Posts by Thomas Husson (bio)

Thomas Husson | May 06, 2008, 03:38 AM
Vodafone to offer Apple's iPhone in ten markets

After the UK (02), Germany (T-Mobile), France (Orange), Austria (T-Mobile), Ireland (O2), the iPhone will be available via Vodafone in 4 new European countries (Greece, Italy, Portugal, the Czech Republic).

Interesting to point out that Spain is not included in this announcement, probably meaning Apple will find another partner (Telefonica?) for this country. Benelux and Scandinavia are also still missing to the European iPhone equation but they represent limited volumes.

Indeed, later this year, Vodafone customers will also be able to purchase the iPhone for use on the Vodafone network in 6 other countries around the globe (Australia, Egypt, India, New Zealand, South Africa and Turkey).

At this stage, Vodafone is not announcing any further details at present. Which version of the iPhone will it be? Will Vodafone subsidize it (not very common practice in the Southern European prepay countries)? When? Is this an exclusive agreement with Apple?

There are lots of unanswered questions. Since the announcement of the launch a year and a half ago (in January 07), I am still wondering how Apple can really disrupt the market without embracing one way or another the mobile ecosystem.

No doubt such an agreement will help boosting sales and reaching the 10M objective at the end of 2008. Jupiter has already pointed out reasons why Iphone did not perform well in the more competitive and fragmented European market. Some operators (T-mobile, o2) have recently slashed prices (99 euros only with T-Mobile...but with a 99 euros monthly contract and a lock-in period of 2 years). This is also part of the natural life cycle of a product and an indication that new prodcuts may follow sooner than later. Let's just hope that the long-awaited 3G version will be HSPA. Anyway, it must be, otherwise the competitive advantage over EDGE would be too limited and Apple would be lagging behind competitors.

Thomas Husson | April 29, 2008, 10:07 AM
DVB-T just in time for EURO 2008

Echoing my previous blog, I just received some more news on mobile TV: Vodafone Germany will launch two new DVB-T models just in time for EURO 2008.

It reminds me of DVB-H just in time for the Football World cup. What happened in 2 years' time?

Well, to the great surprise of operators, the DVB-H license was not attributed to them but to another consortium of mobile 3.0: Neva Media (mainly owned by media companies Burda and Holtzbrinck) and MFD (Mobile Fernsehen Deutschland).

T-Mobile may well follow Vodafone, making it even for complex to monetize the DVB-H license. In my opinion there are lots of unsolved business model issues in both cases.

Using a combination of DVB-T (leveraging an existing ecosystem) and MBMS (moving forward) is an alternative contemplated by other players. However, DVB-H promoters are still adamant that DVB-T is by definition not optimized for mobile phones (impact on battery life, antenna, coverage, not an IP-based solution...). Which is by the way the very precise reason why DVB-H was created!!

Thomas Husson | April 28, 2008, 06:54 AM
Swedish dongles - part 2

I don't read Swedish but like me you'll understand that beyond SE performance in 3 Sweden shops, the key takeaway here is the fact USB Modem Turbo 3G sales more than any phones in the list below
---------------
Sony Ericsson dominerar aprils mobilförsäljning på 3!

Sverige är ett Sony Ericsson-land och i april lade den svensk-japanska mobiltillverkaren beslag på inte mindra än sju av platserna på mobiloperatören 3s försäljningslista.

Som vanligt kan inget hota mobilt bredband på förstaplatsen. Resten av listan domineras dock stort av Sony Ericsson som dessutom bidrar med tre nykomlingar för april. Smidiga lilla K530i gör en comeback genom att gå in på tredje plats, den bruna versionen av bästsäljande nykomlingen W890i är ny femma och svarta varianten av favoriten K770i är ny sjua. På listans åttonde plats finns 3s egen Skypephone och vinterns storsäljare Nokia N95 8 GB ligger trygg på fjärde.

1. (1), 3 USB Modem Turbo 3G
2. (2), Sony Ericsson W890i 8 GB Silver
3. (ny), Sony Ericsson K530i Silver
4. (3), Nokia N95 8 GB Black
5. (ny), Sony Ericsson W890 8 GB Brown
6. (6). Sony Ericsson K770i Purple
7. (ny). Sony Ericsson K770i Black
8. (4), 3Skypephone
9. (5), Sony Ericsson W660i Black
10. (7). Sony Ericsson K770i Brown

Den här topplistan visar försäljningen under den gångna månaden via 3s website, telesales, 40-talet egna 3butiker och närmare 1000 återförsäljare över hela landet. Siffran inom parentes är föregående månads placering

Thomas Husson | April 24, 2008, 08:23 AM
Swedish dongles

I spent a few days in Stockholm recently. Really nice city by the way.

