Wednesday, 23 September 2009

Still thinking handset-as-a-modem will be big? Think again.

I keep hearing arguments in favour of handset-as-a-modem as a major device form factor of choice but I remain sceptical, for six main reasons:

  1. Laptops will increasingly come with HSPA module as standard. So, where's the market for a peripheral device of any sort?
  2. Handset manufacturers are hardly likely to start pushing their device as a dumb modem. Sure, if you're committed enough to finding a way to use it as a modem, you will, but it's not mass market.
  3. It won't provide as good an experience. Handsets will lag modems in terms of transmission speed. Probably not a critical issue for most people, but relevant.
  4. It's in the interests of the MNO to sell 2 devices. Why sell an add-on when you can sell a whole new 18m contract or dedicated prepay device which has its own credit?
  5. People mostly don't go for devices that can do everything. Who needs a phone, blackberry, MP3 player AND camera when your phone can do it all? No-one. Who has actually gone the whole hog and dumped all those separates? No-one, pretty much.
  6. You can't share your phone. You can share your modem. There's no way I'd leave my phone at home for my other half to use when she's working from home, but I'm happy to do that with the broadband. OK, so you also can't share an embedded modem, but that's another issue entirely.

If you want to know more, see the following report I wrote a few months ago - Mobile broadband devices: from USB modems to where?

Tuesday, 22 September 2009

Thoughts from Informa's Mobile Pricing, Retention and Loyalty Conference

I'm co-chairing a breakfast briefing at the Informa Mobile Pricing, Retention and Loyalty Conference in Oxford tomorrow, so I came up for the second day today. A few interesting issues cropped up:
  • Dynamic tariffing - The idea of charging according to network loading is a logical one, particularly in price sensitive markets. It allows for a great segmentation of subscribers into those who are willing to pay (e.g. business users) who will make the call regardless of price, and those who aren't, who will wait for cheap prices when the network is less heavily loaded. This is also applicable to mobile broadband, allowing that differentiation of business and consumer users which is critical.
  • Bundling of fixed and mobile broadband is vital even in low DSL penetration markets. We heard from an operator in Turkey, where DSL penetration is relatively low and even there the focus of MBB is on bundling it with DSL and public WiFi, provided by partner networks.
  • If you're going ot indulge in a price war, do it via a secondary brand. This allows some differentiation, even if it's artificial and the service is broadly the same.
  • Attract the customers you want to retain. Most people have low utilisation. Those P2P file sharers who generate all the traffic have very high utilisation and compromise the potential profitability of mobile broadband. Therefore MNOs should avoid acquiring these customers. Try to get the peer-to-peer file sharer to go elsewhere. So don't be the cheapest.

Interesting stuff.

Monday, 21 September 2009

Free report on LTE from the UMTS Forum

Interesting new report published on the UMTS Forum looking at the LTE ecosystem. To be partisan for a moment, obviously it would have been miles better if it have been put together by Analysys Mason. Nevertheless Ovum make a reasonable fist of it.

Find it here.

For the definitive view on LTE evolution, see our report Operator strategies for network evolution: the road to LTE.

Monday, 14 September 2009

Ongoing thoughts on T-Mobile/Orange merger in the UK

I've obviously been giving some thought to the implications of the T-Mobile/Orange merger in the UK. I'll be posting a selection of thoughts over the course of the next few days.

As a first off, the thorny issue of competition will have to be resolved. EU and UK authorities will probably get involved. I think that at an EU level the merger doesn't represent anything new. Across EU markets an operator with 43% market share* is hardly unusual. Most markets have such a primate operator, although usually it's the former incumbent. For more analysis of this, see the piece I wrote for Analysys Mason: Orange–T-Mobile merger brings UK competition levels into line with other European markets. At the UK level, it could be that this becomes a political hot potato. There are quite a lot of job losses implicit in the merger plans. We're in a recession. There's going to be an election in the next 9 months. That could scupper the deal, or at least delay it until after May's poll.

*The T-Mo/OR press release claims 37% vs 27% for O2, but that's a little bit naughty. You can't exclude your MVNOs for your subs figures if you choose to include O2 and Vodafone's.

Monday, 7 September 2009

Orange buying T-Mobile UK, right now! Apparently.

The rumour from Broadband World Forum is that the reason Didier Lombard didn't give the keynote this afternoon is that he's signing the deal for Orange to buy T-Mobile UK. Very very interesting.

Thursday, 3 September 2009

Deutsche Telekom chief predicts consumer cloud computing

DT CEO Rene Obermann said a few interesting things in his address to Nokia World this week and not all of them will fit well with Nokia's strategy. Article on Total Telecom here.

Some of the predictions were relatively tame but there was also the kernel of a game-changing shift in the market too. Clearly it's no surprise that future growth must come from mobile internet and other data services as voice and SMS become commoditised. He also rightly points out that non-messaging data services are focused on access, which is itself commoditised. However, the intriguing element of his speech relates to how the operator can break that commoditisation: with consumer cloud computing. He pointed out that most people thought their phones were too complicated and needed to be simplified. He also opined that users will want to store less, not more, content on their devices, instead opting to store and manage content in the cloud.

The need for device simplification might not chime well with Nokia who, let's face it, develop some pretty complicated devices. However, there is an underlying logic in the concept. The mobile phone, more than any device, is designed to be connected. It therefore logically follows that content and applications will benefit from being network-based. More so than in the enterprise PC space, where cloud computing is going great guns.

Tuesday, 1 September 2009

eBay selling Skype

Looks like eBay is going to offload Skype to private equity firm Andreessen Horowitz, set up by Netscape co-founder Marc Andreessen. Price tag rumoured to be $2bn, compared to the $3.1 billion that eBay paid in 2005. Google had reportedly been interested but may have been put off at the prospect of going up against carriers that will stock Android devices. Bit of a potential conflict there.

I was always sceptical that eBay would ever gain any synergies from Skype. The whole "call the vendor" business model seemed unlikely. Most vendors don't want to take numerous calls about their sales. Messaging works fine. What's more, eBay were always onto a loser when the purchase of Skype didn't include the enabling technology.

3 launches MiFi

As reported on this blog a couple of weeks ago, 3 will be launching the MiFi router in time for Xmas. They've just announced the launch schedule and the pricing.

The device (the Huawei E5830) will be available through telesales channels on the 17th September and stores a day later.

Pricing will be as follows:
  • ‘Broadband 5GB 1 month’ - a rolling contract including 5GB of data for £15/month. The modem costs £69.99.
  • ‘Ready to Go’ - PAYG version for £99.99 including 3GB of data.
The pricing seems a little high to me compared to the current prices for USB modems which are as low as £20 on PAYG now. Persuading people to switch to MiFi, which does provide a better service than a USB modem (at least in my experience), will be difficult.

Full press release details here.