Thursday, November 30, 2006

MVNOs://Replicating E-Plus' strategy in France

Maroc Telecom (owned 51% by Vivendi) will start a new service provider in France, targeting the African-French community. It looks like Mobisud will be an MVNO (instead of simply a subbrand of SFR).
Two observations:
  • Smart strategy, replicating E-Plus' (KPN) success in Germany with its Ay Yildiz subbrand for Turkish Germans.
  • A valid MVNO strategy, avoiding conflicts of interest by segmenting the market and using partner networks for cheap tariffs.

Wednesday, November 29, 2006

APPLICATIONS://Power to the edge

Top 10 lists are proliferating , especially as we near the end of the year. Mentioned in this WSJ article, as well as on, is SimulScribe: voice-to-text transfer to convert voicemail into text messages.

Also on is, another Google Maps mash-up. Check out your neighborhood by ZIP code - US only.

Tuesday, November 28, 2006

WIRELESS://Innovation v. net neutrality

Tying together (1) e-mail innovations to (2) wireless innovation in general and (3) net neutrality in the wireless space.
Wireless is about voice and SMS, but BB/internet/TV/etc. could be a nice add-on for those shiny 3G/4G networks. Demand will not be exploding (to say the least), so I believe operators are dumb trying to limit access (thus introducing the net neutrality issue to the wireless space).

Here goes my argument:

1. Berggi (10 $/mo) enables any phone to receive e-mail and IM. Now Presto and HP work to have e-mail and photos delivered to a printer - no need for a PC (also 10 $/mo). Niche apps, but nice.

2. Still, the wireless world shows quite a bit more inclination to innovation than the fixed world:
  • Advertising: opt-in in exchange for lower fees (Vodafone/Yahoo!) or have a free handset and free calls (Blyk; also Google's vision of the future).
  • MVNOs: I haven't given up on them, as long as there is a good deal in place (Nextel/Boost).
  • Homezones (FMS): Vodafone (At Home) and T-Mobile are expanding to many countries.
  • Other tariffing options: Family plans; free on-net calls; buckets; roll-over of unused minutes.
  • Dual-mode handsets and BB (FMC): most action is from Voda and TMO again.
  • Banking/payments: Rabobank is entering (on the Orange NL network). They have a solid reputation in fixed online banking - they may be able to make it work in the wireless space. Cingular has plans for 2007. Also, BouygTel is working with SNCF and RATP for train access in the Paris region.
  • Online access: MNOs are trying to hang on to their walled gardens, but social networking (Vodafone) and video sharing (Verizon/YouTube) are attracting interest. The big test is 3G UK's X-Series; I suppose the tariffing will be OK, but how about the fair use policy?!? If it is set not generously enough, users of the Sling TV service (place-shifted TV) will eat through their limit all too soon. Will Hutch be able to do the rebalancing act?

3. Unfortunately, the latter point introduces the net neutrality issue in the wireless world:

  • Google complains about operators trying to prevent downloads of Google Mobile Maps.
  • Nokia will launch P2P/VoIP blocking software next year.
  • Again, what will be the X-Series details from Hutch?

Monday, November 20, 2006

PORTAL BUSINESS://Yahoo! needs to follow Vodafone

Good news is finally happening at Yahoo!. The dramatic October 11 article in the New York Times, saved here, with hindsight pretty much marked the bottom for the stock. Even if Brad Garlinghouse goes out publicly with even more dirt, I believe it highlights potential upside more than it does downside. We are seeing a similiar move at Vodafone: get rid of non-core and overhead, but strenghthen existing operations.

So now we have one or two acquisitions in the Web 2.0 domain, a large scale alliance with seven newspaper groups and an internal memo, leaked Microsoft/Ray Ozzie style.

What could 'Focus the vision' really mean?
  • Exit payments and auctions (and ecommerce, comparison shopping) and partner with eBay, which partially has happened. Could Yahoo! Messenger (with Voice) be folded into Skype?
  • More generally, follow Jack Welch' 'fix, sell or close' in addition to Yahoo!'s own 'build, buy or partner' adage.
  • Sell the 40% Alibaba stake and the 30% Yahoo! Japan stake.
  • Exit certain other countries, presumably in Europe.
  • End any content production efforts. Get rid of Lloyd Braun.

My take on this is twofold:

  • I see no fundamental problem in acquiring non-overlapping entities, especially as in the case of, where its Mike Speiser is made VP for all community-oriented sites. The only problem would be that it could create too much overhead (see Vodafone's dissynergies after acquiring too many country operations). This makes Mr. Garlinghouse's job cutting proposal seem very plausible. At Q3, the TTM revenue per employee was $400k at Yahoo! and $678 at Google.
  • By not making acquisitions, Yahoo! risks losing market share, because the web is expanding much faster than any company can match from organic growth alone. Both Yahoo! Q3 and Google's acquisition of YouTube underscore this point.

Friday, November 17, 2006

WVOIP://Will Hutch 3G do the rebalancing act?