I was intrigued in 2007 by some stats from Telia reporting that for several months in a raw modems / USB Sim cards were the top-selling units in Telia 76 Swedish shops.

So I decided to spend some time in Telia shops but also in competitors' high street shops and in independent retailers outlets.

Well, merchandizing usually tells you a lot. There were really "dongles" everywhere, promoted at every corner. They cost roughly nothing provided you pay 200 Swedish Kronen (around 21 euros) per month during a year.

It is an easy sell. Most consumers decide based on a mix of coverage and price according to the vendors I spoke to.

Operators accross Europe (see the pic from the Voda billboard below) are promoting dongles but it seems that Austria and Sweden are ahead, probably because they have a dynamic 3G market with a good coverage. Another interesting reason is that Swedes (but also Finns, see here) have one of the highest rates of second houses / summer houses in Europe. Why paying a full Internet package when you just need to bring your laptop? Ah working from home in a nice Nordic island...

Thomas Husson | April 24, 2008, 08:00 AM
100,000 subscribers for Blyk

Blyk just announced that they had hit the 100,000 member target six months ahead of initial plan (end 08).

The ad-funded MVNO has announced it will launch in the Netherlands (sometime in S2 2008) and is willing to expand in other European countries.

It is an interesting concept. The company will have to adress 3 main issues moving forward:

- widening the installed base so that advertisers and marketers benefit from a larger reach

- making sure ads are perceived as information/entertainement so that the growing number of youth attracted by the offer will continue to engage with brand messages

- find a profitable business models in countries where market conditions are not ideal for MVNOs. In this regard, bear in mind Blyk is not a totally free offer. Customers get 43 minutes and 217 texts every month for free and have to pay a fee when they reach this ceiling or when they use other services. This is also part of complex modelling of their profitability approach.

Thomas Husson | April 24, 2008, 05:11 AM
DVB-H to be launched in Switzerland and Austria

As expected with the forthcoming UEFA Football cup, Austrian and Swiss players will soon launch DVB-H mobile TV offerings. See here and here.

As in 06 with the German World cup, the idea is to leverage a sport event as a marketing catalyst to educate customers on new services. It worked pretty well for 3 Italy who managed to acquire 250,000 subcribers in the 1st 5 months (most of them during the 5 first weeks of the Worldcup...won by Italy) out of an initial objective of 500,000. At the end of October 07, 3 had reached 750,000 activations. Not all of them pay a fee on a monthly basis though. That being said, 3 Italy is always presented as the successful case study for DVB-H in Europe. It is true usage patterns are quite high for the circa 10% of the installed base who has used the service.

Many other European countries have postponed their DVB-H launches, so it is good news that Swisscom is now officially launching on May 13. As for Vodafone and TIM in Italy, the offer will launch with a very limited range of products: only the Nokia N77! However, the device is heavily subsidized (CHF 1 if 2 years lock-in period on a 25 CHF monthly contract). Samsung SGH-P60 and then N96 (Nokia's new flagship device is supposed to ship in q3 2008 at 550 euros befores taxes and subsidies) will follow. However the DVB-H coverage is pretty ok (44% of the Swiss population according to Swisscom). For the moment, the other Swiss operators are not joining board and are not ready to pay Swisscom Broadcast who owns the Swiss DVB-H license...

Beyond Italy, there are plenty of references to the success of mobile TV in South Korea. When you digg into it, this is far from being crystal clear. None of the 2 business models there have proved to be successful yet:

- S-DMB (paying satellite solution from TU Media) has reached more than 1.25M cutomers mid 07 but losses are huge around 200M euros

- T-DMB (free terrestrial solution) has reached more than 7.5M customers (with only a big third of them on mobile phones) but advertising revenues on which the offer is based, had generated less than 2M $ in S1 2007.

There are many many other issues to be ironed out for mobile broadcasting TV to really take off. First of all, it should not really be opposed to unicast / VOD solutions as is often the case. Jupiter will soon publish a new survey on this topic so please get in touch if you want to participate or watch the space.

Thomas Husson | April 18, 2008, 07:25 AM
Are you smoking? No, just making a phone call

See this article in the IHT.

The mayor of Graz city in Austria is ordering commuters to keep their cellphones in silent mode while riding the citys public transport.

So, just imagine what a transatlantic flight would be if your neighbour was chatting all the time!

Indeed, there have been recent discussions about the opportunity to introduce voice calls in planes. At the end of day, consumers will decide. And they will probably go only for the data / sms connectivity.

Or will we see dedicated areas (such as smoking areas) for people urgently needing to make a phone call? Well, That's already a reality in trains between 2 compartments.

Isn't just a question of savoir-vivre? or do you need to pass a law?

Welcome to societal impacts of mobile phones - part 27...

Thomas Husson | April 16, 2008, 02:53 PM
Orange & Telia Sonera?

