Thursday, 1 March 2007

Enterprise-focused mobile advertising

More news from the Netherlands. It's either really exciting over there, or I'm getting obsessed.

Vodafone has announced it will be launching mobile advertising focused on vertical sectors. Interesting. Previously attention has all been focused on the consumer market, but targeting enterprise makes some sense. Initially it's aimed at insurance brokers and pharma. Unlike low-cost consumer propositions, these are exactly the users that potential advertisers will want to hit. And they'll be prepared to pay big bucks to do so. Plus, if VF can subsidise the service it should help them bring some top quality users on board. Think of all those lovely mobile sales people with their €100/month ARPU!

It's all go in the Netherlands

France Telecom is allegedly looking to sell Orange NL. There's precedent of course. They disposed of Orange Denmark when it was apparent it couldn't reach sufficiently high market share. In Netherlands they have 12% of subscribers and 8% of revenue. This rumour has the ring of truth about it. Particularly, as Orange is clearly focusing its attention on 'going deep' in UK, France and Spain.

Another couple of interesting stories from Vodafone too. It has started to support MVNOs in the Netherlands. I guess you can't buck the market. First deal is with electronics retailer Dexcom.

T-One is shelved

Deutsche Telekom has dumped its FMC offer. Launched in August 2006 the intention had been to allow access via T-Mobile's 6,500 WiFi hotspots but the service has been shelved.

No real surprises there. FMC adoption has been patchy at best thanks to confusing pricing and no handsets. Also, with big bundles of minutes available to wireless-only customers, where's the appeal of hunting out a hotspot? Germany is also not the most appealing market in which to launch such an offer. Competition has been fierce from alternatives such as Genion and the landline replacements from Vodafone (Zu Hause) and T-Mobile (@Home).

More M&A imminent?

It looks like there may be a bit more M&A activity coming up in Europe. Deutsche Telekom has announced its plans to expand internationally, and not just in the territories in which it's already present. Tier 2 operators beware. So who are the targets? The biggest footprint gaps in Europe seem to be:
  • Nordic markets - rampant competition pretty much rules it out
  • More expansion to the east - adding to Poland, Czech Rep, Slovakia, Hungary, Croatia, Montenegro and Macedonia (sorry FYR Macedonia - mustn't upset the Greeks and Bulgarians) - this has some potential. Other Balkans markets may become a target and possibly Ukraine. Few would touch Russia with a barge-pole after the troubles other inward investors have had.
  • The south. Few potential targets in Spain, but Telecom Italia may be a target again. That didn't work out too well last time though. But, what with TI refocusing on becoming a media brand with Alice and regulatory issues with providing FMC services, TI seems to be seriously considering disposing of TIM. This may also interest Telefonica, which is in talks to take a stake in TI.
Also, Sonaecom has declared its interest in merging with Vodafone if its unsuccessful in acquiring Portugal Telecom. To be honest I'm quite shocked the regulator would allow this anyway. Only three operators in a saturated market. Admittedly one of the conditions would have been to make spectrum available to another operator, but any new entrant (if anyone's brave enough) would take years to reach any kind of scale. Yoigo in Spain has its work cut out and it's focusing very much on the low end of the market. 78k subs in 3 months is no mean feat though. I'd also be surprised if Vodafone wanted to sell out of Portugal.

Friday, 16 February 2007


Lots of interesting stuff from 3GSM
  1. Location - GPS and A-GPS seem to really be stirring an interest. So many location companies. Could we finally be seeing the rebirth of LBS? Possibly, but only when the devices come down in price. Nokia 6110 at €450 anyone. Those unit prices should come down soon and we may actually see GPS in high and mid-tier devices as standard. Big US pressure for it obviously thanks to the E-911 directive.
  2. Mobile internet - plenty of moves to mobilize web 2.0 applications. Which is nice. Nokia and Vodafone both announced tie ups with YouTube. Also MySpace and eBay getting even more interest. Is it finally happening? Following last year's hype about mobile TV I think operators are getting the message that these types of Apps are actually the most interesting.
  3. OS - much interest in OS and a few choice announcements from Samsung and Motorola about Symbian devices. I guess Linux-based devices are a little way off yet, but did see some nice ones from HK-based e28. Vodafone re-interated that they're focusing on only 3 OSes (S60, Windows and Linux) but they even admitted that they'll be pragmatic about it. Well, they have to be really - no SonyEricssons or Blackberrys? Crazy.
  4. Form factor - Samsung phones for the next couple of quarters are looking pretty sexy. Particularly the F520. Double slider.
  5. Music - nothing from Apple. Mind you, the MusicStation announcement from Omnifone looked interesting. More later.
  6. Tim Berners-Lee - I got to meet the guy who's #99 on the list of Top 100 Greatest Britons as voted by the great British public. Mind you Princess Diana made it in at number 3, so you judge the value. On the note of royalty, I also spied Prince Andrew legging it up the Avenue. Much less interesting.
  7. Arun Sarin - looking mighty peeved in the baggage hall at Heathrow. I was also on the flight - 5 hours on the tarmac at Barcelona airport. Not fun.

