Tag: Orange (Page 1 of 4)

Be Free! How an ickle player changes an industry

In the UK, there used to be attempts to make mobile calls free to users (Blyk tried to refinance this over permission-based advertising). It failed. In France, Free charges its users but is a) successful and popular with users and b) commercially viable. Oh, and c) it might just disrupt the mobile operator landscape in the long term.

I have been following Free’s endeavours for a while: they started disrupting the market with set-top boxes and subsequent offers around ISP services. They have just extended that to mobile and it has rocked the boat of many people significantly (for an in-depth review see Om Malik’s story on Free; this was followed by a flurry of reporting all over the place). In short, it is about the vision and balls of Xavier Niel. He founded Free on the back of gobbling up – through Free’s holding company Iliad – a lot of dark fibre networks in France (which he could afford last but not least because he sold his ISP pre-bubble rather profitably). Free built out the first triple-play service in France (with broadband, telephone and TV all over IP) and came out with a very competitive price, which it could afford because its parent owned the network.

Now it came out with a mobile offering on top of that. And it starts at €2 per month. Yes, you read that right. For the discerning digital afficionado (which you probably are when you are reading blogs like this one), there is a €19.99/month offer for unlimited voice calls (domestic and to 40+ countries), unlimited texts (and MMS if you are so inclined) and unlimited data. And, yes, you read that right, too. Check it here. The one thing I haven’t checked is international roaming rates but that only bothers a minority, I suppose (and, hey, perhaps they are as competitive).

Now, the really cool thing (or “disruptive” thing if you want to stick to present-day analyst lingo) is how they are doing this (and it is the very thing that makes traditional mobile operators feel so relatively uncomfortable). Since Iliad owns those masses of fibre networks, they can efficiently operate this. Now, they apparently start equipping their set-top boxes with femtocels and reserve a sliver of each of the bandwidth of those for their mobile network. This will greatly reduce their backhaul costs and allows users to enjoy higher bandwidth more often (at less cost to Free, too).

The “disruptive” thinking is, then, “only” applying the Skype model to the world at large, i.e. using the cheap(er) data networks to deliver a service so far associated with minute charges and the like. For Free, not metering, not data is important but the service. IP-driven business model vs old-school per-minute business model. I like this! After all, we are fast moving into a space where data is ubiquitous and merely a means to access services. So you pay for this access. Period.

The interesting thing is that all incumbent operators have swiftly announced that they would match the price. So have they been taking the mickey for all those years? Well… My guess is that they will not be operating with the same margins as Free does; they have been enjoying their place in the limelight for too long. So it will be thrilling to see if they will be able to turn things around quickly enough.

Conference: Mobile 2.0 Europe – Open Ideas (Barcelona)

The ever industrious Rudy de Waele and his team are staging the next version of Mobile 2.0 Europe in beautiful Barclona on 16/17 June 2011. Last year’s version was awesome but this year they seem to have upped the ante significantly again. Staged in Telefonica’s mindblowing R&D centre Diagonal 00 (just look at the picture, for heaven’s sake!) and boasting a speaker line-up that should everybody get going!

It’s a developer conference, so none (or little) of the usual preaching but you will get more hands-on workshops on everything from app store marketing to HTML5 development. And all this in summery Barcelona! Go on, sign up here!

And if all that is not enough, here’s a selection of the people that will speak with you, work with you, talk to you (a full speaker list is here):

  • Peter Vesterbacka, Rovio (yes, he, the Mighty Eagle of the “Angry Birds” guys)
  • Daniel Gurrola, Orange
  • Sanyu Kirulata, Blackberry
  • Reimund Schmaid, Nuance
  • Carlos Domingo, Telefonica I+D
  • Jose Valles, BlueVia (Telefonica)
  • Lucas Allen Buick, Synthetic (they of “Hipstamatic” fame)
  • Matthias Sala, Gbanga
  • Andy Goodman, Fjord
  • Caroline Drucker, Soundcloud
  • Vincent Hoogsteder, Distimo
  • Andreas Constantinou, Vision Mobile
  • Tom Hume, Future Platforms
  • John Roberts, Quostodian
  • Yes, and yours truly will also be there 🙂

See you in the sun very soon! 🙂

 

Microsoft & Skype

Allegedly, this morning Microsoft will announce it will buy Skype for $8.5bn. It is Microsoft’s largest investment into the digital realm so far (and a nice cash-out for the people who bailed Skype out from eBay a while ago; the valuation at the time apparently was put at $2.75bn). Besides these being big numbers (and allowing Skype not having to worry about an IPO anymore), this opens an opportunity for a new kind of animal in the communications corner of things. And here is why:

Microsoft is legendarily late to the party when it came to smartphones. Their Windows Phone 7 OS was labelled as too little too late although it received positive reviews on the merits. Then it struck a much discussed deal with Nokia, the ailing (former?) phone giant to ship its phones with WP7. So, if we add Skype, will this create the torso of a new type of communication service? Think Nokia handset + Windows Phone 7 + Skype = mobile VoIP on a large scale.

