O2 has denied the it’s dispute with Apple over stock shortages of the in-demand 3G iPhone.
While Apple stores have an abundant supply of the device, the O2 and Carphone Warehouse are suffering a lengthy wait for the second batch. The source said that O2 had been put on the back foot by Apple’s plan of launching the phone pre-date.
According to the latest developments are unlikely to have improved the relationship between the two companies.
An O2 spokesperson denied that the issue had caused resentment between the companies. However, the problems of low stock, and both O2 and Apple’s system hitches, haven’t failed to dampen demand for the 3G iPhone, which Apple claimed to have sold over one million in just three days after the launch.
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UK mobile customer base saw its first quaterly decline for two years in Q1 08, losing on 119k subscribers to finish the quarter on 70.67million. The net declines was seen with O2, T-Mobile, Virgin and Tesco suffering widespread losses. Tesco lost a maximum of 100k, Virgin lost 68k, T-Mobile 71k and O2 79k. The highest figures for net additions of 114k were achieved by Orange, Hutchison came next with 75k and Vodafone gained 41k. Similar subscriber loss was seen in the Q1 07, but Vodafone’s strong performance, 723k net additons, ensured a growth in the total customer base.
On an annual basis, the Q1 08 loss was counterbalanced by a potent net additions of 1.89 million in the Q4 07, leaving the annual growth at 5.0%, almost exactly the same rate as the preceding 12 months (4.9%). However, no consistency could be seen on the operator level, Virgin, after seeing a growth of 3.2% in the previous year, it was down by 0.9% to 4.42million. O2 recorded a gain in the subscribers on year-on-year basis, but it’s growth rate of 4.7% was less than half the last year’s figure of 10.2%. Tesco’s growth rate halved from 35.9% to 17.9%, taking quater-end customer base to 1.65million.
T-Mobile and Orange, on the other hand, improved strikingly on the 0.9% annual growth in the Q1 07 by both of them. T-Mobile grew to 10.24million, a growth of 4.2%, while Orange grew at 4.4% to 15.76million, but did not advance Vodafone’s lead gained in the Q1 07.
Vodafone, the most consistent performer in the market, edged it’s 6.9% growth rate up to 7.7%, finishing the quater 0.85 million ahead of Orange on 16.6million. O2 scored a 20.05 million subscribers to become the market leader with quater-end.
It was almost inevitable, given all the hype around Apple’s 3G iPhone launched in 22 countries last Friday, including Austria, Denmark, Finland, Germany and the UK.
In the UK, O2’s credit checking system crashed so that besieged Apple stores couldn’t connect to the O2 network.
This was a microcosm of the US launch, where customers couldn’t get their phones to work either due to software glitch and huge numbers of people had to stand in line for hours. A spokesman for AT&T, the exclusive carrier for the iPhone in the US, said there was a global problem with Apple’s iTunes servers that prevented the phones from being fully activated in the stores, as planned.
In the UK there were complaints that it took up to an hour to deal with each customer; carrying out credit checks manually led to huge queues building up. Having waited for several hours, it turned out that there weren’t enough 16Gb devices go round either.
Earlier in the week, O2’s website had collapsed under the weight of the interest shown in the new 3G iPhone. Carphone Warehouse, the other UK iPhone outlet didn’t get phones to many of its customers on Friday either, causing considerable fury.
Many of the problems in the UK were blamed on the convoluted procedures put in place in an attempt to stop users unlocking the device for use on the network of their choice an iPhone, forcing them to provide photographic ID.
Initial problems aside, there seems to be general satisfaction among users, despite the fact that you can’t send or receive MMS, that the camera hasn’t been upgraded (still no flash or zoom facility) and the grease-attracting composite back is less classy then the chrome back of the first generation.
Also, users can’t open the unit to insert a fresh battery, which would have been a boon, given that some reviewers claim the battery only lasts 4 hours or so using 3G.
Still it has got GPS and the new app store should do wonders for the download app market, even if it is stitched into iTunes very tightly and of a heavy American bias.