Friday, 9 February 2007

Vodafone adds YouTube and eBay

Vodafone announces eBay (8th February) and YouTube Mobile (9th February) further boosting it's portolio of web 2.0 applications.

I suspect the YouTube implementation won't exactly set the pulse racing. A selection of content. Hmmm OK. It'll be interesting to see how they charge for it. If it's on Live! it must be free to browse, so it must be up-front ads, surely. That's the logical option anyway. Charging per-KB for using YouTube will result in some pretty annoyed customers. Billshock galore!

I've never been convinced about eBay on the mobile. Retail purchases (like banking, home insurance, buying your holiday etc.) will wait until you get home! The one eBay feature that's really suited to mobile is keeping tabs on how your bidding is going.

Wednesday, 7 February 2007

O2 reports underwhelming i-mode take up

O2 has announced subscriber growth for i-mode. About 450,000 at present, up from 250,000 in June 2006, following an October 2005 launch. So despite a slightly improving range of handsets, growth is slowing. Also, no indication of how many people just fancied one of the phones and aren't really using i-mode at all.

Face facts i-mode fans, it's just not what people want. It was a pretty good solution 5 years ago. Now it's outdated. Full HTML browsing is where it's at. Look at what companies like InfoGin and Picsel can do with rendering and how clever the smart browsers are. A separate mobile internet is a thing of the past.

It's interesting that other i-mode operators have either pretty much dumped it (Cellcom, MTS) or "deprioritised" it (E-Plus). Before they stopped publishing numbers of i-mode subscribers a few quarters ago KPN and E-Plus had seen user numbers start to decline. And there is was all based on handset subsidy. In Belgium, where there aren't any subsidies, take up at KPN's BASE subsidiary was abysmal.

Vodafone/MySpace and Mobile Search

Couple of interesting announcements today.

1. Vodafone signs an exclusive deal to mobilise MySpace. We'll have to wait to see what the look and feel is like, but it's good news for Vodafone that applications providers feel there is a benefit to integrating their application with the operator, rather than just going it alone as a web app.

2. Mobile operators want a mobile-only search engine. For "mobile-only" we can probably read "non-Google". My guess is that they'll do a big deal with Yahoo. Otherwise, buy stock in JumpTap today.

All this is evidence of operators trying to flex their muscles in the value chain. Some would argue they're fighting a losing battle and should accept a dumb-pipe role. I'm sort of one of them. But I do think that ease of use is much more important in mobile services than on the internet, so there is a greater need to integrate services with devices (which should be what operators do!).

I also think that as operators start providing services across multiple access technologies their strength will increase. In a single service environment mobile operators are threatened by those above and below them in the value chain (or on either side depending how you draw your chains!). With multiple services and access networks they face a much more fragmented set of opponents. Can Orange get into IPTV and broadband. Of course. Can Nokia start making laptops and TV sets. Not easily. Although we'll leave aside the fact that Nokia used to make TVs, their attempt at a PC-style device is limited to the 770 internet tablet. Similarly, can Google provide TV? Or Sky voice services? They can potentially, but they're not good at it and they'd face strong opposition from incumbents in that space. A single service provider can divide and rule the devices/applications landscape.

Sunday, 28 January 2007

IFPI on mobile music

Bit late I know, but the IFPI published its report on 2006 music sales on the 17th January. On the mobile side of things they reported a few interesting nuggets:
  • Total value of the digital music market globally was $2bn (up from $1.1bn in '05 and $380m in '04)
  • Europe accounted for about 20% of the digital music market
  • Mobile music accounted for half of digital music, but it was a bit skewed by the figures in Japan, where mobile accounted for 90%. In Italy and Spain mobile music also dominated the digital music market

So if the digital music market in Europe is worth all of $400m (€300m-ish) then the mobile music market probably accounts for about €50m. To put that in context, the total mobile market is worth €200 billion.

Music the saviour of mobile????

Tuesday, 23 January 2007

Broadcast Mobile TV Faces a Patchy Reception

I wrote an article for Mobile TV News recently. Here it is in all its glory...

