Celebrating 1000 Pearls: Real Services Making Money on Mobile
I was invited to deliver a presentation on the future of mobile services for the 3G LTE (Long Term Evolution) conference in London last week. As a wonderful coincidence, that conference marked the unveiling of my 1,000th Pearl. My Pearls are real mobile services, making money somewhere, each described on one Powerpoint Slide. I use the Pearls to illustrate various theories and concepts in the business of mobile telecoms, as well as the human sides of what becomes popular. From the very first Pearl shown in Vienna in September 2000, to this, my 1000th Pearl shown in London, I’ve averaged 164 Pearls per year, or almost 14 new Pearls every month. I think this is a good point to stop and take stock and remember.
It all started in June 2000. I was heading the 3G Business Consultancy Department for Nokia. We had a lot of network engineering consulting skill, and of business modelling skill amongst my consultants. But I felt that our stories were too dry. I wanted us to “spice up” the stories. To make them more “real” and relevant to the audience. I asked my department to collect real, live, commerically launched mobile services for all in the department to use in our various presentations and business modelling workshops.
By the time I left Nokia 1 October 2001, I had shown 154 Pearls in my various Nokia presentations to public audiences at conferences worldwide. Something big had started. Those first Pearls were collected by members of my department, a group effort, and unfortunately I did not record who found what, so I only am able to recall a few of the actual consultants who discovered them. Since I left Nokia, the next 846 Pearls were all discovered by me alone. But lets start from the beginning.
Started with Ringing Tone Chart
The first Pearl shown in public was the world’s first Ringing Tone chart – a weekly Top 5 at the time, on a radio station in Finland. That Pearl was first shown in Vienna in September 2000. What almost all laughed at, and thought was only a silly Finnish idea – is now a mainstay of the music recording industry and for example in Britain ringing tones are permanently calculated into the music sales charts. How wrong we were. Ringing tones kept on surprising all experts, and by 2005 generated 5.1 billion dollars worth of worldwide sales, 12 times more than iTunes. I am pretty sure this “first Pearl” was actually discovered by Merja Kaarre, one of Nokia’s most senior 3G consultants, who was very good at spotting them.
At that same conference in Vienna, I also showed a Pearl on the world’s first advertising-sponsored free mobile news service. Funny that we’ve had advertising almost as long as ringing tones, and mobile advertising is worth much less than a billion dollars while ringing tones are worth five. You’d have thought it was the other way round.
Tomi and his Dating Services
The two favourite Pearls from 2000 were definitely the “Pickup at the Traffic Light” and the “Attraction Server”. The Traffic Light idea was this. In Finland all car owners are in a public record, based on their car license plate number. That service was automated for SMS queries in 2000. So you could sit in a traffic light, see a pretty woman stopped next to you. Look at the license plate number of her car, send that via SMS to the licence bureau, and receive the name of the owner of the car. Check that it is a woman’s name – you don’t want to accidentially flirt with the husband – and then send that name to the phone number directory inquiries, still via SMS. You would receive the phone number of the girl in the car next to you! Then put on your best charm and send her that romantic text message…
A funny story that I enjoyed telling. But a more bizarre follow-up came from a trip to Singapore in 2004. The local newspaper, Straits Times, reported on a similar service about to launch in Asia, by an UK based provider, SMS Messaging Link. This required car owners to register their cars for the service, after which drivers could send text messages by typing in the license plate number. Cool. The newspaper said that in the UK they had tens of thousands of cars signed up for this kind of service – where the owner of the car registered his/her car license for short code SMS messaging, and that they generated over a million SMS text messages per month. You never know!
And the most favoured Pearl from 2000 and into 2001 was the Attraction Server. This was my first “Top Hit” that was actually requested by members in my audiences. The Attraction Server is a simple dating service. I need to have the number of the girl I’m attracted to. I don’t send her a message directly, rather I send a message with her phone number to the Attraction Server. She gets an anonymous message saying “a man is in love with you. If you would like to know if that is the man you are also in love with, send the mobile phone number of the man you love to our server and we’ll arrange the match”. If that was me, we’d get the match. But if she’s in love with another man – then that other man would get a message that “someone is in love with you…” The ultimate chain mail message.
