European Mobile Forecast, 2008-2013 - Part 2

I spoke yesterday at IIR Converged Messaging Conference in Munich.

Once again, it was quite challenging & interesting to play the devil's advocate in front of an operator-centric audience. My first message was to bring a bad news: SMS cash cow is and will continue to be threatened by declining prices. I had some feedback with people saying volumes continue to increase. Looking at SMS volumes in the UK or in Portugal, it would be difficult to disagree with this fact. However, increase in volumes will not compensate for the decline in average prices. The vast majority of the traffic is concentrated among heavy young users and once they have viewed SMS as a commodity, why would they pay for other services? At the end of the day, for the younder generation, it will probably be a data / Internet package with different services bundled such as social networking, IM or communication with presence / location to stay in touch with your community of friends / relatives.

There were lots of discussion about MMS, e-mail and mobile IM with the long hope to be able to offer a seamless and transparent solution for end-users that would meet all their communication needs whatever the bearer. But at the end of the day, this is about controlling the social address book and operators are not necessarily the only ones fighting for this and the best placed to deliver a compelling user-experience. A good sign is Nokia's acquisition of OZ announced yesterday. Some operators however are embracing the trend and offering very interesting solutions such as the Vodafone Connect To Friends' Facebook plug-in.

French telecom dynamics

I did not take the time to comment some of the recent news on the French Telecom market, so here's a wrap up:

- Arcep published its recommendation (available here in French) to the French government of how to best allocate spectrum: 10-15 Mhz to be quickly allocated to a new entrant. Iliad (Free, one the leading ISPs) is by far the most credible new entrant despite some interest from Kertel, Bollore Telecom and Inquam Broadband. The government decided not to decide and to launch a debate in Parliament before final decision to be made in l'Elysee...A tricky political choice between a consumer-friendly approach (enabling Free to reduce prices) and operators' efficient lobbying.

- Arcep also recently calculated new long-term termination rates between 0.01 and 0.02 €/min versus 0.065 € currently. At this stage, there are no indications of when those tariffs could be implemented, but this is bad news for operators. Also, it means tariff differences when calling from a fixed line will vanish and make it all the more interesting to launch multi-play offerings.

- MVNOs still facing hurdles here with less than 5% market share. Virgin Mobile is the leading player with 900k customers reached during August 2008 (100k with sister company Breizh Mobile) and confirmed its target of 2M to be reached in 2010. Wholesale tariffs and market conditions are simply not enough attractive. Bouygues recently decided to host KPN as a MVNO. After Numericable, this decision was viewed by some skeptical players as a way to be perceived as more open to avoid a 4th 3G player. In my opinion, both issues are not and should not necessarily be opposed.

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XOHM WiMAX Launches in Baltimore; Will a New Type of Cord-Cutter Emerge?

The focus here is on wireless Internet access, but home service is offered too. Here are the breakdowns:

Home: $25 per month for six months, $35 thereafter. Twenty-five dollars is a steal, and even $35 is pretty aggressive, particularly for a standalone service (that is, not bundled with voice like DSL or TV like cable modem service). Must purchase a (Krups-inspired) WiMAX modem for $80.

On-the-Go: $30 per month for six months, $45 thereafter. Must purchase a data card, or forthcoming WiMAX-enabled laptop or other device.

Daily On-the-Go: $10 per day, for use with WiMAX data card, laptop or device.

Pick 2: $50 for six months, $65 thereafter. Connect two WiMAX devices, which could include the WiMAX modem for home use and a data card for mobile use. This of course raises the question as to how strong the WiMAX signal is indoors, such that a separate WiMAX modem would be necessary if you activated a data card.

XOHM calls itself "a wireless alternative to basic DSL and Cable internet service," offering download speeds of between 2 and 4 Mbps, and upload speeds of .5 to 1.5 Mbps, yet performance and coverage are not guaranteed. Compared with other mobile data services, that's pretty quick, yet those speeds are pretty utilitarian when considered as a fixed broadband substitute, particularly as BSPs have been upgrading their networks to deliver ever-faster broadband speeds.

Still, some may find the value of mobility to trump the quality. Think of the millions of wireless-only consumers out there who have dumped landlines in favor of exclusive cell phone use, despite the comparatively horrendous quality. For cord cutters, a fixed landline offers poor value because it is, um, fixed, whereas a cell phone can be used at home and away. The same principle could apply for a WiMAX connection, depending on the coverage issue.

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I Am (Now) a Twit

The great Twitter experiment begins. 18 months late, according to most. Whatever, follow me at davidcard.

2 million users, a good third of whom appear to be in the IT industry or its related crumb-gatherers. Sigh. Don't worry, I'll still blog. I know what reach means. And we'll probably even have comments under the new regime!