According to French daily Le Figaro, Orange is contemplating buying Telia Sonera.

TeliaSonera (merger of the 2 Swedish and Finnish incumbents) is still partly owned by the Nordic States (37.3% stake from the Swedish State and 13.7% from the Finnish State). Needless to say this would mainly be a complex financial story based on company valuations, management risks, incremental growth and potential synergies. The information has not been confirmed so it clearly is a rumor at this stage.

However, it it were to happen and from an industry perspective only, such an acquisition should be viewed in the context of a renewed consolidation wave which has never really stopped (see here). The difference here is that this is not only a Pan-European consolidation approach. Despite the fact that TeliaSonera is a clear leader in the Baltic countries and in Scandinavia (n2 in Norway), it is much more than that (see below). Out of the 103 mobile subscribers reported end 07, only 14M are from the Nordic/Baltic region. Like competitor Telenor, TeliaSonera is a truly international company with strong local brands (in Turkey via Turkcell and in Eurasia).

For Orange, this could be a major growth engine in developing countries. In a period where telcos are increasingly competing with Internet / media leaders and manufacturers, this would also be a way to leverage scale and scope and to be able to have a stronger negotiating power with the likes of Nokia and Google.

UPDATED: Apparently this information has been confirmed by the CFO to the FT, precising the discussions are at an early stage and that other options could be considered. It is however a clear sign that Orange is ready to make a significant investment.

- given TeliaSonera does neither fully owned Megafon in Russia (44% stake) nor Turkcell (37% stake), the turnover in emerging countries "only" represents slighty more than 10% of the total turnover. The group is still dependent on its core mature business in the Nordics, but the value clearly is in the complementary geographical coverage the combined group would have.

Thomas Husson | April 14, 2008, 03:06 PM
Grapevine

I received a couple of e-mails from contacts in the music industry saying our latest report on mobile music sounded a bit pessimistic. I then discovered a couple of headlines from selected blogs saying "mobile music does not interest anyone"...which was the translation of another blog "a majority of consumers not interested in mobile music"...
However the vast majority of people aren’t interested in most things, all the more if they have to pay for it. It does not prevent most stakeholders to include music as a key component in their strategies.

To undserstand where such a vague headline came from, I decided to go to the source of the information and read the report of my US colleague whose key finding simply states "Few subscribers are storing and listening to full-track songs on their cell phones. Music providers and carriers must offer a more attractive value proposition to drive greater adoption or risk staying on the fringe of the portable music business".

It seems to me innovation really comes from new business models today as stated by my colleague Mark Mulligan here.

I could say the same thing for most mobile services. As often in the mobile industry, the question is not if but when and how much? If I say mobile TV will not be mass market anytime soon (at least not before 3-5 years), people may consider you are pessimistic.
If you say, mobile TV is a niche market today, many people may look at you saying you are not taking into account "tremendous" successes in Japan, South Korea and Italy. But reality and facts are there in most European countries. If reported correctly by Reuters, even Nokia's spokespersons admit it.

The tricky question is thus: "how do you transition from a niche audience to an early majority and how to define realistic expectations?". How do you move from a supply-side economy to a one driven by consumer demand?

Thomas Husson | April 09, 2008, 05:46 PM
"Smart" pipes, "big fat" pipes & Citizen Kane

Tectonic shifts are happening in the mobile industry. New entrants and new approaches of existing stakeholders in the value chain are forcing operators to redefine their roles.

They were some interesting quotes reported in the press in the recent weeks made by the CEOs of 2 leading operators:

“…Carriers must not allow themselves to become bit pipes” - Arun Sarin - CEO of Vodafone

"We are not building freeways for Californian cars" ((november 07)and "I am not Citizen Kane" (les Echos) - Didier Lombard - CEO of France Telecom

In the latter case, to read between the lines, it means operators do not want to reduce their roles to being data pipes only and let Google & co do their business on the back of carriers. It also refers to fuel consumption (Californian cars vs small European cars such as a Smart...) that would imply bandwidth constraints and higher network costs. As my colleague Ian Fogg pointed out already a year ago, the net neutrality debate is finally taking place in Europe!

To maintain its strong positioning in the value chain, Orange is clearly investing the media space (but obviously not directly as a content producer, hence the reference to Citizen Kane). Orange Sport (203M euros invested in French football rights), Cinema (deals with Warner Bros & co) even though Orange only generated 400M euros in content revenues end 06.

This is clearly a mid to long term positioning and has been perceived as a war declaration by Canal + (see here and here). For now it would be risky to replicate such an approach elsewhere than France since the company needs a significant installed base of customers on all its platforms (PC, TV, mobile) to recoup such an investment.

Not all operators follow this route and some of them begin to admit they will become "smart" pipes, finally trying to leverage their assets and partnering with other players to become trusted enablers for their customers' day-to-day digital life styles. There are obviously different approaches and no one-size fits all answer.