Did we forget an ingredient though? Ah, bandwidth. Hm… Skype is understandably much maligned by most carriers (with the notable exception of Three) as it shifts revenues from (high-margin) voice to (lower-margin) data. With most carriers struggling under the increased network loads higher-end smartphones consume in terms of data, a discussion started recently about contributions for such data throughput. Now, a lot of the larger carriers are multi-play animals: be it Verizon, Vodafone, France Telekom/Orange, Deutsche Telekom/T-Mobile, Telstra, etc, etc, they all provide both mobile networks as well as fixed-line broadband. It will hence be not that easy to just walk around them and “just make it so”.

Many people have talked about the ubiquity of WiFi hotspots and such like in many areas but I would humbly suggest that this is daydreaming rather than a robust basis for a truly ubiquitous device such as a mobile phone just yet (and it perhaps never will). The future would seem to lie in mobile networks rather than fixed-line anyhow (LTE and all), which means that there will need to be some sort of rapport between vendors and service providers (such as Nokia/Microsoft/Skype) and carriers, and even mighty Nokia has already lost a fight over Skype in the past (see also here). Likewise, Google had come out with lofty promises as to carrier integration and has failed miserably to deliver the goods so far (carrier billing on Android Market anyone?).

So voices that hail the arrival of a new era might well be a little premature. Now, given that Microsoft can work with Skype on the desktop side of things as well will ease the transition significantly. However, the be-all-end-all solution it is not, at least not yet. And if Microsoft and Nokia can deliver remains to be seen, too, I guess.

Back to work then…

Conference: Droidcon, London

On 28 and 29 October 2010, Droidcon London will open its doors again, exploring in multiple tracks the Android ecosystem. Business, Developer, Design or SDK/API – there will be something for everyone involved or interested in the fastest growing mobile OS (and associated ecosystems) at the moment.

For the main conference on Friday, the speaker line-up promises a lot of learnings and insights.

I will be there telling people on how to make money on Android (hint: yes, it will involve Scoreloop‘s tools… ;-)). But you should also come and see great speakers from:

  • Google
  • Admob (yes, I know they’re Google now, too)
  • T-Mobile
  • InMobi
  • comScore
  • Sony Ericsson
  • Motorola
  • Orange
  • Reuters
  • Qualcomm
  • INQ Mobile
  • Ericsson
  • Accumulate
  • Alcatel-Lucent
  • Device Anywhere
  • and many more (check here for a full list of speakers).

The conference will be preceded by a barcamp on Thursday (28th), which will feature, amongst other things, a Google Android boot camp and dotOpen’s formidable AppCircus.

I am hoping to see you there. Go here to register (or check here for the full programme on Thursday and Friday).

What matters: Handsets or Packages?

It is this time again: my phone contract comes up for renewal. And – as anyone who is following this blog will know (to recap, look here), I have not been all too happy with the treatment I got from O2 UK. So today I started looking around. Given my rather fat tariff requirements, carriers normally throw in all sorts of goodies (scil. free handsets), so started there. I have an iPhone 4 and a Nexus One already, so started to see what else is out there, as there are:

Then I started looking at where, what, how I could get it and at what price, and the UK carrier labyrinth was entered: The Omnia 7 is carried by 3, Orange and T-Mobile, not by O2 or Vodafone (at least I couldn’t find anything to that end). The HD7 is an Orange exclusive, the Trophy is a Vodafone exclusive. The Galaxy S and the N8 seem to be with all of them.

Step 2: tariffs. With an unhealthy amount of traveling abroad to do, my main cost item on phone bills regularly is data roaming, so this is where my sensitivity lies (because of the eye-watering bills I regularly get, I am not bothered about 600 or 900 UK any-network minutes costing £5 more or less), and it became clear quickly: Orange, T-Mobile and 3 are out of the race (their charges are even higher than O2’s). Vodafone looks good (about 1/3 of O2’s rates) but O2 claims to still have their Blackberry tariff for international data roaming (although I struggled to find it on their website). Now, THAT would bring my bill down by a cool £150-200 a month or so. Enter Blackberry. The Bold (which I dearly loved when I had it) or the Torch (which gets decent but still very mixed reviews)? And then: O2 again? In spite of my anger with them?

And then I started to compromise: anything exclusive to Orange, T-Mobile or 3 was out of the question (because data roaming is pretty much a killer for me), which boils it down to Blackberry and O2 or any of the others on Vodafone (which would mean that I couldn’t get what started being my favourite, the Samsung Omnia 7). Hang on: I compromise over some shoddy pounds? Is the handset then not so all important as one might have believed when reading all those blogs, news blitzes and tech publications over the last months?

And, yes, I think it is true to say that – at least in instances where there are certain usage requirements (in my case data roaming), the package is what rules. This is perhaps then the wedge that the carriers –  scrambling for meaning in this new app store world – could use to pry that dump pipe/smart phone dichotomy open. How’s that for an idea?