As The Inquirer commented, “Overall though, the device is still playing on its own within a crowded market - its heads and tails above the other miserable excuses for touch-screen phones.”
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Most operators selling the iPhone worldwide subsidise the gadget but in India the story is different. Airtel and Vodafone, the two operators who will selling the iphone in india will not be in a position to subsidise the iphone due to the fear of unlocking and likely flooding of counterfeit iPhones in the market.
As its well known that the latest 8-GB iPhone (Version 2.0) is being sold at $199 (Rs 8,000) and the 16-GB priced at $299 (Rs 11,960) by AT&T in the US,however this is not the scenario in India.The phone is given free by O2 in the UK, while T-Mobile prices it at a meagre 1 euro (Rs 67.92) in Germany. The 8-gb version of the gizmo is likely to be priced between Rs 16,000 and 18,000, while the 16-gb would cost around Rs 24,000 to Rs 28,000 in the country.This
price hike doen’t end here.It’s likely that the prices in india would also be higher by around $25-30 (Rs 1,000-1,200) as companies are expected to levy handling and other charges.
The secret behind the cheap pricing of handsets by AT&T, O2 and T-Mobile is that they are bundling iPhones with their services.This is not all as they have
accepted the fact that they are subsidising but its extent is not known.
As for Airtel and Vodafone, they are unlikely to subsidise them as bundling is not a “successful formula” in the country and penalty clauses are not strictly adhered to leading to lengthy court battles.Industry Sources have said that without subsides the iPhone would cost around $400, double the price offered by AT&T in the US.Bharti Airtel spokesperson said: “We have plans of bringing in the iPhone before the close of the year, though a specific launch date is yet to be announced. It is too premature to comment on pricing details.”
While Vodafone-Essar did not respond to queries, an Apple spokesperson based out of Singapore said: “Apple does not comment on speculation.”
It seems that the recent inflation in India has hit every aspect of our lives, even the most awaited iPhone.
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O2 has introduced its Home Broadband across the UK, following launch of the service in October 2007, with the aim of offering a high quality service to the market.
O2 said the Home Broadband Access service is available in homes throughout the UK, with BT’s wholesale network used to reach potential O2 Home and Business Broadband customers in areas where the local BT telephone exchange has not been unbundled.
The service offers free connection and wireless router, free UK-based 24/7 customer service and unlimited downloads.
In addition, O2 Business Broadband is available for small businesses, providing a cost effective, business grade package compatible with BT analog lines, offering speeds of up to 20Mbps.
It offers the benefits of the Home Broadband service along with five McAfee security licences, enhanced service support for businesses, a static IP address and dual SSID.
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Having failed in its obligation to achieve 80% population coverage of its 3G network by the start of the year, Ofcom has now confirmed that O2 UK has met the requirement, saving itself from the penalty of having its contract shortened by four months. The four other British 3G licence holders, H3G, Orange, T-Mobile and Vodafone, all met the original deadline.
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A report in French newspaper Les Echos claims that Orange France is preparing to cut the price it charges for an iPhone. The paper goes on to say that top officials from the French mobile operator have travelled to California to ask the handset maker what can be done about the stocks of unsold iPhones it is currently carrying, amid fresh industry rumours that a 3G version of the innovative device is soon to be on the way. Indeed, the Italian newspaper La Repubblica has claimed that the 3G iPhone is coming shortly to Telecom Italia without a revenue sharing deal and without long-term exclusivity. In the meantime, the French cellco could opt to subsidise the price of the iPhone – a move that has already been taken by O2 in the UK and T-Mobile Germany – although Orange France has denied all the rumours, saying that ‘everything is going well’ where the iPhone is concerned. Earlier this month, Orange France released sales figures for the iPhone, reporting that it had shipped just 96,000 units since launching the device in November.