Across Europe mobile network operators (MNOs) are mulling their options for broadcast mobile TV. Should I choose DVB-H, T-DMB, MediaFLO or something else? Is the handset range good enough and cheap enough? Should I deploy my own network or rely on a third party? Yankee Group has spent a lot of time answering these and many other important questions. However the fundamental barrier is user demand. Broadcast mobile TV is supply-driven. MNOs are desperate to develop new revenue streams to prop up flagging ARPU while equipment and device vendors are eager to sell their wares.

Broadcast mobile TV has one great benefit: it builds on an established value case, i.e. TV. This makes it easier to communicate the proposition and establish the value than for other new services such as ringback tones or video telephony. According to recent trials from Vodafone, Telefonica, Canal Plus and O2, approval ratings amongst trialists is between 55% and 75% (see right). Compare this with the results of Yankee Group’s 2006 European Mobile Multimedia Survey (EMMS): 23% expressed interest in mobile TV. Admittedly the trialists, unlike the survey respondents, had experienced the service. However, trialists are unlikely to represent a random sample of subscribers, typically having a higher ARPU, and many trialists will have experienced it at a discount, or even free. In the EMMS Yankee Group asked what would dissuade subscribers from adopting mobile TV. Over 80% said they were less interested (the vast majority “much less interested”) if the handset cost €400 or the service cost €15/month. High price can turn off the most ardent advocate.

The weaknesses exposed by the Yankee Group survey have been reflected in commercial deployments. 3 Italia initially reported great success, signing up 111,000 subscribers by July 11th —six weeks after launch. The success reflects the extremely appealing content on offer: the FIFA World Cup (and an Italian win, at that). Since then, no further subscriber announcements have been forthcoming. However, by October 2006, it had slashed prices from €29/month to €19/month implying a less than successful autumn and a slim chance of hitting its target of 500,000 subscribers by end 2006. Other broadcast TV services from Virgin/BT Movio, Debitel/MFD and TIM also do not appear to have been wildly successful.

The introduction of mobile broadcast TV bucks a major trend in the TV market in recent years: demand for greater personalisation and interactivity. At a time when IPTV, cable and satellite TV operators are introducing more choice, e.g. video-on-demand and time-shifted TV, mobile operators are trying to move the other way - force-feeding users a limited choice of linear programming. The mobile is an interactive and personal device, more closely resembling the PC than the TV. Increasingly, as networks and handsets become more sophisticated, users will demand access to the same services on mobile that they have on their PC. For instance, they’ll want email and IM rather than SMS and they’ll want the internet on their mobile, not a watered down ‘mobile internet’.

So the future of mobile TV is YouTube rather than broadcast. MNOs will make some money from mobile TV on the back of strong branding and better picture quality. However, to be really successful the mobile phone must deliver access to the same personalised video services that the PC (and increasingly the set-top-box) delivers. Subscribers will increasingly demand this ubiquitous connectivity to content.

Friday, 12 January 2007

Has Apple done something this week…?

So Apple has finally come to market with its iPhone…and the crowd goes wild! Watching CNN in my hotel room in Porto there is blanket coverage of the launch. News sites and bloggers are falling over themselves to praise it to the heavens. Will it revolutionise the mobile world, or is it just another high-end phone?

Some thoughts:

  • Look and feel - From the pictures it looks pretty sexy, and that goes a long way as Apple proved with the iPod.

  • Functionality - No idea. It looks appealing but I’ll reserve judgment until I get my sweaty mitts on one. A phone with web browsing and an MP3 player isn’t exactly revolutionary! It’s all about the implementation. Today music functionality on most phones isn’t that intuitive whereas the iPhone will be able to exploit the installed base of iPod owners and their PC-based music store. A phone that’s compatible with your existing music is more appealing than ripping all those CDs again.

  • What no 3G? - The radio is GSM/GPRS/EDGE with WiFi. OK. Fine for browsing at home, but I live in the UK where there aren’t many EDGE deployments, so I’ll be browsing on GPRS. It’s unlikely that the WiFi element will include public hotspots, so users will be limited to sideloading at home for consumption on the move.

  • Price - Priced at $500 it will clearly put off a lot of people from day one. Also, the buying dynamics for mobile phones is different from MP3 players. How often do you replace your music player? Not often. Mobile phone? About every 18 months if you’re the kind of high-end user targeted by Apple.

