Dutch Price War Alert: easyMobile Weighs In, Again

On November 10th easyMobile reduces its voice tariff from EUR 0.16 to EUR 0.15 per minute and SMS rate from EUR 0.08 to EUR 0.06. The tariff revision is the latest in a damaging price war in the Dutch consumer market.

Recommended Competitive Responses

► Incumbents can be aggressive without engaging in predatory pricing tactics. Incumbents need to start building marketing messages which spell out the advantages and incentives implicit in the decision to switch to their own network. Vodafone NL, Orange NL and T-Mobile NL in particular should study the 'end user testament'-style of billboard advertising, first created by BASE in Belgium and now adopted extensively in Germany. This first-hand, man-on-the-street advertising style is quite different to the incumbent 'inspirational marketing' approach of the 1990s, and more credible in the hype-weary 21st century.

► Simyo and lowcall.nl are both limited by an online-only channel, and incumbent operators should use their high-street presence to ring the difference in terms of customer experience.

► Vodafone NL, Orange NL and T-Mobile NL saw this challenge coming, and are already well equipped to deal with a prepaid price war in terms of services and promotions which give end users benefits and discounts expressed in non-monetary terms. These players now need to flag up these services better, with more marketing and event-oriented promotions.

Recommended End User/Customer Responses

► End users should understand that quality of customer support is the first compromise of cheap, no-frills offers such as that marketed by easyMobile. The cheaper the offer, the lower the level of support.

Telenor Buys Vodafone Sweden

On October 31st Telenor has agreed with Vodafone Group to acquire Vodafone Sweden for a consideration equivalent to EUR 1,035 million (enterprise value). Vodafone Sweden is the third largest mobile operator in Sweden, and the second largest player in the Swedish business market. Telenor and Vodafone have agreed the terms of a Partner Network Agreement in Sweden, allowing Telenor, Vodafone Sweden and Vodafone customers to benefit from Vodafone's global brand, products and services in Sweden.

Recommended Competitive Responses

► TDC needs to firm up on its partner network agreements for Sweden and Finland now that Vodafone has been replaced by Telenor. TDC needs to ensure that it can continue to use the existing Vodafone network in Sweden and benefit from its Partner Network agreement with Vodafone across the region.

► TeliaSonera should stress its commitment to fixed/mobile convergence and aim to beat Telenor to deliver such services across the Nordic region.

► Tele2 should consider the strategic value of its 3G network in Sweden in the light of Telenor's purchase of Vodafone Sweden. With TeliaSonera having to rely on Tele2's 3G network for its MVNO services, then Tele2 needs to ensure that it makes full use of this dependency.

Recommended End User/Customer Responses

► Business customers across the Nordic region should now consider Telenor's regional portfolio for their mobility needs. Customers should look to Telenor to offer regional tariffs and discount deals on roaming services across the region for both voice and data services.

► Existing business customers of Vodafone Sweden should question Telenor as to the continuing availability of Vodafone's roaming services and pricing. With Vodafone Sweden's customers enjoying access to Vodafone's advanced business services, customers should ensure that these continue after the change of ownership.

► Business customers looking for converged fixed and mobile services should now question Telenor as to its roadmap and compare this to TeliaSonera. With two options, customers should expect increased competition for delivery and pricing in this area.

AT&T Outlines Global Network Client Enhancements

On November 14th AT&T outlines functionality enhancements due to appear in December's launch of the AT&T Global Network Client Version 6.5.

Recommended Competitive Responses

► Equant should claim that its Business Everywhere client is leading the market in terms of cellular wholesale access, courtesy of its relationship with Orange.

► iPass should tout that it is the leader of the remote access space in terms of value-added, device-oriented security services, as embodied in its new Universal Policy Enforcement (UPE) offering.

► BT should rethink device-oriented value-added security with MobileXpress, as this is quickly becoming a key selling point within the aggregator community.

► All competitors without an endpoint management service enhancement should think about adding this layer of value-added security, and this continues to be the main competitive differentiation between the 'aggregators' and the 'global carriers.'

Recommended End User/Customer Responses

► End users must understand the difference between BYOA cellular and provisioned cellular, as this has wide ramifications in terms of the service's total cost-saving proposition. The BYOA model requires end users to strike separate airtime agreements with each wireless operator individually, with separate billing.

► IT managers should ask their provider to outline their plans for integrated VoIP. In particular, IT

managers should seek assurance that their own in-house VoIP solutions can be extended to wireless devices via the provider’s client software in the mid-term.