In 2000 our department discovered many more fascinating Pearls. One – the payment of parking by SMS text messages in Norway – generated years of follow-ups as ever more sophisticated solutions were rolled out from Croatia to Austria to Finland, the UK, and back to Norway, and now to South Korea where they are designing intelligent parking places to guide drivers to the nearest place. I faced arguments in some Scandinavian conferences on whether the mobile parking solution was actually invented in Norway, or in Sweden, or by a Finnish company trialing it in Sweden, etc.
But the funniest story around the Mobile Parking Pearl was in Singapore in 2004. I ran a full-day mobile service creation workshop for the IDA and the wireless services industry for the region, and I ended my morning session with my “best success story” and a longer case study around that Pearl of the mobile parking with remarkably successful usage stats from Croatia to Estonia. After I finished one person lifted his hand and asked what I thought of the Singapore mobile parking trial. He told me that as of that very morning the Singapore mobile parking service had shut down. Talk about being in the wrong place at the right time! Of course I quickly seeked guidance from various colleagues and experts in Singapore, and found that since in Singapore most parking is parking garages, rather than at metered parking on the street, the SMS-to-parking meter type of success of congested European cities had not taken off in Singapore. Since 2004 I’ve used this as a good case study
of how there are no guarantees in the mobile services industry.
2001 The Start of Something Very Big Indeed
In 2001 we started to see the first elements of TV-mobile convergence. MTV launched its pioneering Videoclash show, where viewers were given the chance to vote for the next video, by SMS. Who knew. Today that concept powers dozens of TV stations around the world – some earning as much as 70% of their revenues from premium-SMS, and by 2005 SMS-to-TV revenues were over 1.2 billion dollars. I do remember this Pearl was found by Stephan Gerrits – one of our younger party-going 3G consultants, and had that MTV attitude to the Pearl. It was definitely one of my favourites for 2001. Yet honestly at the time, I did not think SMS voting would ever grow to be big.
And 2001 saw the first of my many pets-oriented Pearls. In Japan, Bowlingual released its dog language-to-human translator, via mobile phone and cellular dog collar. As the joke went, what does the dog say? “I’m hungry, I’m hungry, I’m hungry, I’m hungry, I’m hungry”
2002 from cows to tamagotchis
March of 2002 saw the next of my Best Hits. Bessie the Cow. My good friend Mark Weisleder of Bell Canada actually told this story at the Customer Retention Conference in London in February, and of course I stole the story. And I really put myself into the story, acting out Bessie. You see, Bessie had become the first cow in Canada to be a cellular subscriber. Not quite intelligent enough to use a mobile phone, but Bessie had a beeper around her neck. When she heard the beeping, she knew it was time to go home to be milked. And cows being the herd animals that they are, as Bessie was the lead cow, the other cows would follow. The farmer never had to go calling for the cows to come home. He only beeped Bessie. And yes, I did the Mooooo with this Pearl
And April 2002 brought the story of the 5 second video clips. I told of J-Phone in Japan and its bizarre Sha-Mail video clips on mobile. I really didn’t think this would catch on. Of course as phones grew more powerful in memory and processor and battery, the clips grew longer. But yes, this was the very beginning of all that we now know as video blogging, SeeMeTV, user generated TV, citizen journalism, etc. It had started in Japan in 2001.
In October 2002 I discussed the virtual girl friend/boy friend for the first time. I pointed out this was the rebirth of the Tamagotchi. The girl friend needed loving messages every day else it would not be happy, just like a Tamagotchi.. Other virtual friend Pearls in 2002 included the virtual dance tutor from South Korea and the Dinosaur game from France and UK.
2003 a more money-oriented focus
In 2003 I started to notice MVNOs often with very surprising areas of focus. The first was Twins Mobile the fan club of the Twins teen pop duo in Hong Kong. A pop music band as an MVNO? That made me think. But also there was Super Stable the horse breeding videogame also from Hong Kong as an MVNO. I also reported on Virgin Mobile failing in Singapore, MTV launching in Sweden, and Finnish hamburger restaurant chain, Hesburger also launching as MVNO
In May 2003 in London I first discussed the lottery on mobile from Finland. This ended up being the first instance where someone from an audience came to see me later to thank me. When I presented in Tel Aviv at the IMIF event, and showed this Pearl, someone in the audience went and developed this service for the Israel Lottery. And when I returned to speak at Telecom Israel the next year, that person came to shake my hand and thank me in person. That really made this Pearls business seem real and valuable. If you guys can make money from these ideas, then it really does make it worthwhile.