However it seems a new era is opening up with the so-called co-opetition where the same companies can simultaneously be partners and competitors.

To know more about it, see the latest report published in European mobile: Mobile Content Value Chain: evaluating the impact of new entrants.

Thomas Husson | March 26, 2008, 05:11 PM
Mobile Internet

I have been skeptical at launch and ironic recently about the .mobi initiative.

My point is essentially that consumers should not even have to think about the url they are typing. It should be a smooth and direct experience. From a media / brand perspective, it makes sense to have only one single url to promote / advertise on all your docs.

Having said that, the market is still under construction and it is a good thing to have initiatives like this since they help to define guidelines that will guarantee a consistent user-experience, all the more as they are based on the same open standards recommended by the W3C's Mobile Web initiative. More than the number of registered domain names (close to 1M), the important metrics to look at are the number of live active .mobi websites (10% of the registered names) and even more interesting is the developer community around .mobi (10.000+ developers). At the end of day, it is more about providing tools to develop made-for-mobile websites. You'll find much more info here.

Anyway, I think the debate is not really a technical one. It is about providing the right info in a mobile context. What do your consumers want to have access to when they are on the move or when they browse on a tiny screen? Whatever the technology and even if in the case of an automatically-detected full mobile web browser, mobile Internet is likely to be different than Internet on your mobile.

We are only at a stage where barriers are being removed: compelling multimedia handsets, good browsers, mobile broadband networks and transparent / affordable tariffs. With a growing audience, media / content owners will understand the need to develop optimized mobile web sites. A virtuous cycle is starting with more users driving more innovation and more developments.

In the past 4 years, I have attended lots of conference where everybody was complaining about mobile data tariffs. No that "all you can eat" plans are available, it seems that the problem was solved overnight. This is still far from being the case.

I am curious to see if the speeches will be somehow different at the IIR mobile Internet conference next Tuesday in Berlin.

Thomas Husson | March 21, 2008, 11:47 AM
"State of the Telecom Union"

2 days ago, the EU commission published its 13th report on the state of the European Electronic Communications market. Definitely worth a read if you want to know the state of the Union and better understand the telecom competitive landscape in Europe.

On a different topic and as expected, The European Union chose last Monday the mobile TV standard DVB-H over other versions of the technology, saying governments are now required to promote it.

In the same time, Ofcom (the UK regulatory body) confirmed it is planning to auction radio spectrum in the 1452-1492 MHz band (the so-called “L Band") suitable for services including mobile TV, among others.

It is more costly to develop DVB-H in the L-band than in the UHF band, which is not available in the UK, hence the international harmonisation approach from Ofcom. The contradiction is quite obvious here (see below Ofcom's presentation from July 07).

Also, worth to be noted that many operators are still testing other technologies and that the decision was critized by the GSMA. Anyway, the L-band can also be used for other purposes such as satellite digital radio or broadband wireless access.

Thomas Husson | March 18, 2008, 07:47 AM
Hard Candy

7 tracks of Madonna’s new album will be distributed and promoted exclusively to Vodafone customers around the world*, 7 days prior to the April 28th global release of Madonna’s 11th studio album for Warner Bros. Records.

Those kind of partnerships between labels and operators are now more and more frequent. Bear in mind Orange/Warner partnership for Hung up / Confessions on a dance floor more than 2 years ago.

Interestingly, in its press release, Vodafone claims to be the number TWO digital music service provider overall in Europe (as pointed out by Mark Mulligan, they do not refer to being the n2 store but number 2 service provider, words matter in that context). In a recent post, I stated that Groove Mobile was the only independent music service provider. This is no longer the case, since the company has been bought by a subsidiary of NMS Communications, see the full press release here.

* UPDATED: excluding SFR (only partly-owned by Vodafone, but mainly by VIVENDI, the parent company of Universal Music)

Thomas Husson | March 17, 2008, 05:19 PM
Mobile 2.0

(For French readers only).

Christophe Romei, who edits servicesmobiles.fr, a good source of information on current mobile trends, is organizing the second edition of the mobile 2.0 conference, to which I will participate.

The conference will take place in Paris on April 8th and I really think it will be an interesting event. The detailled agenda is available here.

Thomas Husson | March 17, 2008, 04:55 PM
Back from Praha

I had the opportunity to speak at the mobile youth conference in Prague last week.

Last time I was in Praha was back in 1996. No doubt the city is really beautiful and nice walking around. It was already crowded at that time but now seems overcrowded with tourists. I spent some time in the operators' shops (interestingly the global players VODAFONE, T-MOBILE and TELEFONICA 02 are competing locally here and are now the 3 leading brands) and remember listening to a conversation in a Vodafone shop in the middle of Venceslas plazza (Vaclavske nam, THE street where Masaryk came back from exil in 1918, Nazi's and Soviet Union's invasions took place respectively in 1939 and 1968, where student Jan Palach committed suicide and where Vaclav Havel had his first speech to the Czech people in November 1989, for those who care about History).