Why Apple Might Never Want to have 'Norwegian Wood' Available on iTunes

Apple's somewhat forgotten Nordic odyssey recommences with the Norwegian consumer ombudsman to run a "test case" which could compel Apple to open up its DRM to enable purchased tracks to play on non-iPod devices. Regular readers may recall my skepticism of this approach.

Consumer Ombudsman Bjoern Erik Thon was quoted on AP as saying:

"It's a consumer's right to transfer and play digital content bought and downloaded from the Internet to the music device he himself chooses to use. iTunes makes this impossible or at least difficult, and hence, they act in breach of Norwegian law,"

The flaws in this stance are numerous.

- Why aren't Sony, Nintendo and Microsoft up for charges also? Last time I checked you couldn't play PS3 games on a Wii or Wii games on an xBox
- Why aren't Dell, Toshiba etc up for charges? Last time I checked PC games didn't work on Macs
- Why can't most of the downloads on the forthcoming Telenor PlayNow plus service play on iPods?
- I could go on.

In short, interoperability is not an Apple-only story and indeed it's becoming more widespread now with the advent of the next generation of music services (CWM, PNp, Musique Max etc) which all use DRM to differentiate. In fact Apple is doing its best to move towards DRM-free.the problem is the majority of the majors aren't letting them get there just yet. Perhaps there's a little sub plot playing UMG et al are holding on for Apple to lose a Nordic ruling before licensing DRM-free catalogue to them?!

It's the TFE Economy, Stupid

While Congress was debating the $700 billion bailout this weekend, we at Jupiter Research were hard at working preparing our latest report: Television and Filmed Entertainment Spending: Understanding Consumer Behavior in Challenging Economic Times.

In the report, we dive into which customer segments are most likely to cut back on each type of TFE spending (movies, broadband subscription, DVRS, etc). Hope you will find the report timely and useful. As always, please do reach out if we can answer further questions in inquiry on the report.

Bloggers' Dinner in Tokyo - Oct 22, 2008 (Wed)

Jeremiahowyang_5My colleague, Jeremiah Owyang is coming to Japan so we're going to have an informal, no-host bloggers' dinner on Wednesday, October 22nd in Tokyo.

Jeremiah is a senior analyst at Forrester Research. He helps interactive marketers get to grips with Social computing, Social media measurement, Web marketing, and Interactive marketing. He also writes an excellent blog of his own - Web Strategy by Jeremiah.

Our plan for the evening is that Jeremiah will talk for about 20 minutes to share some insights on trends in social computing. And then we hope to have a stimulating discussion on any topics that interest us -- in other words, all things social. No sales pitches allowed!

If you want to attend, please contact Ritsuko Tague at rtague@forrester.com with your name, company name, email address and the URL of your blog by October 3rd.

<Bloggers' Dinner in Tokyo>

Date & Time :  Wednesday, October 22nd,  19:00-21:00

Location:  FUJIMAMAS, 6-3-2 Jingumae, Shibuya-ku, Tokyo    MAP

Tel: 03.5485.2283

Cost:  4,000JPY - includes an Asian Tapas buffet and free bar (nomihodai).

Attendees: 20-25 bloggers

Agenda:

19:00-19:20 Jeremiah's welcome speech

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It's the Conversation, Stupid!

Timely_relevent_in_context_cube Why are sales and marketing professionals working harder and longer than ever before? Why are they seemingly in a constant firefighting mode, moving from one fire drill to the next, one meeting to another?

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The Death of Muxtape: Does the RIAA Have the Same Interests as the Major Labels?

Fascinating account from the founder of Muxtupe of his failed attempt to legitimize the playlist service. Apart from the priceless insight into the different approaches of UMG (forward looking, innovative) and EMI (threatening and forceful) the most interesting aspect is seeing how the RIAA acted independently of the majors (i.e. its paymasters) and even counter to their actions. Whilst involved negotiations were advancing between Muxtape and EMI and UMG, the RIAA ordered that Muxtape be taken down for infringement and were oblivious to the license negotiations. In the end the site went down and now will not resurface other than as a tool for artists. So one of the "post-social music" sites that was creating so much buzz (along with Blip.FM and Hype Machine) disappeared and was denied a major-supported legal future due to the trigger happy RIAA. Of course this is just one side of the story, so I'll keep my eye out for the labels' side of things. Heck I'll even keep an eye out for the RIAA's side of the story.

BIMA Event Yields Some Exceptional IM Examples

I'm just back from the Fourth Annual Cross Media Forum put on by BIMA, the Boston Interactive Media Association, a MITX organization.  I thought the depth of content from the event was exceptional.  It included:

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