In May 2003 I found one of my “big ideas” – Waiting Tones, ie Ringback Tones from South Korea. For at least the next year, I told everybody to get these waiting tones launched, and that it would generate more revenues for the industry than MMS. And I was proven right. I awarded Waiting Tones my Pearl of the Year award for 2003.
There were more weird stories among Pearls of course. In May of 2003 in Calgary, I told of the Haunted House finder, location-based, that had been launched in Japan. Meanwhile in South Korea a fly-repellent sound had been introduced to the mobile phone. In 2003 we had alcohol meters, love meters and horoscopes on Pearls.
In November 2003 I told of the surprising innovation from South Korea – that Ricky Martin had released six tracks of his upcoming album – and offered them to Koreans as MP3 files for download to 3G phones. That is what started the snowball that now in 2006 is crushing the iPod and iTunes. Full-track music sold to mobiles? Yes, it was only three years ago, invented in Korea.
Then there is the first true killer app for 3G. Another of my all-time best requested Pearls. Yes, a true killer application. Drei/Hutchison in Austria, launched “3 Visuel” as a bundle of SMS text messages, MMS and video calls but no voice. What use is a videocall without voice? How can this be a killer app? Ha, but consider its target audience: the hearing impaired. If you can’t hear or speak, you have no use whatsoever for a 2G phone. But a videophone? Sure, now it becomes a REASON to buy the phone. In fact, you’ll need two, as for every hearing impaired, there is a friend or relative who can hear but knows sign language. Understandibly this was my Christmas Pearl for 2003
2004 from Alpha Users to Communities
By 2004 I had started to monitor the developing world more closely, and reported for example about the Phone Ladies in Bangladesh. Another big hit was the story of the tree in Senegal. In one village where there was no cellular network coverage, a farmer noticed that he could get phone coverage if you climbed to the tree in his yard. The enterprising farmer set up a “phone booth” with a ladder. Villagers would come and climb into the tree, pay cash to the farmer, and make their calls. These kinds of stories really make me happy to be able to talk about our industry, and how much a simple service may be able to change lives. Phone Ladies were first explained in Stockholm, while the Senegal Tree was first discussed in Hong Kong.
And at the Marketing event in London in April, 2004, I first discussed Alpha Users in public. A year later this would become such a huge marketing story in telecoms, that I was invited to deliver the Strategy Keynote to the world’s biggest telecoms event, 3GSM World Congress, about Alpha Users. Since then Alpha Users have become the single most important target customer group in all of telecoms – with literally dozens of operators deploying Alpha User analysis and launch marketing managers insisting this is the best innovation in marketing of all time, that there is no going back to the marketing stone age of “early adopters” etc.
In July of 2004, at Oxford, I first discussed Habbo Hotel, the virtual playground and online internet social networking site, which collects payments via premium SMS. A true precursor of things to come, in so many ways – as now in 2006 these kinds of mobile social networking services earn 3.45 billion dollars worldwide. Funny. Digital community services would eventually turn into my fourth book, Communities Dominate Brands with Alan Moore; we made Habbo one of its case studies.
2005 selected highlights
February of 2005 saw the next evolution from SMS-to-TV chat, and SMS-to-TV dating and SMS-to-TV gaming. I selected SMS-to-TV Rap from Finland as my Pearl of the Month. This is for all the young poets and Eminen/50 cent wannabes, who wanted to send rap to TV via premium SMS. Paying a premium of 18 times more than person-to-person SMS prices in Finland. Sad but true
In May of 2005 in Singapore, I first discussed the most entertaining statistic to date – that 60% of mobile phone owners take their phones physically to bed with them. This invariably brings giggles from the audiences. I’ve discussed this stat at every presentation for the past year and a half.
