe three years,

given in to account my calling, my texting, my data uses and the device I have.

This isn't easy.

There a lot of other things, that I'm not going to dive into that in this presentation.

But one of the things that keeps getting back is supscription bundles.

They rock and they suck!

But they are a perfect marketing tool.

Because this is what you can say:

"You can call using our plan from 3.4 ct/min"

which is actually true, you can do the maths.

But this is only true if you call for exactly 550 minutes.

If you pay half of it one month, you pay actually 7 ct/min.

So, OK.

But... [pause], what if you pay more?

Out of bundle charges?

Well, then we just charge 30 ct/min.

And we can do that, because it is written in small letters, in small print

and nobody ever reads it.

Ahm, but there is another trick.

And that is unitization.

And in the Netherlands it's getting a hot topic.

In the telephony industry it is very used to pay per second and a start-fee for a single connection.

So for example, and this is something from our price sheet, there is a cost per call of 4ct,

which means you pay the 4ct, no matter what the length of your... ahm, the duration of your call is.

And you pay 10 ct. per minute.

Your cost per minute.

Now, if you're doing this and you're going to call for two minutes and ten seconds,

you can do the maths.

It's 26 ct.

OK, cool!

Now, ahm, there is something of a start fee, and we could do marketing again:

"We don't have a start-fee! Cool!"

What we don't say is, we also, ah, we let you pay per minute, and not per second.

So the same conversation is again now to minutes and ten seconds.

And we do it three times ten cents, and it's more!

It's just the simple things, and if you don't compute the details, then you are going to pay more.

Now, then there is another trick:

Because, hey, because we don't want to round by minute, but, we do the first.

I'm not going to do the maths, it's actually better than to round everything.

But with data sessions there is another trick in the sleeves.

Let's say we do 20 ct/MB when you're roaming within the EU, OK?

It's. it's fair.

Ahm, we unitize by blocks of a 100kB, ok that's fair, I've seen worse.

Ten megabytes for example. Per session!

Which means if you are in a train, and the session is dropped for a moment and a in a couple of seconds

you get a new session, we start counting towards the 100kB.

And for youTube, which you should not do when you're aborad and you are roaming,

this might not be a problem, but when you're doing SSH and you are just doing little data.

But if you spread it over sessions it will get a lot of blocks.

Now, my Android-phone can measure my usage, but you're operator may measure data usage differently.

For example: Per session.

Now when we're talking about what is in the industry in the Netherlands, ahm,

what companies are involved, there are actually three types of companies we're ´going to look at.

And fist there are the MNO's, which are the MObile Network Operators.

And in the Netherlands, we have three of them at the moment.

The largest is KPN, it is a former state-controlled company.

They have about 50% market-share in mobile.

The second is Vodafone.

They have about 25% of market-share, and they are from britain.

The german T-Mobile, which has the remainder 25%.

And we just had an auction for frequencies and Tele2 is going to join them soon.

2013

So things might change soon.

And another thing, that might be interesting for people in Germany too:

E-Plus actually is KPN.

Now those are the three MNO's, and they have a network.

They have antennas.

And they have an infrastructure to connect antennas to the remainder of the telephone industry.

But those are not the only companies, where you can buy your plan, your subscription, from.

And that's what we call "Vitual Mobile Network Operators".

They are virtual, because they don't need to have their own infrastructure.

And in the Netherlands we have around 50.

Ahm..., some of them are actually brands of the larger companies.

Some of them are small, targeted towards a niche.

For example, there is an operator specifically targeting people from Surinam.

But they are the brands you can see in a store, that you can buy.

One of them is "SpeakUp". It's a little less known, ahm, one.

This is the one I'm going to talk about in a moment again.

SpeakUp is the one we're working together with.

Limesco officially is not an MVNO,

because if we say we are we're getting in a fight, and we don't like that.

So, officially we are a reseller of SpeakUp, and Speak-Up is an MVNO.

And SpeakUp is using the network of T-Mobile, the antennas of T-Mobile.

But there is a company inbetween.

And this is called a MVNE.

A Mobile Virtual Network Enabler.

And we have four of them in the Netherlands.

There were five, but one of them went broke last year.

Aspider Solutions which offer services using the KPN Network.

There's Teleena, which have a nice network all IP-based.

They're offering services using Vodafone network.

And on the T-Mobile network we have two:

ElephantTalk and NarrowMinds

[laugher from the audience]

So, when you're a subscriber of Limesco actually this is the chain of companies involved.

T-Mobile is the one that owns and operates the antennas,

ElephantTalk has quite a bit of infrastructure in the middle

and SpeakUp and Limesco, we together, take care that you as the customer get your bill.

