Tuesday, October 30, 2007

Step back and ask who asked for this service

Yesterday we saw 3 carry on with its disruptive approach to the mobile market with the launch of the Skypephone. Others have written how this is just the thing needed to break the walled garden and the arrival of free phone calls.

Last night the Gadget Show on Channel 5 here in the UK had a comparison of the iPhone against the Nokia N95. Time and again the two presenters showed how the American designed phone lacked the power Europeans demand in its camera, texting and connection speeds. However everyone want to look at the Apple phone because it was attractive.

Both these features meant that I was grumpy by the time I went to sleep as once again they demonstrated just what is wrong with Mobile at the moment. We are too focused on the latest technology than making sure what we have works.

What we need to look at is just who is going to buy a new service, and when they do are they going to be happy with the quality and price.

Taking the use of Skype, if I use it it is not because it is free it is because I know that I get to talk with someone rather than voicemail. Email no longer works with many of my contacts as they have a vast backlog of unread messages that means that too often the response comes too late. I use texts to set up a call with a few people because they are not on Skype. With Skype I check availability and then call on my mobile or landline because my monthly fee has a large call allowance which most months I do not fully use.

The free calls that 3 are promoting are on net Skype to Skype calls. This means that they in fact a closed community, if you want to call an real number then you are charge for it. Thus waht you have is a service that 3 hope will stimulate more calls terminating on its network in the same way that they were paying those onPAYG to receive calls. I do not think that the service is mass market and I do not think that its disruptive. I can see a few early adopters carrying a second or third handset to play with the service.

If rumours are to be believed this month Google will finally lift its skirts and show us what it has got in the way of a mobile phone service. Once again a few will say that they have seen the light and that the Internet has once again showed the dumb operators that open is best. What they might need to look at is the architecture models currently running in the networks that seeCAPEX cycles triggered when capacity hits 70% this is far lower than in the fixed world. This fact means that we have owners of the assets looking to manage traffic far more than those in the fixed world.

I know that this post is not well argued but then I am angry that once again hype has trumped logic. Use the comment box to ask a question or point out why I am wrong and I will respond in a more structured manner.

1 comment:

Nirvanesque said...

Are you looking towards Google as someone trying to break the monotony (or monopoly) of the existing market structure in mobile? (your this & Nov 5 posting)

Can we consider Google as a "small-time" newcomer. Its share price is around US$480, which translates to a market capitalisation of around US$150Bn!! Add to that the way Google is recently throwing its weight around, on both sides of the Atlantic:
- In July 2007, Google said it would up the reserve price of US$4.6Bn for the FCC C-Block spectrum if it can get access at wholesale rates (for incumbents) - and most-probably it will get it.
- In Sept 2007, back here in Paris, Google announced its acquisition of YouTube for a staggering US$1.65Bn! Such an acquisition would directly imply that tomorrow, if it wanted, Google could piggyback cable & IPTV operator investments to offer its own Hi-Q video download & search services (Perhaps it would come out with its own set-top box - call it Googlebox, for this purpose).

I am not a Google critic. Nevertheless, I believe, that in this regard, Google would be doing a similar strategy in the 3G multimedia space. So whatever, it means, Googlephone can turn out to be a major threat for operators of the likes of O2 or 3.

I am not pointing out why you are wrong, but I am very interested to know your "response in a structured manner".