The most recent Pearls are too fresh to really separate which are the true diamonds. But we do have the 1,000th Pearl which deserves special mention. The 1000th Pearl was Danseband Jukebox from Norway. A most unlikely candidate, yet this broadcast TV show has set the world record for highest viewer participation via SMS voting, with over 56% of its total viewership sending votes. What is so strange about a music show gaining viewer participation? Well, this TV show is targeting only the retired viewers in Norway, it has no viewers under the age of 55. Yes, more than half of these viewers have sent their requests of what that kind of Tango or Cha-Cha or Waltz, that live dance orchestra should play next. So who says SMS is only for teenagers.
1000 Pearls. By now there have been many a speech organizer who has requested a “Pearls” presentation, from the Symbian service developers in London to the Vodacom Wireless Application Service Developer community in Johannesburg. If you ever think that you enjoy seeing me discussing these Pearls, I can honestly tell you, it is more my pleasure to share them with you. I love this industry and thoroughly enjoy sharing our success stories. And now I look forward to sharing the next thousand Pearls with the industry.
Source- http://www.the3gportal.com
No cheap call for cellular network acquisitions
RAMPANT acquisitions in the cellular network industry have seen four players grow to dominate Africa by serving 40% of all subscribers.
Yet there are still 115 operators on the continent, providing plenty of fuel for the acquisition frenzy. The largest operators are MTN, Vodacom and the Middle East’s MTC and Orascom.
But the price tag for acquisitions is reaching a point where even the richest Africans may have to bow out and let the oil rich Arabs muscle in instead.
Recent takeovers have cost more than $1000 for each subscriber — an anomaly when Africans are among the poorest, lowest-spending users in the world. Africa has 165-million users and an average penetration of 18%. That means the potential for growth is still there, analysts agreed at the GSM Africa forum in Cape Town last week.
Of 472-million new users expected to join networks around the world this year, 48-million would be in Africa, said Devine Kofiloto, a principal analyst for Informa Telecoms. Yet the growth potential cannot be gauged purely by Africa’s population, as the majority are too poor to afford cellphone services and penetration would stabilise at about 32%, he said. The payback for acquisitions is also taking longer, as the average revenue per user is plunging as cellphones reach the poorer echelons of society.
Nigeria, with 140-million people, is the one country where growth appears almost limitless. Nigeria will surpass SA as Africa’s largest cellular market by next year with 43-million users, compared with an expected 39-million in SA. Even then only 32% of Nigerians would have a cellphone, said Kofiloto.
MTN is enjoying enormous success in Nigeria, and its rival, Celtel, hopes to emulate that after acquiring 65% of V-Mobile for $1,2bn. Celtel CEO Marten Pieters said Celtel was pumping in cash to upgrade V-Mobile’s network, which had stagnated during a legal battle by V-Mobile’s 5% shareholder, Econet, to scupper its sale. We will pump in at least $700m in the next two years. We need at least that much investment to catch up,??? he said.
Nigeria has 30-million subscribers and Pieters believes that will rapidly touch 50-million. In 2011 there will be at least 50 million customers and I think that’s understated. I think customers will at least double in the next three to five years.???
Celtel itself was bought by the Kuwaiti operator MTC for $3,3bn last year, and its oil-rich parent is willing to fund Celtel’s expansion across Africa. Middle Eastern players may be the only ones with the money to continue the merger splurge, Pieters said.
Not only did they have the cash, they also took a longer view on the return on investment, unlike European or African investors that sought a payback in a handful of years.
Even so, the deals were getting crazy, Pieters said, with Etisalat of the United Arab Emirates paying $2,91bn for Egypt’s third cellular licence. A third licence to operate cost more than the market capitalisation of the number-one player there, so you have to ask if that was reasonable,??? Pieters said.
Etisalat bid almost 20% more than the next best offer, prompting MTN to say it would not be goaded into overpaying. Vodacom beat MTN to that conclusion months ago, saying the price of new licences or takeovers was increasingly unrealistic.
Vodacom may soon be allowed to bid for licences or acquisitions north of the equator, as its 50% stakeholder Vodafone is scrapping a restriction that has stymied Vodacom’s expansion. However, its freedom may be too late, given the inflated prices.
Opportunities are bubbling up in Ghana, which may offer a new cellular licence and privatise the state-owned operator. Senegal is issuing a third licence and Angola is also expected to open up to new players.
Meanwhile, delegates to the telecoms conference debated how operators can make more money in poverty-struck markets.