So, the most important thing MNO's are doing is taking care of antennas.

And the most important thing an MVNO is doing is subscribers and marketing,

and everything inbetween you can shift around.

So, going a little more into technical details, a HLR, a Home Location Register,

which in GSM is a compontent which is actually a database,

where all customers are listed with their SIM-card number and their key...,

encryption keys to communicate and perform authentication.

In our case this is shared between T-Mobile and Elephant Talk.

VLR is the Visitor Location Register.

When you're roaming to another country or to another operator,

you're subscribed into VLR.

So the network knows what to do.

Ahem, this is actually not important to us, because we don't actually have our own network.

But T-Mobile has a VLR, so iwhen you, as a Limesco Subscriber or from an other customer goal

are travelling to Germany and log on to the T-Mobile network,

you'll be subscribed in the VLR.

The SMS-Center also is managed by Elephant-Talk,

and the GPRS-Gateway-Support-Node, which is actually the gateway to the internet,

is also managed by Elephant-Talk in our situation.

But this can move, so for other MVNOs it may mean, that they're handling the SMS-Center themselves or something.

What we have as ambition, is that we want to do more ourselves.

For example the GGSN.

Because if we have control to the gatway of the internet, we can give more control to the end user.

Another thing which you can shift around is number blocks.

Ahm, alot of brands that are operated by KPN have one huge number block,

which is by KPN and is just shared among them.

While at the other side, in our case we make use of a number block whisch is registered to SpeakUp.

And [inaudible] routing.

This is one... This is very interesting in our case.

You can leave things higher up in the network,

you can let T-Mobile do the interconnection and you can make routing decisions and you can say to T-Mobile:

"Just route it to there!"

But in our case, what we're doing is: "Just route every call to us!"

And then we can make the dicisions in the end.

Which I'm going to do in ahh, tell a little more in a [incomprehensable] at the end of the presentation.

But one of the interesting things we've been investigating in the last to years is pricing.

Pricing is different for MNOs, MVNEs and MVNOs.

So let's star with MNOs.

What is the situtation for an MNO?

You have a couple of costs.

So first of all you have a lot of antennas, and you have infrastructure.

And these two tend to be expensive.

Because they are closed source under a lot of support contracts, and everything involved.

But this is equity.

You own them as a network operator, or you lease them.

And when you lease them, you don't need to have a large upfront payment to buy all the antenna's to create national coverage.

But they are owned by a network supplier or by the manufacturer.

And you lease them and pay by month.

Which is cool as an operator, because know you know you have a certain amount of costs every months,

and you must make sure you have income to cover those costs.

Now if you choose as an operator to own them, to own the hardware,

you have a lot of upfront costs and you use armotization to, ahem,

in accounting to spread the cost over a longer period.

Ahem, this is somthing that happens in accounting for every company,

the cost for the network operators is just a little higher than for a small company.

You have now, in your books, a certain amount of money you have to pay every month,

so you have to get income.

The easiest thing you can do is just: Charge your MVNE per month.

And that's nice, because you can say: Whatever happens, you need to pay me 1 million Euro's every month anyway.

If people are calling it or not, I don't care, you need to pay.

That's happening.

The next at, ahem, next is there are some administrative tasks.

And depending on how things are arranged, there are more or less of them,

but porting a number, transferring it from one provider to another provider,

and [incomprehensible] task,

ahem, ah, calling people in bad.. when you have bad tempts,

calling people to get those, ahem, to get your money.

It's all administrative actions which you want to do.

And they raise a charge for usage.

By the way, you can make up any way, as an MNO, you can make up any way of

charging your MVNE.

The thing is: It must be reasonable, because if it is not, they will not accept it.

But you're free to do.

What you're actually do is spreading the cost of your hardware over a large customer base.

Now, if you're going to do that, you can set up a cost per call, and a cost per minute.

We have already seen those.

But the interesting thing is, what you're selling is airtime, acces to the frequencies.

So you can do it in both directions, both for outgoing and incoming calls.

And we call that by the way, mobile originated, when your mobile starts it.

And we're used to pay as a customer, when we start a call,

but also network initiated, so going from the network to the mobile.

The MNO just charges an MVNE when that happens.

just using minutes or seconds, how you see it.

So looking at an MVNE, they have a different structure.

They have monthly cost, we have seen them,

and they have usuage related costs, we have seen them,

and besides that we have some administrative costs,

and we can have some infrastructure.

And we can, as an MVNE, choose how much we want.

So getting income now again, is the same like an MNO.