Yesterday I blogged about Nokia’s launch of new Android handsets - an example of the chaotic business relationships in mobile. But probably the biggest news of the first day of Mobile World Congress (#mwc14) came from the WhatsApp founder – Ukranian-born Jan Koum – who announced that they would be moving into the voice market later this year following their acquisition by Mark Zuckerberg’s Facebook. And so the latest piece of the puzzle falls into place for Facebook’s mobile strategy, some would say it has been a chequered history so far but who seriously can predict what will happen in mobile? It feels from afar like there is a seismic shift in mobile not seen since the iPhone launch and mobile carriers are set to be hit yet again with loss of customer loyalties. The fact that Zuckerberg’s keynote (less of a presentation, more of a boring interview according to Lee Bell, a journalist at The Inquirer ) has created so much interest shows that the somewhat closeted Mobile World Congress may be trying to embrace Internet at last.
Mobile operators used to compete on pricing plans per minute, per message and then per Megabyte of data. Nowadays the majority of postpay users have unlimited messaging, virtually unlimited voice minutes and a reasonable chunk of data inclusive but there is very little take-up of “added-value” services of the carriers (when I say “unlimited”, it comes with a health warning as some tariffs claim “unlimited” yet some telcos have something in their consumer facing Tc & Cs about “reasonable use” giving themselves a right to apply extra charges that insulates them from abuse and overuse by consumers who insist on taking the mick).
The success of WhatsApp, like all great ideas, is its simplicity – message anyone anywhere using their mobile number as the identifier. No extortionate roaming SMS or data charges if you can get to a free WiFi hotspot then you can use the App. Mobile operators only have themselves and their greed to make money from travelling customers to blame for the rise of competitors like WhatsApp and SnapChat (which Facebook failed to buy). Their own efforts to launch VOIP-type Apps have failed mainly because of a lack of cross-network capabilities and poor execution and App quality. It almost makes you wonder if they are trying!
A few years ago I was talking to a “Product Owner” from a mobile carrier about one of their new data-centric services and he candidly told me “Well actually we don’t want the service to be TOO successful. We want users to be interested enough to buy a data plan but not to use their whole allowance as that would hit our capacity!” so it is no surprise really that operators have missed the boat. Some, like Chua Sock Koong, reckon carriers can avoid becoming bit-pipes for the more Internet-savvy companies but they will have to work together better. The obvious stumbling block is the most popular services need to work transparently across different communities of users just like good old SMS. Apple’s iMessage is fine if all your contacts have iPhone/iPad but that is becoming increasingly unlikely with the rise of Android and Windows-Phone 8 so the use of the MSISDN as identifier is still a key differentiator but with WhatsApp carriers have even lost control of that it seems.
The scene is set now for co-operations or battles between operators and service providers like never before. There is an interesting analogy with fast home broadband - the astronomic success of Netflix – which has led to rows with Verizon about the dominant hogging of bandwidth. The thing is, without innovations and seriously clever technologies behind services, the carriers would not be able to sell their bandwidth and expensive contract plans anyway so it really is a win-win if they can just get along.
In other MWC news, there’s talk of 5G services coming along in the mobile world and with the right services consumers will pay for the bandwidth to recoup the £billions invested I suppose. The other main story is an explosion in wearable devices (as mentioned by Martin Brazill in an earlier blog), with Samsung causing the most excitement in the MWC arena with their Gear, running on the Tizen operating system. The whole area of SmartWatches is one of the most interesting with applications needing to be developed especially the introduction of yet another mobile O/S may not be a barrier to developers wishing to come up with health-monitoring, remote controllers, etc. apps which will lessen the need to carry the phone with us on the early morning jog any more!
So back to Mark Zuckerberg. In his keynote he talked a lot about data compression and making Apps that were more efficient (citing WhatsApp as a prime example of a very efficient data consuming App) and he also talked in altruistic terms about internet.org and supporting Internet connectivity for the next 5 billion. Facebook is seeking partnerships with operators (“we’re looking for 3 or 5 partners” said Mr Z, [by which he meant
mobile telcos] to offer Facebook for free which some operators, such as Vodafone, have not been too sympathetic to support by zero-rating. But that said, where there is a commercial benefit then it could happen.
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