Ericsson forecasts flat mobile networks market in 2008 (Sweden)
Ericsson has given a cautious outlook for 2008, saying it expects a “flattish” mobile infrastructure market. The company reported fourth-quarter sales of SEK 54.5 billion, little changed from SEK 54.2 billion a year earlier. Operating profit fell to SEK 7.6 billion from SEK 12.2 billion a year ago, and net profit dropped to SEK 5.6 billion from SEK 9.7 billion. The Swedish company said it saw “significant margin erosion” in its networks business during the autumn. This was driven by a shift in sales mix favouring emerging markets with new network builds at lower margins, less spending on network upgrades and expansion in mature markets and the introduction of new technologies which also initially carry low margins. The company also witnessed a slowdown in the mobile market in the course of the year, with fourth-quarter sales affected by political unrest in certain areas. To meet the more difficult market conditions, Ericsson said it will intensify its focus on cost reductions this year. That includes plans to cut 1,000 jobs in Sweden, using voluntary redundancy as much a spossible. The main areas for cost reductions are SG&A, sourcing, supply and service delivery. Overall the company targets savings of SEK 4 billion by 2009, at a one-time cost of SEK 4 billion.
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iPhone Data Booms at T-Mobile
European carriers may not sell quite as many Apple Inc.iPhones as AT&T Inc., but there’s still a good reason to have them on the books, according to Ren© Obermann, CEO of Deutsche Telekom AG. He says the device is driving up average wireless data usage as much as 30 times higher than on other phones.
The CEO revealed the data figures this week as the German carrier revealed key metrics around its T-Mobile International AG cellular operations in Europe and the U.S. In Germany, T-Mobile has sold 70,000 iPhones with contracts.
These phones are helping to drive up mobile data use for the operator, Obermann says. “iPhone customers retrieve weather reports, stock prices, and YouTube videos from the Internet on the go — all as a matter of course.
“The average Internet usage for an iPhone customer is more than 100 MBytes. This is 30 times the use for our average contract-based consumer customers.”
Note that Obermann doesn’t specify if that is per month. Carriers, however, do generally measure users’ data consumption on a monthly basis.
The ability to watch TV and download video and music on a phone can dramatically increase the volume of data that a mobile user burns through anyway, notes Unstrung Insider senior analyst Gabriel Brown with a personal example: “I used 100 MBytes in an hour and a half listening to Internet radio on my phone the other day.”
Ramping up data usage rates is extremely important to Western European carriers since they need to replace voice revenues and find alternatives to text messaging, which is expected to reach saturation point over the next few years.
Heavy Reading senior analyst Patrick Donegan suggests that such potential data increases may also be a reason for wireless carriers to re-examine their backhaul capabilities in the near future.
“Datapoints like this suggest that many operators are still underestimating the impact that data is going to have on their backhaul networks,” says Donegan. “The ability to support these data volumes flexibly and cost effectively in the backhaul network is going to differentiate mobile carrier performance just as much as their ability to win over the end user market at the front end.”
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Google and Dell tipped to reveal iPhone rival plans (USA)
Speculation is mounting that Google is plotting the launch of a mobile phone in partnership with computer giant Dell.
Senior industry sources claim the two companies will reveal their plans at next month’s 3GSM telecoms conference in Barcelona, al-though Google insiders deny an announcement is due in the near future.
But the rumours will once again throw the spotlight on Google’s mobile strategy, which has been the subject of much conjecture over the last year.
There had been widespread talk of Google launching its own handset, known as the Gphoneâ€, to go up against Apple’s iPhone, which launched in November last year.
But the world’s largest search engine surprised the industry by announcing an operating system for mobile phones called Android. The software makes it easier for developers to create mobile applications that run on many different handsets.
Android, which will be available this year, will bring all of Google’s online services to mobile users.
At present, mobile phones use a variety of operating systems to access the internet, including systems from Microsoft and London-based Symbian.
Marketing Week revealed last year that Dell was also planning a move into mobile phones after poaching Motorola executive Ron Garriques to run its new global consumer group (MW March 1, 2007).
Dell already produces personal digital assistants (PDAs) and strategy analytics director Neil Mawston says: It makes sense for Dell to have a high-profile entry back into the market because its last effort with PDAs pretty much flopped.â€
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AT&T, Yahoo sign new advertising deal (USA)
AT&T Inc. entered into a new multi-state strategic advertising alliance with Yahoo Inc. that allows new advertising-based revenue opportunities for both companies, AT&T announced Tuesday.