  • Subsidies - Most of the mobile phones in Europe are bought by mobile operators, who then subsidise and sell on to end users. They’re unlikely to be enamoured of the idea of subsidising a device which looks like it will relegate them to a dumb-pipe role. Some will, no doubt, as they try to differentiate their service offering. Most won’t be that keen.

So the much-anticipated arrival raises many questions. Will Apple find any operators to support it? Will they even bother with the operator as a channel? Will users want to buy the phone anyway, at a substantial unsubsidised price? Will Apple become a service provider itself through MVNO deals?

Monday, 8 January 2007

Predictions for 2007

So what better way to kick off the blog than with a set of predictions. It's at this point that someone usually mentions the quote from the former IBM chairman about there only being "a world market for maybe five computers." Oops. Looks like I've done that too.

No doubt some of these will also come back to haunt me. In no particular order...

  1. Vodafone to sell out of Verizon Wireless - they've disposed of a stack of minority interests (Belgium, Switzerland) and a majority (Sweden), so why hold on to 45% of Verizon Wireless. Sure it generates a lot of money, but the new strategy of getting into emerging markets won't come cheap. So if the price is right, I think Arun will sell. Next target: the rest of Vodacom plus MTN. They cover most of Africa and the only footprint overlap is South Africa.
  2. Hutchison Whampoa sells 3 - the X-Series announcement was effectively the last attempt to really kick-start 3 as a mobile media company. If it doesn't pay dividends in terms of market share gains, ARPU increase and crucially a reduction in subscriber acquisition costs, expect H3G to head for the door.
  3. SonyEricsson will have a good year - what a great range of devices!
  4. Flat-rate mobile internet becomes the norm - X-Series should shake things up a bit, following in the footsteps of web'n'walk. People want the internet on their mobile, not mobile internet. Any mobile operator that gives the people what they want will be on to a winner, even if it's only a £5/month winner.
  5. Mobile music still won't generate any revenue (except for ringtones) - if the entire digital music market in Europe in 2006 is only worth about €300m then just how big can the mobile music market be? About 10% of that I'd say. That's backed up by the limited numbers released by the operators: a few million sales here, a few million there. In revenue terms it's not huge (particularly because there are a lot a 3-for-2 and bundled deals for example). About 0.5% of the mobile entertainment market - that puts it in perspective eh?
  6. Everyone will plump for DVB-H - It's the only really viable choice. Anything else is a stop-gap, won't have any handsets or will arrive too late. Personally I think operators have overestimated how much people want to revert back to the days of linear programming when they're increasingly embracing interactivity and choice. YouTube on the mobile is what's really appealing, not re-runs of Lovejoy (although now I mention it, I always had a soft spot for the mulleted lothario). Shared DVB-H networks all round.
  7. Fixed mobile convergence won’t make the splash it’s expected to in the consumer market. FMC is a supply driven proposition. Users don’t care about the technology, no matter how clever it is. They want cheap (and that includes incoming calls, broadband fees and line rental), convenient (one number please!) and a good handset (nice phones though they may be, a range that consists only of the Nokia 6136, Samsung P200 and Motorola A910 is not good enough). With increasingly large bundles of voice minutes, mobile-only options can match FMC offers for consumer appeal. However, if O2 can come up with an intuitive and simple pricing model for its low-power GSM home base-station (something like Genion for instance) it should have a small hit on its hands. BT is sensibly focusing Fusion on the enterprise now.
  8. MVNOs will continue their onward march. MVNO competition will bite in France, depressing ARPU. Similarly E-Plus’s aggressive wholesale strategy in Germany will see it gain market share. MVNOs in Spain won’t have a substantial impact until 2008 though.
  9. Consumer mobile IM and email won’t take off. Mobile operators are scared of alternative messaging applications due to fear of cannibalisation of SMS. As a result offers remain mostly unattractive (including per-event charging). This will largely persist in 2007.
  10. Carphone Warehouse will suffer. Vodafone withdrew the rights to sell its contracts (although they can do upgrades) and its name is mud with everyone who tried to sign up for its free broadband offer.

Sunday, 7 January 2007

New Year's Resolution

This is it. To start a blog dedicated to all things mobile. I thought it was high time I shared my miscellaneous musings on the world of wireless and maybe someone will find it interesting. Or perhaps I'll just be talking to myself.

I'm a mobile analyst, currently working for Yankee Group, with 10 years (is it really that long?) experience covering all aspects of the mobile industry. But don't hold that against me. I'm going to share my opinions (of which I have many) on what I see and hear in the mobile world, commenting on the news, reporting back on events, offering random musings and generally putting the wireless world to rights.

So here it is, The Wireless Noodle...