Dateline: Cairo, Egypt. I’m here to speak on Africa’s wireless future at ITU Telecom Africa 2008 – but as with many conferences, it’s the hallway chatter that’s the most interesting. Today I was talking with Carsten Clemens of Nokia Siemens Networks about the increasing divergence in mobile connectivity economics. For the next billion subscribers who want phones, the costs rise (as they are more rural thus less efficient to serve), while their ability to spend is dramatically lower. That’s not news; operators and their vendor partners around the world are working to lower costs to make mobile service a reality in many new markets.

But what I heard about from Carsten was an innovation that’s as much about a new business model as it is about lower system costs. In trial in Tanzania now is an extremely simple wireless base station with subscriber management run from a PC, with an equally simple antenna, all run from a solar-powered battery. The system can be managed by a village entrepreneur, someone perhaps who also sells drinks, soap packets and newspapers. The entrepreneur can set and collect a flat fee for intra-village calls, managed entirely by his setup. And a larger operator who supports him can benefit from unleashing pent-up demand for in-bound calls to the village from absentee workers, extended family, and others who previously had no way to reach the villagers by phone. “It’s still low ARPU,” said Carsten, ”but it can be attractive in these markets, especially if the operator sets it up in a franchise model, and an entrepreneur can add more villages to the systems he runs. It’s already working in a similar fashion in India.”

Downside: no data support yet. But compared to existing rural mobile setups that still require towers that cost $100K or more, this is breakthrough thinking — not so much in the use of low-cost equipment, but in the approach to revenue-sharing that creates incentives that suit the way developing-market villages work.

I visited Tanzania several years ago; here are some eager school girls I met. Their country is stunning. But it will be no less so when they have the same opportunities to connect to the world that I do.

Big day for the future of wireless in the U.S. market yesterday — the announcement that Sprint Nextel, Clearwire, Google, Intel, Comcast, Time Warner, and others have formalized their plan to collaborate in a nationwide rollout of a fourth-generation WiMAX network is nothing short of huge. This demonstrates how diverse the convictions are in the tech sector about the opportunity for an open, data-centric wireless broadband fabric, and it should end a great deal of debate about whether a Sprint-only effort to do that was going to succeed.

That’s progress of a very real sort. Just a month ago, April 2nd was a whip-saw day for wireless in the Wall Street Journal: The U.S. edition featured two contradictory stories cheek by jowl on one page. At the top, a report from Beijing on Intel’s splashy launch of so-called “ultra-mobile devices,” showcasing a number of new product concepts using a purpose-built low-power chipset and functionally offering something less than a PC but more than a phone.

But just below the fold, you’d have found a summary of the FCC’s reluctance, announced at CTIA, to force the U.S. wireless operators to open their networks to devices not authorized by the operators themselves.

The national WiMAX announcement, along with that first story on April 2nd, speaks to the opportunities we see at Yankee Group for an internet of devices well beyond today’s PC and phone approaches – although frankly I saw little in these early concept products to spark the demand that I do believe lurks in that gap.

That below-the-fold April story showcases the resistance of U.S. wireless operators to recognize one of the imperatives of the Anywhere revolution, which is for an open platform. The FCC thinks the operators are doing enough to open up their networks. But can a network be ‘kind of open’ any more than someone can be ‘a little bit pregnant’?

The good news is, we’re going to find out!  Onward and upward.

In the process of our trying to blaze a trail to an Anywhere future of ubiquitous connectivity, I often look for inspiration from others who have followed their own dreams and made a mark on the world. So I was happy to find an interview with just such a person online recently.

To set up what this person has achieved, try to name a US company that only released 8 products in the last 15 years, yet had every single one of those 8 products generate at least $350 million in revenue. Said another way, this company has never had a single product fail during the last 15 years in an industry where such failures are expected routinely.

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As most people probably know by now, Microsoft has abandoned its pursuit of Yahoo! The deal is dead, and Microsoft won’t pursue any hostile takeover options. In his letter to Yahoo! CEO Jerry Yang, Microsoft CEO Steve Ballmer cited several factors, notably money, Yahoo’s! poison-pill defense and the recent Yahoo!-Google ad outsourcing deal. What’s been interesting to me as in analyst has been watching the cognitive dissonance between the equity analyst/research crowd and the techies. Most everyone I know with a historical memory of Silicon Valley, and with a knowledge of how Yahoo! works, tells me that a Microsoft acquisition could have only ended badly. In short, the transplanted organ would have rejected its host.  As a friend of mine who works at Yahoo! put it, “You have to understand, the old-timers here hate Microsoft with a passion. About 20% of the staff would have left voluntarily, more-or-less immediately, and another 20% would have been laid off. And probably another 20% would have gotten disillusioned and left  over the next year or two.” If you’ll pardon the slightly messy metaphor, it would have been like transplanting an appendix which promptly bursts after the operation, poisoning its host and causing it to stagger around for a while. Perhaps knowing that the operation might have had toxic after-affects helped Microsoft come to its senses. I say “helped” in the sense that the primary cause of death for this deal was money, not culture. But still, the cultural mismatch of this deal was a contributing factor, and an under-appreciated one at that.