Although watching TV and accessing the internet on a cellphone will gradually become more popular, income from those services will merely offset the declining profits from voice calls.
Operators need to look for revenue from data but let’s not deceive ourselves into thinking data will generate incremental revenue. It will merely offset declining revenue,??? Kofiloto said. He believes most Africans will get their first taste of the internet through mobile handsets. The future of internet access in Africa is definitely wireless,??? he said.
The operators agreed African governments were doing little to help the industry or their people. Rural Africa was not an attractive area to tackle, said Vitalis Olunga, chairman of the GSM Africa interest group. Rolling out services to remote areas needed government participation and regulatory approval to use a mixture of wireless, terrestrial technologies and satellites.
Africa’s cellular networks cover 350-million people who cannot afford to use them, and that would only change when governments removed tax and sales duties on handsets and mobile services, Olunga said.
Increasing the coverage also needed co-operation between rival players, said Gateway Communications CEO Peter Gbedemah. By 2008, calls from one African country to another could be routed directly and not via Europe — as they are now under a legacy of colonial telecoms systems.
Source- http://www.mybroadband.co.za
Arab mobile provider, Nokia launches Sudan operations
Oct 5, 2006 (DUBAI) — i2, the largest and most diverse mobile provider in Africa and the Middle East announced today in a press briefing the launch of its operations in Sudan.
i2 introduces its retail concept and after sales services for the first time in the country.
i2 is the first authorized Nokia distributor and service center in the country as well as being the first to offer mobile subscribers original Nokia devices with matching accessories and a one-year warranty. In Sudan, i2 will be available through its showroom, distribution network and service center.
i2′s operation in Sudan will be managed by Mohamed Osman El Tayyeb, Chairman, and Hussein Raouf Atwi, General Manager.
i2 plans to expand its operation throughout Sudan within the year to include Bahri, Omdurman and Kalaka. i2 has opened a branch in the state of Adbara and plans to expand to Madani and Port Sudan.
Nokia has long recognized Africa as an important market for the company’s business. Since early 1990, Nokia has provided mobile phones, enhancement, telecoms networks and related infrastructure and services to operators and customers throughout Africa.
‘Nokia’s approach is to develop and support all local distributors and service partners in all countries. Nokia has been working closely with our regional distributor, i2 across most countries in the Middle East and Africa for many years now.
i2 will be able to offer Nokia’s customers authentic Nokia handsets and official Nokia Customer Care Services to ensure that customers in Sudan receive the best possible Nokia experience.” Said Jarmo Santala, General Manager for Nokia Customer and Market Operations North West Africa.
The cost effectiveness of GSM-based services in comparison to fixed-lines has encouraged the fast growth of mobile services in Africa. Nevertheless, mobile penetration levels in Africa remain low.
‘i2 has a big role to play in the development of the mobile market in Africa. We want to make sure that it’s growing market follows international standards of product quality and service’ stated Abdul Hameed Al Sunaid, President and CEO, i2.
Founded in 1993 in Saudi Arabia as Itsalat International, i2 is the region’s largest and most diverse mobile phone provider in the region. i2 operates in: Bahrain, Chad, Egypt, Ghana, Iran, Iraq, Ivory Coast, KSA, Kuwait, Lebanon, Mauritius, Morocco, Reunion, Senegal, Sudan, Syria, Tunisia, UAE and UK.
Source- http://www.sudantribune.com
Mauritania: Arrival of Third Operator Will Shake Up Cosy Duopoly
Mauritania’s new third operator has already paid a staggering USD107 million for its unified licence. And all this money for a country that only has a population of around 2.75 million people. Currently there is a fairly cosy duopoly on mobile between the former incumbent Mauritel (now owned by Vivendi’s Maroc Telecom) and Mattel (owned by Tunisie Telecom. In other key areas like international bandwidth and the Internet Mauritel has a de-facto monopoly. The new operator Chinguitel has a unified licence and will start operations in December 2006.
The sum for the third bid has raised eyebrows both locally and elsewhere because the runner-up France Telecom (that owns Sonatel in neighbouring Senegal) only paid US$36 million. However Chinguitel looks set to invest a significant sum in making its operation work. And in doing so, it will force the other two operators in the market to raise their game. It has recently appointed a Mauritanian CEO currently working in a telecoms company in Saudi Arabia. Chinguitel is betting that the economy is set for some spectacular growth with the impact of oil (which has recently started pumping from offshore fields) and a newly opened copper mine.