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O2 UK has announced the launch of an HSDPA option for residential customers, making it the last of the British wireless network operators to launch the 3.5G mobile broadband offering. The high speed service is being offered to all existing customers for GBP20 (USD40) per month which includes 3GB of mobile data. O2 has offered mobile data cards to business customers for over a year, but this latest move sees it enter the burgeoning consumer ‘dongle’ market. Customers choosing to sign an 18-month contract will be given a dongle, a USD modem device, free of charge, while those preferring to pay the monthly charge on a rolling month-by-month basis will have spend GBP120. Mobile Broadband customers will also be given free access to 7,500 Wi-Fi hotspots on The Cloud network. Speeds of up to 1.8Mbps are currently available over the 3.5G infrastructure, although this will be upgraded to 3.6Mbps in June.
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Mobile operator to recruit more sales staff as it focuses on data services.
Vodafone it is to cut 20% of its U.K.-based management staff as part of a broader scheme to streamline its operations and boost mobile data sales.
The U.K. mobile operator announced on Tuesday that it will make a total of 450 redundancies at its Newbury headquarters as it seeks to simplify its operating model, but it will take on additional sales staff in other areas of the business.
A Vodafone spokeswoman told that the management cuts are all being made at middle management level.
“We want to re-focus our business on our customers rather than what we’re doing in the background,” she said.
At the same time, the operator is hiring more staff across its consumer and enterprise divisions in a bid to drive sales of its mobile data products.
“Vodafone UK is clearly focused on building on its market leading position in data products and services. Today we are announcing a series of targeted investments to meet growing demand in this area,” said Nick Read, CEO of Vodafone UK, in a statement.
Under the plan, Vodafone is creating 130 sales and services roles in its enterprise business, and hiring 330 employees to work in its retail stores advising on and selling data products.
“Customers need a greater understanding of what they can do with their phone – they’re not always aware of what it’s capable of,” said the spokeswoman.
She explained that by hiring extra retail staff Vodafone will be able to offer customers better in-store advice on its mobile data products.
“This is something we haven’t always been able to do when our stores have been busy,” she said.
Tuesday’s announcement is indicative of a wider reorganisation of Vodafone’s operations, according to Ovum senior analyst Steven Hartley.
“Vodafone is shifting emphasis away from centralised management, not just in the U.K., but at group level, and putting more personnel on the front line,” he said.
The mobile operator is also creating a further 30 roles to work on its online sales, customer services and e-billing operations, and building a new customer service centre that can host a further 850 employees.
Flat-rate data offer not on horizon
Vodafone declined to comment on Tuesday on whether its shift in focus to mobile data products is a forerunner to the adoption of unlimited flat-rate data plans, as a number of its rivals have done.
O2 unveiled a flat-rate data plan, albeit subject to a fair use policy, with Apple’s iPhone, and subsequently extended the tariff to all of its pay monthly of contracts, for example.
“I don’t think today’s announcement leads directly to un-metered access,” said Ovum’s Hartley.
“If you want to succeed in mobile data services then tariffs do need to be simpler… it’s one of the elements, but Vodafone is not likely to be that aggressive. They’re seeing mobile data growth at the moment without introducing unlimited data,” he said.
Indeed, in its fiscal third quarter Vodafone Group generated data revenues of £558 million up 42% from £368 million a year earlier.
Hartley warned that the introduction of flat-rate data in the ultra-competitive U.K. mobile market would be a risky move, since it would likely drive down data prices rapidly, leaving companies like Vodafone unable to offset declining voice revenues.
“Nobody wants to end up a bit pipe – no-one more so than Vodafone,” he added.
And CEO Arun Sarin is well aware of the risks. At last month’s Mobile World Congress he once again warned that mobile operators need to bring Internet services to life, or risk becoming bit pipe providers.
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Even as ads on cell phones become more common, advertisers are holding off on a full-blown embrace of the tiny screen as a marketing tool.
There’s no denying cell-phone users are seeing more ads. A Mar. 4 study by Nielsen found that 58 million U.S. wireless subscribers had viewed an ad on their cell phones in the past month. The problem is that advertisers don’t know what users are doing, if anything, when they see the ads. Until advertisers find out, they may hold off on committing more precious marketing dollars to the mobile medium. “Advertisers that are used to full accountability are left in the dark,” says Farhad Divecha, director at London-based ad agency AccuraCast.