It seems to be that major news items like Microsoft’s proposed acquisition of Yahoo! always have a way of winding down on weekends. I read the news about Microsoft abandoning their offer on Saturday, and I was reminded of another major news item that ate up huge amounts of my time and went away with a whimper. That was the RIM/NTP injunction which was hot news for months and then fizzled away with a settlement on a Saturday in March 2006.

Now that the Microsoft/Yahoo! flap appears to be winding down, the media may be willing to consider the real news — that maybe Microsoft has bigger fish, than Yahoo!, to fry. As we’ve pondered numerous times in the past half year, where will Microsoft’s future profits come from?

Because they’re most certainly not coming from a secondary position in the competitive $50 billion global market for online advertising. We addressed this question of magnitude, margins and market dominance in our November 2007 Note: Microsoft Posts on Facebook.

I mean. After all. Yahoo! makes a decent amount of money…but nowhere near the kind of mad money that Microsoft currently earns from Windows and Office.

Now that the fund managers, desperate to make a quick buck (presumably to offset massive losses from the mortgage industry), are stepping back. Perhaps it’s time to get back to the business of digital media.

Which is to say. To get back to the difficult task of building digital audiences and monetizing them through subscriptions, advertising or a combination of the two. There’s a lot of work to do.

And that’s what Mike Goodman and I will be talking about tomorrow at the breakfast we’ll be hosting in New York City.

It’s good to be back to the business of digital media.

Yankee Group’s mission to chart the future of the Anywhere Network includes figuring out what it actually looks like as it emerges around us. If an informal poll of 250 telecommunications executives at two separate events in London last week is any predictor, the UK’s part of that global fabric must include fiber to the home.

At TEN2008, I shared YG’s forecast for hockey-stick growth in U.S. home bandwidth consumption, explaining that the network effect is not the only thing driving network demand on this side of the Atlantic: video, gaming, and a host of new activities enabled by broadband are causing home appetites for network capacity to explode. Moderator Peter Cochrane polled the attendees on UK household needs, and the group was nearly unanimous in its belief that fiber to the home (FTTH) is the right thing to do right now. (Only a lone banker from JP Morgan Casenove grumbled, “I don’t see how the British family needs more than 3 Mbps.”  Someone sitting next to me said, “Reminds me of Thomas Watson’s famous projection about the world’s need for computers…”)

Then at Yankee Group’s own roundtable later in the week, another group had the same energy on the topic — but further agreed that the British government has a large role to play in ensuring that it actually comes to pass. One participant put it this way: ”Various sources have estimated a UK-wide FTTH initiative as likely to cost between 9 and 15 billion pounds sterling. That’s only 28 miles of highway, a half a bridge, or something else equally modest. Why can’t our government see the incredible value it could create for our economy by pushing this forward?”

Just having survived trips in and out of Heathrow’s new Terminal 5 – stunning for sure, but hard to get to and, as with many airports, a giant chunk out of your day — the sooner we have a high-capacity infrastructure the better. 

[Meanwhile, a group of Swedish communications experts I met with in Stockholm last Wednesday were focused on making the mobile environment deliver on its potential to support Anywhere Consumers. See my summary of their assessment here.] 

My wife and I are tag-teaming being with our youngest son as he’s treated at Massachusetts General Hospital this week. Any hospitalization of a child is hard. But Mass General, along with several other hospitals in the Boston area, tries to counterbalance that hardship with services to make him feel at home. There is the usual TV in the room, DVD players, a fantastic playroom down the hall, and even ice cream socials in the afternoon. But in my opinion, one of the best ancillary services they provide is one that isn’t listed on their Web site and isn’t one you can see. It’s an Anywhere network — a free Wi-Fi connection to the Internet.

