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.
The title of this post is not meant in any way derogatory but with all the hype about the iPhone it is sometimes easy to forget that we are talking about a niche product that will probably remain a niche product (albeit a powerful and cool one!). In the rest of the world (feature phones aside), a few consortia are fighting for the open-source market, which is – let’s face it – a considerably larger piece than the small premium segment served by Apple.
Zed announced that it “will unveil a bunch of hugely ambitious community services at CTIA”. The new stuff was apparently previewed at a closed press briefing in Madrid today, to which, alas, I was not privy… Test services will apparently go live in two weeks’ time during CTIA.
Zed had announced it had invested a whopping EUR50 million in a web 2.0/mobile 2.0 strategy to drive subscriptions around community services “such as multiplayer gaming, IM, blogging and so on”.
After former owner Sonera had sunk legendary fortunes into developing Zed into some monster brand, most people thought it was more or less doomed. When Spanish group LaNetro took them over though, it re-positioned itself and, with 85% in-house produced own content (no royalties) and sometimes contested subscription bodels grew revenues to a rather impressive $320m in 2006.
Now, in the community area, Zed is said to contribute some of the cash it invested into statiOn, an application for PC and mobile that consolidates all these services in one place for Zed subscribers. Version 2 (what a fitting version number for a web 2.0 app) will apparently be launched at CTIA.
Whilst I believe it is entirely on the money to predict that “the mobile market will go the same way as the wired internet in the direction of community services”, I am not sure if a – arguably complex-ish – PC-mobile application is the way out; this does not give anyone anything new. In fact, a lot of social networks and communities already today seamlessly evolve into platform-agnostic things: Jaiku uses mobile as a major part, Facebook Mobile sees more users, MySpace and, again, Facebook have announced recent deals in the mobile space, Yospace (acquired by Emap; see also here) is serving 3 and O2 UK, my fine employer Hands-On Mobile has launched Yatta-Video on SFR and soon on other carriers, and everyone else has a “social network” or “community” suite on offer. So will we really need a specific application (downloadable?) that will help connect the two media? Isn’t it much rather about seamless — dare I say it? — convergence WITHOUT the need for additional (complex) application layers? Isn’t this one of the public secrets of web 2.0, its incredible ease of use?
Zed concludes its analysis that “the future is certainly not in solo personalisation products”. Well, yes, that might be true but is it really well enough positioned to capture users on their quest into the social networks, too, in particular in the light of the above? I will never ever discount Zed again, so I am truly intrigued by what they will announce and I really hope it is something exciting and innovative. Go on!
This could finally be the call for true M-Commerce: an impressive list of the silverback gorillas in mobile have apparently agreed to cooperate on NFC (near field communication). Nokia, Samsung and LG from the OEM side, Mastercard on the payment side and a whole raft of large carrier groups, including China Mobile, Vodafone, Cingular, Orange, Telefonica, O2, SFR, SKT, KPN, and WIND signed up. Since the chips are being provided by NXP (formerly Philips Semiconductors) and Sony, it may be expected that Sony Ericsson will also sign up.
This group could finally have enough muscle to push this technology into the market and solve the chicken-and-egg problem: only when a critical mass of handsets is equipped with the technology will it be attractive for vendors and service providers to equip their retail outlets, etc with the respective technology. The three handset makers now committed together represent nearly half of the entire market, which should give this a good push.
So, besides catching the London Tube and buying a Coke, you might also be able to download the latest games, applications and tunes to your phone, always paying by coolly waving your phone and quickly entering a PIN. Bright future…