Both companies will benefit from new search and display capabilities from either a mobile handset or a PC, according to a release. Features of the deal include: Yahoo will provide search and display advertising for AT&T consumers on mobile devices and the PC; a redesign of the att.net Web site, powered by Yahoo, beginning in the second quarter for new customers; and access to co-branded versions of Yahoo’s mobile Web properties and the Yahoo Go application for AT&T’s 14.2 million broadband customers.
Specific financial terms of the deal were not disclosed, but the agreement does call for revenue sharing. Yahoo will take a share of AT&T’s Internet subscriber fees by delivering ads to AT&T users on both their computers and phones.
Sunnyvale, Calif.-based Yahoo Inc. is a global Internet company.
San Antonio-based AT&T Inc. provides local and long-distance telephone and Internet service in Missouri and Illinois.
Wireless Mobile Telecom Wireless News Mobile Advertising
The State Of Mobile Ads: Too Much Complexity, Not Enough Usability
Mobile advertising is about a $2 billion business, but a number of obstacles remain: carriers’ issues, fragmentation, and ultimately, convincing marketers to do a mobile campaign. Cyriac Roeding, SVP, CBS (NYSE: CBS), expressed a good deal of frustration about the state of mobile ads during a mid-morning panel at the AlwaysOn Media NYC. He began by offering some bullet points detailing what media companies and agencies need to satisfy to move the ball along:
– Three rules: Roeding said advertisers need to know why they need another medium. If you can’t answer the question in 10 seconds, you should be out of the game, because without that medium, you’re lacking 18 hours a day.†But in order to turn that answer into a deal a media company needs to promise scale, massive page volumes. Offering his employer as an example, he claimed that CBS Sports had received 75 million mobile pageviews and 5 million uniques. The next step involves creating advertising opportunities that are unique to mobile. If you see a mobile ad as you would an online ad or TV spot, you will fail. You wouldn’t put TV on a newspaper. Mobile TV is a marketing term. Don’t think for a minute that consumers want a traditional TV experience on mobile.†Clear measurement is the last point. Mobile Marketing association is working with IO to compare the effectiveness of mobile, TV and online, so Roeding expects progress on that front.
– Too much complexity: Roeding got a round of applause as he became more animated about the state of mobile advertising: There’s too much complexity in carriers’ packages – there are 20 carriers, two download standards… Vcast offers mobile video as part of a $15 package on top of phone service – and then we all want to talk to advertisers and say ‘Try out mobile,
it’s really fun.’†His voice rose as he vented about usability and how the experiences of the PC cannot be transferred to the phone. Too many mobile sites ask you to scroll through the next 15 menu items. Do you really want to go down 15 items on a mobile site so that you get another 10 items to choose from? No, you don’t because by then, your lunch time is over.â€
Wireless Mobile Telecom Wireless News Mobile Advertising
Blyk wins funds for Netherlands plan (UK)
Blyk, a mobile phone operator that offers free calls to teenagers in exchange for sending them advertisements, is to expand into the Netherlands and has received funding from Goldman Sachs, the investment bank.
Goldman Sachs is the first heavyweight investor for the company, which has to date been backed by Sofinnova Partners, a French venture capital company, and a number of private individuals. The size of the investment was not disclosed. The Industrial and Financial Investments Company, a Kuwait-based fund, has also taken a stake.
The new investments give credibility to what has been seen as a highly experimental business model. Founded by a former Nokia executive, Blyk launched in the UK in September, offering a target market of 16 to 24-year-olds free phone calls and text messages in return for viewing up to six ads a day on their handsets.
Mobile phone companies across the world are experimenting with mobile advertising as a way to generate new revenues. Vodafone and T-Mobile, for example, have teamed up with Yahoo to sell advertising on their mobile internet pages. However, Blyk is one of very few mobile operators to rely almost totally on ad funding.
Analysts at Informa expect the market to be worth more than $11bn (£5.5bn) by 2011.
Earlier this week, the company revealed it was on track to reach 100,000 users in the UK by the end of September. It is thought to be signing up more than 2,000 new users each week. It said its average response rate to ad cam.