Anyway, back to the Vodafone shop, there was a kid (around 10 I would say) who was trying to convince his mum to get his first mobile phone. I don't understand a word of the Czech language but it was obvious he knew quite a lot about the various devices and that his mum was totally lost. It sounded to me it was Christmas time for him. Would like to see him giving tips to his mum on how to use various features of her own device...

Thomas Husson | March 14, 2008, 06:33 AM
Napster Mobile

As my colleague Mark Mulligan just analyzed, 02 UK and Napster have announced today a partnership to launch a mobile music service. Single tracks will initially be priced at 99p (for a promotional period) or you can benefit from 5 tracks for £4.

O2 UK is not the first operator to launch the service in Europe. In 2006, sister company 02 Ireland or TMN in Portugal had launched it. In June 2007, Napster partnered with Swisscom (they must now have a few thousands customers paying 6 euros for 5 songs a month). In January 08, Telecom Italia Mobile announced such a partnership as well.

Interestingly, the service is always co-developped with Ericsson and promoted mainly with Sony Ericsson phones. Ericsson takes charge of the back end (systems integration, operation, maintenance and content management) while Napster is the consumer brand. It will be interesting to see how the Play Now initiative will be positioned alongside those offerings.

Subscription-model are gaining ground and it would not be a big surprise to see Rhapsody being launched by Real Networks in the coming months. As Mark Mulligan pointed out, online subscription models have had better traction in the US and even there are still quite niche. However, they begin to expand in the mobile space.

With the recent announcement that Microsoft would launch its Zune platform in 2009 (follwing Musiwave's acquisition) not to mention the opening of roughly 10 Nokia Music stores in 2008, big players are simply starting to position themselves. Who is independent nowadays: Groove Mobile?

Anyway, desite encouraging volumes of downloads (SFR, Telenor), mobile music is not a revenue generator: margins are too small. It is an interesting acquisition tool, brand enhancer and increasingly a loyalty mechanism to prevent churn for mobile operators. In this regard, 02 has always had a clear positioning towards music (e.g. O2 Millenium,...)

To put it simply, it is now a clear component of most operators' strategy.

Thomas Husson | March 12, 2008, 04:26 PM
"Litcast" ?!

This is the first time I come across this neologism.

A 'litcast' is a short story written especially for mobile phones.

"We are opening up new ways of distributing good literature," says Svein Henning Kirkeng, Division Director in Telenor.

According to Telenor, "The First Time I Died" is the first book (a crime novel) launched that has been exclusively produced for publishing on a mobile phone.

For the full PR, see here.

I had already heard of Mangas or Harlequin / Pink collections (being read in the tube by women who can discreetly read on their personal phones rather than having to show the book to their neighbours...), but they may not have specifically been produced for mobiles.

Anyway, the book industry is one of the few who is only at the very beginning of its digitalization process (in comparison to video or music), so I guess we'll see more and more of those news.

Thomas Husson | March 10, 2008, 03:46 PM
iPhone apps

Articles about the iPhone last month were mainly focusing on the 4M sales mark and the smuggling happening in some part of the world. Such a phenomenon can be explained by a couple of elements: the fact that the $ is at its weakest, that beyond o2 Ireland no new distribution agreement* was officially signed. It means than more than a year after having been announced, some consumers simply want to own the device. This always happen with strong brands and selective distribution models. No reason why the iPhone should be an exception.

With an installed base of more than 4M and the high usage of the early iPhone adopters, it makes sense for developpers to start creating dedicated applications. See Michael Gartenberg's first take here. After all, there are only 3 times more Blackberry devices. So as many have already observed the Exchange announcement is a direct threat to RIM.

Looking at consumers' applications, I find it interesting that the main game publishers announced dedicated games for the iPhone: 15 games for Gameloft (already a partner on iPods), EA ("spore" in Sept 08) and SEGA with Super Monkey Ball. The CEO of Glu Mobile is reported to have said in the press that the SDK was 100% right. But he also added that it would add complexity since it would be another platform to develop for. Making money in a fragmented market is always a challenge. The long term questions to which it is still difficult to answer are: can Apple continue not to embracing the mobile ecosystem (all apps to be distributed via Apple store or iTunes with 30% rev share for Apple, 70% for the developer and 0% for the operator) and when can developers / publishers expect a ROI when you compare that with much larger installed bases (Symbian phones,...)? Controlling the software distribution via iTunes is also a way for Apple to make sure smugglers won't benefit from the latest versions and applications.