So, good folks at the carriers, listen up: do it (oh, Vodafone, and get me that Omnia 7, will you? 😉 ).

Vodafone pondering revenue share improvements

Last week, I moderated a panel at Mobile 2.0 Europe in Barcelona on “How to Make Money as a Developer”. Interestingly, there was no developer on the panel… 😉  However, there were representatives from Orange’s Partner Programme and from Telefonica, and I asked them if they would move from the “classic” 50/50 carrier revenue share (no one confirmed or denied the accuracy of that classic share of course) and, whilst they were clearly not willing to confirm anything (they probably couldn’t, to be fair), they did indicate that a revision of legacy models was under way in view of the not so new anymore challenges of app stores with their – now prevailing – 70/30 split in a developer’s favour.

This week, Vodafone came out a little more openly: at MEM, their Content Services Director pondered to

give […] it back to the developers to let them monetise it.

The big one then followed. She said – and this must be close to an industry-first – that carriers

don’t necessarily have to drive towards revenue for all of that content.

And that is the real point: I have long been arguing that the real value of (great) content to carriers may not lie in incremental revenues (be it 50% or 30%) but in softer albeit much, much more important values, namely marketing, positioning as well as customer retention.

An example: a couple of years ago, we shipped a whole suite of X-Men 3 content, game, wallpapers, tones, you name it. The launch was, of course, around the movie launch (which was tremendously successful) and we had carefully crafted marketing plans including many brand partners (20th Century Fox, Activision, Panini, etc). We managed to drive some exceptional campaigns to which carriers in a lot of countries contributed serious marketing dollars. Did they do this in order to obtain an SMS-margin-matching ROI? Not in the strict sense. To them, this was brand extension and affiliation. And, boy, did it work!

Carriers biggest trouble is ARPU and customer churn. I am not sure about the latest numbers but for years the annual churn was reaching towards a third. And that is real money. If you can reduce churn by only a few points if you provide your users with great content services, you will see your money back many times. It is (brand) marketing, not incremental revenues that make it.

Now, as long as the content guys have revenue targets, the (normally very mighty) CFO of a carrier will ask painful questions on ROI and margins; and they will always come up short. Classify it as a marketing task though, and you’re looking really good: effective marketing that should yield measurable results at no cost. Hang on: at negative cost. How cool is that? I know that many a content guy at a carrier agrees with me here. Would they ever admit as much in public? You must be kidding me.

It is therefore good to see that Vodafone starts thinking publicly about alternative approaches with a view to strengthening and/or supporting their core business. Now put it in motion, folks! 🙂

App Store Fragmentation: Vodafone & Android

It’s been looming and was long expected but today Vodafone announced it would embed its Vodafone 360 app store on two Android devices next to Android Market. Vodafone says their store would give partners a richer retailing experience than Android Market – but then they would say that, wouldn’t they?

But cheap puns aside, the move does have some legs: Vodafone uses Qualcomm’s Xiam personalisation engine, which provides recommendations based on user behaviour. They claim – and you may have heard that before in any number of my talks – that recommendations are a much stronger driver than promotions, stronger by a level of 4x to be exact. This ties in with my preachings: nearly 3/4 of all purchasing decisions (not only mobile, all of them!) are made on the recommendation of friends. And, alas, this is where “user behaviour” as the applicable pattern comes short: do I care how many, say, Amazon buyers of Grisham novels are also buying other authors’ crime thrillers? No. Why not? Because I don’t know these people. Do I care what my friends may think I like? You bet! Why? Because they know me and my tastes. Doh!

Anyway, back to Vodafone. They have realised (and, credit to them, admit it!) that a vertical implementation where you only get the full scope of 360 services if you have one of two phones doesn’t work. And, well, that’s somewhat obvious, isn’t it? Or is it a reasonable assumption that all my friends will all of a sudden (and at the same time) exchange their various handsets for a Samsung M1? No, I thought not either.

Vodafone did divulge a little data sniplet that must encourage them though, and that is that 360 customers have a 3x higher ARPU than others. If you look at the above (recommendations, friends, etc), that is not completely surprising. So now the next hurdle is to roll it out across their whole range of handsets. And let’s face it: a simple store won’t cut that on its own. Going cross-platform also means that – depending which handset you fancy – you may find different app stores of differing attraction competing with Vodafone’s own for attention (e.g. does Nokia’s Ovi offering seem to have more traction than, say, Blackberry App World but the latter has – from a publisher’s perspective – vastly superior price levels). All in all pretty sub-optimal, I think.

On a sideline: I will be moderating a panel on “How to Make Money as a Developer” this week at Mobile 2.0 Europe in Barcelona and I will be having the immense pleasure of having two operators on the panel (Orange and Telefonica-O2) as well as Microsoft (representing the OS side). This Vodafone announcement highlights some of the challenges the industry is facing. Interesting times!

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