The new entrant is a consortium of Sudatel (with money from the sale of the stake in its mobile operation) and Gulf state investors. It is rumoured to be planning to spend US$40 million on a network that will have 150 base stations from day one compared to the 160 it has taken Mauritel several years to build up. Mattel has only 80 base stations although it is also engaged in a rapd build out to get its coverage to match Mauritel’s.. To meet the competition, Mauritel is also ramping up its network spending and modernising its network over the 2006/2007 period.
A key problem for all operators is access to international bandwidth. An international fibre connection is available through Sonatel but the Senegalese incumbent is charging a significant premium for the transit to the SAT3 landing station. Competition may force the solution of this problem. It would be easy for Mauritel to build a fibre link to Nouadhibou on the country’s northern border. It is then only a comparatively small distance between there and Laayoune, the western-most extension of Maroc Telecom’s fibre network. This would give it access to international bandwidth that was significantly cheaper.
In order to compete, Chinguitel would either have to get regulatory dispensation to share the resulting cheaper prices on Mauritel’s fibre link or build its own. It has two possible choices: go north to Morocco and build a submarine spur to the Canary Islands or build a link to Mali and off to a cheaper SAT3 destination overland. The latter is probably less feasible given the distances and the generally higher prices on SAT3 further along the pipe.
The incumbent’s mobile subsidiary Mobitel Mobile has 500,000 subscribers and its only competitor Mauritel has 400,000 subscribers. However, these figures are misleadingly optimistic as many Mauritanians have two phones because the interconnect rates between the two networks are very high. Industry insiders say there is a a mid-term potential of 1.2 million subscribers.
Currently mobile coverage is limited to coastal strip between Nouakchott and Nouadhibou and the “route de l’espoir” to Mali and along the Senegal River that makes up the frontier with southern neighbour Senegal.
Mattel will launch a GPRS service later this year (probably ahead of the Chinguitel launch) aimed at high-spend, post-paid customers. It will start the service in Nouakchott and roll-out the service once that has been established.
Mattel claims to be 30% cheaper than Mauritel Mobile but this is a relatively recent price differential. Both operators have paid fines for quality of service issues but as local industry sources point out, these fines are relatively modest alongside the sums of money each operator is making.
Mattel seems to have adopted a minimum investment, maximum return approach that has worked well with a duopoly where each player shadows the price and service behaviour of their competitor. However, Mattel chose not to bid for any of the recent round of licences and it looks like that it does not have the money to keep up with the spending race that will be initiated by Chinguitel’s entry into the market. As a result, it is probably the operator with the most to lose as competition hots up.
Internet access is only available in Nouakchott and Nouadhibou and that covers only about 40% of the population.
There used to be five ISPs but that number has gone down to two: Mauritel and Top Technology. The latter is having a hard time making any money. Mauritel has squeezed all Internet competition out of the market. Its charges meant that ISPs were left with a margin on the supply of basic bandwidth of only US$7 per subscriber. Since some had only 200 subscribers, the complete impossibility of creating a business model is apparent. Mauritel has also refused to supply DSL services to the one remaining independent ISP.
There are 3,000 Internet subscribers, of which around 1,000 are DSL subscribers. Many of these subscribers are using Skype to speak to friends and relatives abroad. DSL prices are very high: US$95.69 (without tax) for a 256K connection as the roll-out is essentially seen as targeted at the corporate market.
However the emergence of a third competitor may force Mauritel to adopt the strategy of its parent in Morocco. It has used the lowest DSL prices on the continent (US$22 compared to Mauritel’s $95.69) to get the highest number of DSL subscriptions on the continent (340,000). The tactic has been a “land-grab” to deny its competitor Meditel the opportunity to get established. However before low prices can really emerge both Mauritanian competitors will have to find lower international bandwidth prices.
All of this investment and competition can only be good news for Mauritian consumers until both Mauritel and Chinguitel have effectively forced Mattel off the road.
Source- http://allafrica.com
Technorati : Chinguitel, Mauritania, Mobile, Operator
Ice Rocket : Chinguitel, Mauritania, Mobile, Operator