Last but not least: BBC has made its iPlayer TV catch-up service available on iPhone. The service does not use the new SDK but is a streaming browser-based solution. Looks great and a very interesting concept. As my colleagues Nick Thomas and Mark Mulligan pointed out: then what’s left that you would want to pay for if you can watch free catch-up TV? Probably some more premium content categories such as sport.

* UPDATED: and T-Mobile Austria who launched the iPhone this week

Thomas Husson | March 06, 2008, 04:38 AM
"Human penetration"

I came across this strange expression in a Mobistar analyst presentation, mentionning that "human penetration" had reached 84% on the Belgian mobile market for 2007. This obviously refers to individual penetration (end-user owning a mobile phone) by opposition to SIM card penetration / connections.

At Jupiter, we value this approach since it is based on the end-user, the consumer and we did lots of modelling by looking at penetration among age groups, the only way to really assess market reality. Yes, operators are increasinly targeting digital youth and kids (as well as senior people) but there will always be a ceiling in adoption.

This also is defined by opposition to Machine to Machine (M2M) connections that begin to be reported in operators' KPIs. Still a very small percentage today but one that will make operators' figures even more complex moving forward.

Indeed the fact that most European countries are above the 100% penetration mark (SIM-based) is essentially driven by two facts:

- making the split between private and professional calls (a percentage that decreased between 06 and 07 according to Mobistar market research)

- benefiting from price advantages via several SIMs (increasing significantly according to the operator). You just need to look at the Italian market to understand that this trend is not really new but will impact the market (particularly when prepay and SIM-only penetration is high).

There are other reasons like on-net / family offerings and security issues but none of them seem to be a major driver.

When you look into details on how operators report their figures, it begins to be a mess:

- some operators split residential and business users, some others don't
- some operators include MVNO subs, some other don't
- some report active users on a 90 days basis, some others still on a 180 days basis
- definitions vary a lot, particularly for data connections and revenues

I am not a financial analyst so that's not really big deal even though I find it increasingly complex to follow business operations. One day or another, this lack of transparency and standard reporting metrics may well lead to some surprises.

Thomas Husson | February 27, 2008, 01:41 PM
Mobile Internet Tariffs

Not a single conference or mobile event I attended in the last 3 years without media companies or Internet players complaining about mobile data plans. No doubt that non affordable and non transparent data pricing schemes have been a key barrier (but not the only one) to the uptake of mobile services.

From web'n'walk (June 2005) to X-Series (November 2006) and SFR Illimythics (November 2007), innovative unlimited mobile Internet tariffs are gaining ground. According to a new survey we just published: "Consumer Mobile Internet; Marketing Unlimited Data to Unleash Use", early adopters subscribing to those tariff schemes are heavy users of not only mobile but also online services. Operators thus prefer to impose fair-use policies and restrict potentially cannibalizing applications to protect profitability. Nonetheless, they should adapt their marketing to ensure these engaged customers become ambassadors who will influence mainstream adoption. Looking at the differences between operators and the small caps (devil always hide into the details...) with the numerous restrictions, there are opportunities here to appear more friendly to early adopters.

Now that those "all you can eat" / unlimited plans are available, many claim mobile Internet will change dramatically. O2 UK recently reported that 60 percent of iPhone owners use more than 25 MB per month. An Orange France's marketing spokesperson recently told the press that average use of iPhone owners was around 110 MB per month. Very impressive figures indeed but not the panacea. One should bear in mind:

- few end-users have adopted those unlimited consumer Internet tariffs yet: 250K iPhone data plans for o2 Uk and 250K Illimythics for SFR in France as of early January, 92K for iPhone subs with Orange France end January.

- average usage even though high among early adopters is still well below the limits (500 MB for the iPhone plans). What will happen when adoption will be more mainstream?

- the walled-garden approach is not entirely over. Whatever they claim, operators are still promoting their own offerings. Even though they will probably be bypassed by direct to consumer approaches from Internet players and content providers, they will continue to try to leverage their role in the value chain (default audience for their own portals).

- not all operators have embraced this trend in Europe. In Belgium for example, Orange World is still priced at 6 euros / month for a "quasi-unlimited access" with 7.5 MB (?!!). But if you go over this "quasi-unlimited access", you have to pay 0.5 euros / session. And if you go over 1MB in this session, you will be charged 0.5 euros per incremental MB. For Proximus (market leader), off-portal browsing is charged 0.4158 euros for 5 minutes!

I remember asking once the head of strategic marketing of a major European operator what were the most innovative services he expected in the coming years. I expected an answer around location-based services, social networking, m-transport, m-health, whatever...

The answer was pretty direct and simple: "tariffs, tariffs and tariffs".

Thomas Husson | February 27, 2008, 01:35 PM
m.brandname.com

m.facebook.com
m.linkedin.com
m.yahoo.com...