This great new 3G UK product, X-Series, contains lots of goodies: internet access, TV via Sling, PC-content via Orb (this post dates back to March 2005), IM through Yahoo!, Microsoft or Google, as well as Skype for VoIP (even if it technically isn't VoIP).

Possible snags: limited handset range, a fair use policy and most of all: pricing. Will 3G be able to do the rebalancing act?

Is this 3G's final assault of the market?
Is this the way for Skype to get its mojo back?

Wednesday, November 15, 2006

WVOIP://A matter of rebalancing

The main question concerning VoIP is: can it do to wireless operators what is will do to fixed operators?

Many will say yes, I suspect, referring to things like:

Of course, there are similarities between fixed and mobile VoIP:

  • VoIP needs an always-on BB connection (but not strictly, see KPN's Slim or VoxLib).
  • Traditional voice revenues are at risk.
  • VoIP delivers cost savings and potentially better voice quality.
  • Free on-net and cheap off-net calls.

I believe there are some major differences between the mobile and fixed worlds, even if they can be dealt with:

  • Wireless licenses and spectrum are scarce. Perhaps less so when analogue TV spectrum becomes available. Also, when operators like 3 and Xfera enter the market, not te mention WiMAX and xMax.
  • VoIP blocking: there is no net neutrality debate in wireless (yet). T-Mobile however backtracked.
  • People use their handset differently from how they use a PC. Demand for things like mobile internet and mobile TV is unproven/low. Downloading clients is more of a hassle. Not when they come pre-installed.
  • Fixed BB is cheap because of competition, most notably infrastructure-based competition. There is no such thing in the wireless space.

Continuing on the last point, it would be my understanding that mobile operators have a chance of defusing the wVoIP threat slowly. They can make an offer to their customers saying: ditch your voice bill and take this data subscription! As long as it is priced at around the present ARPU for voice (+ messaging) + data.

PTTs have done this before, when there was no such thing as BB: rebalancing tariffs away from per-minute charges and toward monthly bills. The differences between mobile and fixed makes it harder for them to rebalance the VoIP-threat away than it should be for wireless operators.

WEB SERVICES://Amazon, the virtual virtual store's latest quarterly sales were $2.3bn. Wal-Mart yesterday reported $84bn. The difference underscores the internet's ability to grow, much like Terry Semel this week stressed that the market still undervalues the internet as a vehicle for a different kind of inventory: advertsising.'s sales growth was over 24% and has been accelerating for the last four quarters. Few companies are able to show this kind of growth and manage to be declared #1 in Customer Service by the NRF.
All this is indicative of one import thing: the company's superior infrastructure (from technology to distribution and people). As has been commented on a lot - it has such quality and redundancy as to allow Amazon to supply open access.
Are you in need of computing power for your new virtual store (or any other kind of internet start-up)? Hire Amazon. Do you need cheap storage? Hire Amazon. Do you want your virtual store built? Hire Amazon. Do you want to outsource fulfillment? Hire Amazon.
What does all that mean to Amazon? Jeff Bezos has been clear about this - read the BusinessWeek Online. He's talking leverage and tapping a new revenue stream, however small it may yet be. The article also mentioned the blessing of building an ecosystem, an 'army of allies'.
But I see one more possibility, as others have hinted at before: splitting the company along the lines of structural separation in telecoms or utilities. That would make Amazon Web Services the absolute leader in infrastructure and a focussed high-margin play. Amazon Earth's Biggest Selection would be the first virtual virtual store, a clear high-volume business.
That in turn could settle the market's apparent incomprehension of Jeff Bezos' long-term vision.

Wednesday, November 08, 2006

POST-LLU COMPETITION://Telecom Italia commits to Holland

Telecom Italia, through its subsidiary bbned, is the first of the Dutch altnets to commit to infra-structure-based competition in the Netherlands.

KPN is building an All-IP NGN, effectively making LLU obsolete. Altnets now have a choice: go with KPN wholesale services or invest in the (even shorter) local loop through SLU at the street cabinet level. The OPTA regulatory body approved KPN's plans largely and called for comments through November 7. By late December it wants to publish final rulemakings.

Bbned targets a nationwide local network existing of FTTH (munifiber) and KPN wholesale or SLU services.

Implications of bbned's move:
  • Commitment of TI to the Netherlands, in spite of the market's size and competitiveness.
  • Bbned being involved in numerous munifiber projects effectively makes this a copy of sorts of Iliad/Free cooperating with the French (Paris) government. From a bandwidth point of view, this could even put bbned at the forefront.
  • It still remains to be seen what the other altnets decide to do (Tele2/Versatel, Orange/FT).
  • Resellers like Scarlet could join in. Or would anybody be interested in copying the Carphone Warehouse strategy?

Monday, November 06, 2006

WIRELESS SUBSTITUTION://Low mobile only rate in San Francisco

Telephia reported wireless substitution in the largest US cities. Remarkably, San Francisco has the lowest mobile-only rate at 5.5%. Telephia suggest it would be caused by poor coverage.
That supports the business case of running a mobile operator focusing on core competencies: voice, SMS, network and indoor coverage, voice quality etc.