The hesitance is understandable. In the online world, determining how well a campaign is performing is easy. Web sites embed tracking software known as “cookies” on your personal computer. Those cookies monitor your browsing activity and pass the information to advertisers and the ad-placement networks that distribute their ads across the Web.
A Consistent Yardstick
The wireless industry has refused to facilitate this tried-and-true approach. Most wireless service providers block cookies before they can ever get to cell phones, arguing that to allow them would open a hole in their networks for computer viruses. They also say they worry that a flood of new data traffic — cookies are programmed to report back to their masters — could degrade service quality by clogging wireless networks.
Complicating matters, what little data the wireless service providers do pass back to advertisers varies widely in terms of what they measure. Mobile-advertising networks, in turn, crunch the disparate data in different ways to gauge the audience response to ads.
One ad network might report the number of phones that received an ad, while another might report how many users actually viewed the ad. The distinction is subtle, but important for advertisers. Without a consistent yardstick, it’s hard to compare the results of a campaign that ran through Yahoo’s ad-placement business with one placed by a rival network such as AdMob.
Wait and See
In the end, ad agencies find themselves creating complex spreadsheets in a bid to reconcile the data from various campaigns. “They are doing more manual processing of data than strategic planning for their clients,” says Scott Ferris, a senior vice president at Microsoft,which has been testing software to help agencies compare mobile ad data from different sources.
Even Google, which is determined to extend its dominance in Web advertising to cell phones, has no reliable analytical tools customers can use to gauge the success of mobile marketing campaigns. “The mobile ad space is nascent, and we are currently working to figure out the best ad formats for our advertisers and users,” Google spokesperson Daniel Rubin wrote in an e-mail.
As a result of these obstacles, there are doubts whether the mobile advertising market will fulfill robust predictions, such as a Gartner forecast for US$11 billion in global ad revenue by 2011, up from less than $1 billion last year.
After all, ad metrics are crucial to creating cost-efficient campaigns. “We can then optimize campaigns on the fly,” says Benjamin Ezrick, a senior strategist at OgilvyInteractive. “If one [ad] network performs better than another, we can shift the budget,” he says. Likewise, if users don’t seem interested in a particular ad, it can be redesigned.
So for now, many advertisers are in wait-and-see mode. “At the moment, the level of transparency is not enough to drive significant budgets into this medium,” acknowledges Henry Stevens, director of media and entertainment at the GSM Association, a trade group that represents wireless service providers.
Measures of Success
In a bid to rectify the situation, the association announced in February that five of its most prominent members — Vodafone, Telefonica O2 Europe, T-Mobile International, FT/Orange Group and 3 — have formed a working group to define common metrics for mobile advertising. By year-end, these companies hope to develop a set of standard measures and then launch a trial in Britain. Using input from ad agencies and wireless carriers worldwide, the group will attempt to define everything from what constitutes a click to how to measure different kinds of user behavior. “The experimentation stage is almost over and, in order to scale, operators need to work together (to fix this problem),” Stevens says.
A separate effort launched by Nokia focuses on making it easier for ad agencies to compare the results of different ad campaigns. In February, the world’s largest cell phone maker rolled out Nokia Media Network worldwide. The network, which lets companies place ads on mobile media sites from Nokia and about 80 other content providers, allows advertisers to contrast the performance of their ads on the various sites. Advertisers can also see which types of ads, be they banners or text messages, are working best. “Our focus is very much on this analytics element,” says Mike Baker, vice president at Nokia Interactive.
Not surprisingly, mobile ad agencies see the urgency in delivering more reliable data to their clients. “We want to enable advertisers to understand value of ads more deeply,” says Jason Spero, vice president of marketing at AdMob. “We want to let them see where a user goes, which phones they use. Otherwise, you can’t engage with an audience.”
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O2 and Apple System’s dispute causes no harm to iPhone demand (UK)