.mobi, where are you?

Thomas Husson | February 20, 2008, 04:12 AM
zaOza - Vivendi Mobile Entertainment

As my colleague Mark Mulligan pointed out yesterday, Vivendi officially launched its new content portal zaoza.

In fact, the service was announced back in November (see here) and launched in beta under the name "magic zaoza". The idea was to create buzz among VIPs who could access the content for free and share it with up to 5 friends (DRM protected). This was a clever viral marketing approach targeted towards youth. Last year,in its "European Mo bile Youth Consumer Survey: Targeting digital natives and keeping them loyal", JupiterResearch clearly pointed out that a virtuous cycle between messaging and content should be implemented to augment the current niche of mobile entertainment aficionados (at 10 percent of the mobile population and 24 percent of ages 15 to 24) because these aficionados are also heavy communicators. To leverage the nature of a personal communications platform, stakeholders must mix content and messaging (e.g., launching community offerings with viral features and superdistribution business models). No doubt we will see more and more of those offerings, even if here there is no superdistribution BM (no use of OMA 2.0) but only a marketing tactic.

However, I was surprised by the fact that Vivendi heavily advertised the beta service with prime-time TV spots. They thus already managed to attract 110,000+ subscribers (who on average have downloaded circa 8 pieces of free content) and target 500,000 subscribers by the end of 2008. The key challenge here will be to establish the brand and to maintain loyalty via an effective CRM strategy.

Many in the press are referring to the Vizzavi story. There are however key differences in the sense that the group has learned from past mistakes, that the investment is much more limited (~10M euros for now), that the market is more mature and that other labels (EMI, Sony BMG and indie Because; Warner currently in discussion) have joined this 100% Vivendi project. This PC-mobile platform available via mobile phones through Gallery (a multi-operator kiosk) and soon via i-mode, via a direct url WAP address and via Internet is not only about music. For 3 euros / month, consumers can download ringtones, games (not only Vivendi Games content but also Eidos, THQ, I-play) and video. The interesting point is that consumers can keep the content downloaded even once the subscription ends. However, with such a low price point, there is obviously access to only a small catalogue of content referred to be "quasi-exclusive". It means there will be thousands of content pieces available with roughly 100 pieces renewed every day. However, there is a link to a Zaoza store where you can access the whole catalogue on a paid basis (no ad-funded BM).

Vivendi is trying to have a realistic approach: launching first in France where subscription-model for premium content have not really taken place (except via the i-mode business model) and where Universal Music has a very strong market share, and then replicate the model first in Germany (s2 2008) and then in the UK (early 2009) if successful.

The company will continue to have deals with operators, handset manufacturers (Nokia comes with music), innovative players (Omnifone) as well at its own license agreement with Bouygues Telecom (1M customers as of November 2007 !).

The key takeaway here is that Vivendi is going directly to consumers bypassing the traditional aggregators by establishing a trusted content brand. Gameloft just followed the same route recently. This highlight tectonic changes in the mobile content value chain. Jupiter will soon publish a report on this topic. Watch this space if you want to know more about it.

Thomas Husson | February 14, 2008, 03:49 AM
Back from Mobile World Congress

It is difficult to wrap up so many news but I tried to step back a little from the flow of information when flying back from Barcelona. After the 2007 takeaways, here below is my vision of the 2008 mobile mecca pilgrimage.

MWC is and will continue to be a technology show. The hottest tech topic this year was LTE versus Wimax. Lots of vendors form software and platform solutions are in Barcelona to demonstrate their innovative or carrier-grade solutions. Despite the mobile entertainment hall and the presence of Robert Redford, Isabella Rossellini and of many consumer brands, this is not likely to change. There are a couple of reasons for that: this is a fair trade congress not a consumer show, innovation is mainly led by technlogies and operators are still and for some time at the heart of the value chain.

Some very cool devices announced for next Autumn. Difficult to avoid the Samsung SOUL : HSDPA 7.2Mbps, 5MP, slim and the "completion" or even the "spirit" of the Ultra edition with a massive flagship campaign. Many other devices were announced since Samsung will invest significantly this year to increase its market share and n2 position (objective of 200M sales in 2008 versus 161M in 2007), maintaining its strong position in stylish and high-end devices but willing to expand in other categories (basic phones, infotainment, multimedia,...), geographical regions and form factors (bartypes).

Lots of discussions around the Xperia X1 device from Sony Ericsson based on Windows mobile. Many jumped into the conclusions that it reflected difficulties at Symbian. To my knowledge, SE is still a key shakeholder in Symbian (77M Symbian smartphones sold in 2007 alone, a 50% increase yoy by the way!) and the X1 is only one device. More importantly is the launch of the Xperia sub-brand itself alongside new devices launched in the Cyber-shot sub-brand (C702/ 902), Walkman sub-brand (W980, HSDPA, 8GB memory) or devices with a touchscreen interface (G700 / G900).

