Economist view on MWC09

This weeks Economist has a review of the transformation of the mobile industry following Mobile World Congress. It points out the unlike other industries at present Mobile is in good health in terms of sales.

In telling us that we are at in inflection point with the transition of handsets into smartphones. Whilst this sector has grown over the last few years to be a key element I do not see that many consumers are looking for a single device. Talking to my daughters about what "upgrade" they want it is not about an iPhone or Blackberry for these teenagers but rather an exceptional camera that will also playback MP3s. Many have two handsets and whilst the Smartphone is the device that they are happy to show in public the "other" handset is the one that does most of the phone calls.

As the economy starts to slow further we will see Network Operators look more at the dead money spent on Subscriber Acquisition/Retention Costs. Why would a Network give out a £250+ handset if it is used as a second device and so the usage is lower than expected?

As money starts to be counted by the Consumer will we see Contracts downsized the current bundles are perceived as over priced rather than good value. This being the case we are seeing more PAYG sims becoming dormant whilst contract numbers stay strong thanks to the introduction of SIM only. The risk is that the Networks will become more intelligent and will take the opportunity to "lose" subscribers that are not profitable.

A presentation last year from NSN showed that on a number of European Networks over 60% of the subscribers were loss making. Will this downturn mean that the Operators with the best processes take the opportunity to decide that they do not seek to be mass market but rather premium supplier? If they decide that this is the best source of action then they could look at the PC market and say that the approach of Apple & Sony is far better than Dell & HP.

Photo is the Nokia E75 taken by me at MWC09.

Economist says that 2008 might be the year for m-payments

I picked up the 2008 edition of the Economist's magazine The World in... and one of the features in the business sector was Buying and celling by Tom Standage which looked at how NFC will start to gain traction.

One of the data points that gained my attention was a graphic that shows that only in the US the population has more access to cash machines than mobile phone.

I still think that mobile payments face a challenge in the UK and US where we are too reliant on credit cards rather than bank cards. For M-Payments to work they have to be a replacement of paper and coin based payment rather than an alternative to electronic fund transfers. If mobile networks start to try and compete with Banks then the Banks are going to ask that they are regulated in the same manner. However if the networks can replace micropayments of a value of less than say $20 then we can look to a rosy future.

I think that the introduction of M-Payments will also reap benefits for customer retention, the Networks will seek to establish a stronger relationship with its customers which will see them move from PAYG to Contract. Once the mobile phone has more functionality than just talk and text consumers will be less price sensitive. The functionality will not in my view be the Internet it has to be something more than just a window.

Some interesting data points

Technology Guardian has an opinion piece by Victor Keegan that highlights some interesting data about the Mobile Internet. He outlines that the reason that the mobile web is more important than the fixed one is that it comes with its own built in payment mechanism. It is this fact that means that the Crazy Frog made more money than all of iTunes in 2006.

The problem is that the cost of transit is a key element of the $31Bn revenues and just like the net did not take off until broadband and unlimited the lack of unlimited net access is holding back development. Whilst I agree that this may be true, I also contend just how many Mobile Users ask for a data package; if you get to see the internal numbers for some of the networks the fact that they have added millions of new accounts in the last year is not reflected in how many of those have taken a data account to go with it. I still contend that most people want a phone just to send texts and make calls. If it was a price issue then those in the mobile networks could fix it by opening the mobile web, know that unlikely the fixed operators they would still make money thanks to their control of the payments platform.

Today's Economist has a feature about the rise of the ebook on your mobile in Japan, the print edition shows a row of women reading the screens of their mobile phones. The market has sprung up over the last five years to the point that it is now worth $82m a year and is still growing fast. Whilst the use of Mobile Data in the Far East is important I have learnt that the fact that using your mobile to make a call on in public is not something that is seen as polite, a large number of the public commute for over three hours a day and that the housing situation means that denisity levels are close to a battery farm all mean that shaping a business on what happens in Japen or Korea is a very high risk.

Keith has what I consider to be the best comment on the populist nature of the EU war on Roaming Rip Offs. I guess as a Business User on a Contract the fact that most of my calls last over 2 minutes and that I travel alot mean that the EU think that I am using a service such as Awayphone!