Highlights from the Mobile World Congress - Mobile Operators
Posted by Mark Newman
February 19th, 2008
Mobile Internet
Mobile Internet has now re-emerged as the ‘umbrella’ term for mobile operators’ strategy towards delivering non-voice, non-messaging services to the consumer market. Almost without exception mobile operators are claiming to embrace the open Internet but at the same time, they continue to strive to develop their own services in specific market segments.
The preferred model now appears to be a portal that allows customers to click straight into the open Internet but one which also contains direct links to operators’ own services. TeliaSonera, for example, demonstrated a toolbar on the top of its screen that guided people to its own preferred content (ie that content for which it derives revenues, be they paid-for services or ad-supported content). This approach becomes particularly complex when operators partner with other third party service/content aggregators.
Informa Telecoms & Media spoke to both Vodafone and Orange about their agreements with Nokia’s Ovi Internet services brand. Vodafone said that it was happy to promote similar types of service (eg music, navigation) from different providers (including Vodafone) and that it would leave the consumer to decide which one to choose. Orange said that a ‘win-win’ could be achieved with Ovi, even when they were promoting rival services, because under its deal advertising revenues from Ovi services would be shared by the two companies. Furthermore, Ovi operator partners have requested a direct click into their own services from the Ovi portal.
With regards the pricing for mobile Internet services, there now appears to be a consensus that flat-rate pricing is the way forward. Many operators believe that this is one of the key factors behind the success of the iPhone measured in terms of data usage.
Mobile broadband
Moving onto mobile broadband, operators continue to report strong mobile broadband growth. Their concern now is upgrading and improving different parts of their network. Whether or not mobile operators will be able to withstand the onslaught from P2P traffic and video is becoming a major concern for them. The need to upgrade backhaul networks has moved from a medium to a short-term priority with several operators now looking to deploy fibre to move traffic in urban hotspots.
Regulation
The overall mood of the mobile operator community was positive in Barcelona. This follows a strong set of financial results for the fourth quarter of 2007 and encouraging growth in mobile broadband and mobile data generally. However, one group of operators that are clearly not so happy about the status quo staged a major press event at the Mobile World Congress to highlight their collective unhappiness with mobile regulation in Europe. The ‘Mobile Challenger’ group of operators comprises those operators which are not part of one of the major operator groups in Europe. It includes Bouygues Telecom, 3 and E-Plus. They are unhappy with the current state of regulation in areas including number portability and mobile termination where they believe incumbent operators hold an unfair advantage.
Roaming regulation was also a topic of discussion among the mobile operator community. EU commissioner and mobile-operator persona non-grata Viviane Reding held an impromptu press conference at the event and reiterated the Commission’s determination for regulatory-led price cuts for SMS roaming at the end of this year if operators fail to act by then. Reding said that she was prepared to dictate the wholesale and retail prices operators charge for data roaming, as she did last year for voice roaming calls.
Operator groups have taken steps to reduce the price of data roaming – new initiatives were unveiled by the Challenger Group and T-Mobile to reduce wholesale and retail prices respectively, but there was no progress on SMS roaming. Clearly SMS roaming is such a lucrative business for mobile operators that it pains any of them to be the first to unilaterally reduce price levels when there is little evidence of price elasticity. Reding said that she will take stock of all data roaming prices July 1, a date she dramatically termed ‘the moment of truth’ for operators.