Motorola Z10 and E8 look also very promising and will be launched soon in Europe. LG KF600 and 700 as well.

I expected to see more HSUPA phones (not dongles) but none of the major handset manufacturers introduced one. Few prototypes of devices based on Android by the way, at least not presented by major handset manufacturers.

Nokia's competitors are all insisting they are not service companies and that they want to be partners for operators. It obviously did not prevent the market leader to announce amazing results (50M N-Series sold since launch among which 7M N95) and new devices: a new flagship device N96 (16GB, DVB-H, HSDPA, WiFi, 5MP,...!!!!), the N78, the Nokia 6210 Navigator (an optimized version of the GPS 6110 launched in 2007) or the 6220 Classic. However, it is clear that Nokia, as a market leader and in line with its new service strategy, insisted on its music, games and navigation services with the launch of Nokia MAPS 2.0.

I had a demo of Share on Ovi, the community service based on Twango. Pretty cool but it still is difficult to me to figure out how services will be intergrated under OVI from a brand perspective. Everybody at the show was referring to it, but I am sorry to say that beyond our small world, this brand does not exist at all in consumers' mind and still need to be created from scratch. This is a major challenge when you know the strength of the Nokia brand. One that will be tackled later in 2008...

Orange (very discreet presence this year, the company let its main booth to Chinese ZTE) has announced a MOU with Nokia but the company will launch its to-be-launched converged music store under its own brand! This agreement thus differ from those of Telefonica and Vodafone, who may still perceive Nokia as a threat but who have no interest in going against their main supplier nascent efforts.

The other key issue was the partnerships with Internet players. Nokia announced an agreement on new high-end devices with Google (they have other agreements with Yahoo!, Windows Live and local search providers) while T-Mobile dropped Google and finally ended the long-lasting industry rumor by selecting Yahoo! search solution. In the search space, Medio and Surfkitchen partnership is also an interesting deal while Jumptap was selected by TeliaSonera.

There were also a bunch of innovative services around mobile social networking sites and location-based services, not to mention Yahoo One Connect, which is an attempt to make the most of the social adress book. This inevitably led to discussions on the potential of mobile advertising. There were a couple of articles especially in the Financial Times or in the Wall Street Journal. Jupiter Research recently published a report about this topic forecasting Mobile Internet advertising (exclusively search and display net revenues) to reach 1.3 billion euros in Western Europe by 2012. The co-operation between UK operators in the most advanced digital ad European market is a very positive sign but I agree with my colleague Nate Elliott, that it will not have a significant impact in 2008/2009.

If you are a member of the press or a client willing to discuss recent announcements, please contact respectively PRESSEUROPE (at) JUPITERRESEARCH (DOT) COM or your client service manager.

Thomas Husson | February 12, 2008, 02:46 PM
Best Mobile Entertainment Services - Mobile World Congress

Yesterday evening, at the Gala dinner of the GSMA, the Global Mobile Awards were attributed. In the mobile entertainment category, the winners are highlighted in bold below among the other nominees in the shortlist:

1a - Best Mobile Game

Cellufun: Call of the Pharaoh
EA Mobile: BURNOUT
Fox Entertainment: Are You Smarter than a 5th Grader?
Glu Mobile: My Hangman
I-play: My Dog 2

1b - Best Mobile Music Service

AT&T Mobility: AT&T Mobile Music
Bharti Airtel: Airtel Live Music on Demand
Omnifone: MusicStation
PCCW Mobile HK: MOOV on mobile
Shazam Entertainment: Shazam iD

1c - Best Mobile Video Service

MTVN International: MTV Shorts
mywaves: mywaves
Sony Pictures Television International: Afterworld
Telstra Corporation: Mobile FOXTEL and BigPond TV on mobile
Vodafone D2: Bundesliga Live!

1d - Best Mobile Social Networking Service

BuzzCity: myGamma.com
Digital Chocolate: DChoc Café Games
Tiny Pictures Inc: Radar
Turkcell: Turkcell-im Benim
Vringo: Vringo

1e - Best Mobile Infotainment Portal for News/entertainment

AT&T Mobility: My Media Net
MTS: Kids WAP portal
PCCW Mobile HK: Mobile Infotainment Portal
Webwag: Webwag Mobile
Yahoo! Connected Life: Yahoo! Go for Mobile 2

I was honoured to participate as a judge among peers to the judging process. It does not mean at all I voted for all the winners, given this is a collective judgement. There were some very interesting players in the nominees and in the entrants and there are also plenty of compelling services as well as innovative start-ups at the show here that did not necessarily apply for the award.

The full list of winners in the other categories is available here.