Vodafone Launches Mobile TV with Sky

On October 31st Vodafone UK teams with Sky to launch mobile TV services in the UK to 3G customers. The Sky service is exclusive to Vodafone until March 31, 2006 and TV will be free until January 31, 2006. Subsequently two TV options will be available for GBP 5 each, per month.

Recommended Competitive Responses

► Orange UK needs to change its Mobile TV offer from 20 hours or 1 GB only to unlimited. This restriction for GBP 10 per month will frustrate users.

► 3 UK needs to up its market awareness of new services and products. At present, its WeeMee advertising campaign is confusing.

► ROK Entertainment needs to blow its own trumpet and sign up new users quickly. It should also re-approach mobile operators seeking for new collaboration possibilities.

► T-Mobile needs to pull its socks up in the UK. It is constantly the last mobile operator to launch new content in the UK. T-Mobile must take advantage of its 18-month sponsorship of Robbie Williams and offer a made for mobile TV service featuring the exclusive clips of the singer.

Recommended End User/Customer Responses

► 3G users can’t go wrong in the UK if they sign up for the free Sky Mobile TV trial. This access will also enable Vodafone to over come any initial teething problems the service might have and so, when the subscription starts the quality will be worthy of the fee.

► Consumers curious of mobile TV services should look at ROK Entertainment, if they don’t have a 3G device. This could be an alternative to watching TV on the move, but be warned, hefty downloading and streaming fees will be incurred on top of the subscription charge.

Show Updates

Nokia Mobility Conference 2005: Nokia Introduces First UPnP Mobile Phone, and What a Phone!

On November 2nd Nokia’s N80 is a statement product. It states, “I’ve got EVERYTHING.” Put every wireless acronym into a slider case, add a new one - UPnP - and a 3MP camera plus a relatively low unsubsidized price of EUR 500, and you have one remarkable product.

Competitive Positives

► Remarkably, the N80 is expected to cost only EUR 500 unsubsidized, and it’s not even a classic Nokia bar design, but rather a slider, which helps it maintain a small profile.

► The N80 is stuffed with multimedia features.

► The N80 is the first handset with UPnP, which helps further differentiate the product and should burnish Nokia’s brand among early adopters. Perhaps more significant, Nokia is positioning the UPnP functionality as the cornerstone of its new digital home strategy. Rather than try to take on players in the living room, Nokia is doing what it does best and focusing on handsets where it can add value.

► The N80 runs the highly configurable Symbian S60 OS, which will ship with Nokia’s new Web browser with minimap feature.

Competitive Concerns

► The N80’s UPnP capabilities are well ahead of the market - there is no installed base of UPnP devices for the N80 to connect to. Nokia’s N80 UPnP use cases are interesting for someone who already owns a suite of UPnP devices, but the ability to move content around a bit is not compelling enough to drive purchase of either the N80 or UPnP devices as they hit the market.

► The N80’s battery life cannot keep up with its extensive functionality: talk time is limited to three hours, and that is without recording video, taking pictures, listening to music, browsing the Web, displaying a slide show on a UPnP television, or editing Microsoft Word documents.

► Nokia has not met its shipping schedule for another would-be revolutionary Nseries product, the N91 music phone. If the N80 similarly ships late, its features could - at least theoretically - be matched or eclipsed by the time it reaches the market.

► The N80 is expected to cost EUR 500 unsubsidized, which is not remotely a mainstream price point, limiting its potential market reach.

► The N80’s compact case is nearly an inch thick.

The French MVNO Market Expands, in all Directions

The French MVNO market has been late to flower, and the fruit looks very strange indeed. Whereas the focus of early MVNO markets has been the low-cost consumer sector, the French MVNO market - just one year old - is already highly diverse. In the rest of Europe, the term ‘MVNO' has become synonymous with cheap, unsophisticated consumer-centric tariffs: online SIM-only and ‘no-frills' offers, intense price depreciation and the proliferation of youth-centric brands.

However, of the ten French MVNOs created to date, only two offer a classic prepaid tariff. Three offer subscriptions with some inclusive value-added ‘unlimited calling' - considered throughout Europe to be the cutting edge of tariff innovation.

Furthermore, 40% of all French MVNOs have successfully negotiated for GPRS or UMTS capacity leasing, with clear ambitions to compete in the higher-value mobile content space. What's going on?

Read the full Advisory Report

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