Now when we at Yankee Group talk about the importance of ubiquitous connectivity and the Anywhere network, people probably think more of airports and coffee shops rather than hospitals. But in many ways, free Internet access in a hospital is even more valuable than it is in those more mundane places. Why? Because the structured and intensive treatment inside a hospital tends to cut us off from the outside world. Our ordinary rhythms of school, meals, and outside activities get replaced by tests, doctors’ visits, and waiting — lots of waiting. Our normal fabric of social interactions unravels to be replaced by isolation and boredom.

But a networked hospital changes this. Wi-Fi means that parents can read the newspaper without leaving the room and going to the newsstand while kids can keep up on their favorite comics. We can stay in touch with friends and family members by email. My wife and I can rearrange our appointments and calendars as needed as we trade off sleeping at the hospital. I may go to work in the morning, but I don’t have to wait until evening to find out how our son’s day went — I get instant messages during the day. And in those cases where firewalls don’t prohibit it (sadly too often nowadays), my son can even video iChat with me over lunch from his MacBook.

Now some will claim that having free Internet access in a hospital exposes patients to privacy violations, online predators, and countless other online risks. But with todays kids sporting Wi-Fi-speaking Nintendo DSs, Sony PSPs, and cell phones, using a Wi-Fi network is less risky an experience than crossing the street. Not having Internet access in the hospital makes about as much sense to a modern kid as not having electricity.

For kids, the hospital Anywhere network is just a part of life. For parents of kids in the hospital, the Anywhere network is a lifeline. Kudos to Mass General for not only providing world-class health care to our child, but also for connecting him from Anywhere.

I am not a mobile web developer. Rather, I am more of a “weekend programmer” focused on traditional web applications. (I am a co-author of Apache JSPWiki, a Java-based wiki software package. No prizes for guessing that I wrote the security bits.) But even though I haven’t tried to do any mobile development just yet, my iPhone’s web browsing capability has gotten me curious about makes a good mobile application — from the nuts-and-bolts perspective. So it was with great interest that I read Brian Fling’s excellent Web 2.0 Expo presentation, Design and Develop for the iPhone and Beyond. I recommend it highly: not only did Brian teach me a few technical tips, he also clearly explains the mobile development stack, from the mobile operators up through the application toolkits. It’s a cracking good deck, too; almost as elegant and entertaining as Dick Hardt’s rapid-fire Identity 2.0 presentation from 2005.

Everyone loves hyperbole…or at least extreme positions and tales of gloom and doom: The sky is falling, and the world is coming to an end.

This week, we’re publishing a report called The High Water Mark for Interactive Cable. We’ll also be discussing this report and its findings in a webinar tomorrow.

It’s a far cry from Chicken Little, and we’re definitely not going to say that internet video is going to take over television. Given the negative margins to date, there are many questions that need answers such as business models, distribution and revenues.

And even as internet video taps into the flow of linear television advertising dollars, these are neither the ad budgets nor the types of television that we’re talking about.

Herein lies the difference: when we talk about targeted, digitally-inserted advertising, that’s Below-the-line (BTL) measured performance marketing. But when we talk about large audiences and linear schedules, that’s Above-the-line (ATL) advertising. Apples and oranges.

Meanwhile, there’s linear television, on-demand programming, and interactive video. These are very different things.

So when we say that this is the “high-water mark” for interactive cable, that doesn’t mean that we’re all in behind internet video as the future of television. Tune in tomorrow to learn more.

There is a great T-shirt in the gift shop at the San Francisco Museum of Modern Art that is brown with simple white block letters which reads “Design will Save the World.”  Such is the feeling that is germinating the Web 2.0 app development world. 

This week at the Web 2.0 Expo in San Francisco a number of key trends were highlighted for an industry that is beginning to show its maturity away from guys in garages and into a real business with real economics and revenue models. 

For me the most significant trend is who is being put in the driver’s seat for web application design.  Once the sole territory of the programmer, app development is going through a revolution.  Now it’s the graphic designers who are getting the tools they need to drive the internet.

This is largely being allowed by focussing on scripting, as opposed to pure coding, in the creation of applications.  It’s allowing those more comfortable with manipulating images to make their mark on the app world. Expect to see announcements coming from many of the major brands about evolutions in their products for development and design.

What does it mean?  Well to date applications created by programers have functioned well, but often lack image conciousness or feel.  This change will mean that apps in future will be as aesthetically pleasing as they are functional.  It is also putting more control of web development into the hands of brands and advertisers who want both a great look and functionality in their online presence.

Design will Save the World. And it will Save Silicon Valley.