T-Mobile to Bring MyFaves to Europe

On March 14th T-Mobile International announced plans at CeBIT to bring the high-profile T-Mobile US myFaves service to Europe. The myFaves service will launch in Germany sometime this year, and potentially in other T-Mobile markets, too. The service allows users to see the photo or icon displays of five chosen friends or family numbers on the display of their myFaves handset. Tariff details are not yet available.

Competitive Positives

► myFaves will afford T-Mobile Germany a highly original and visually differentiated family and community tariff proposition. Family and friend tariffs are not altogether unknown in Germany, but none deliver the visual address book marketing power of myFaves.

► In the US, T-Mobile US has extended its myFaves device portfolio to 25 devices offering a high variety of myFaves firmware-enhanced options. In Europe, T-Mobile will be able to draw on this existing portfolio. It is likely that this service will launch with a fair handset choice.

► In the US, T-Mobile US markets myFaves with an ‘Individual myFaves Plan’ and a ‘Family myFaves Plan,’ allowing it to target both the community-oriented youth sector and the more diverse family sector. Although T-Mobile Germany has yet to reveal details of its own myFaves tariff options, it is likely that it will follow the same lines.

► More Competitive Positives

Competitive Concerns

► It is entirely unclear whether T-Mobile Germany, or any other T-Mobile market, will follow the same myFaves tariff model as the US service. In particular, it is not known whether T-Mobile Germany will implement the same ‘any network’ criteria for the five designated numbers in the same ‘unlimited calling’ context. The appeal and ultimate success of myFaves hangs on such details.

► T-Mobile US has been able to position myFaves as a national service, and roaming is not inclusive in the tariff’s flat rates. Furthermore, T-Mobile US myFaves users have to manually dial the phone number of one of their designated favourite numbers (including the international dial-code) when roaming. Although roaming is not considered to be a big issue in the US, it is a big issue in Europe, where consumers more regularly hop borders. Roaming will be a bigger issue for myFaves in Europe than it is in US.

► myFaves is neither true Web 2.0 nor a social networking tool. It is a fancy visual address book, aligned with a community/family tariff. Deutsche Telekom’s CEO has listed Web 2.0, social networking and mobile-PC service innovation as important ‘next steps’ in the operator’s service development, but myFaves misses the mark on all these prerogatives.

► More Competitive Concerns

Vodafone Gets Aggressive – Introduces Session-Based Pricing for Data Roaming

On March 14th Vodafone announced the introduction of its flat-rate, session-based pricing for data roaming. Priced at EUR 12 for daily usage (calendar day) or a 24 hour period, the service is expected to be available across the Vodafone footprint starting July 01, 2007.

Recommended Competitive Responses

► T-Mobile and Orange Business Services should point out that they offer bundled 3G and WiFi access capabilities on their data cards, thereby providing customers the flexibility to access the Internet either on their 3G network or utilize their WiFi footprint. In addition, Orange Business Services and T-Mobile should take serious note of Vodafone’s move and study their own pricing models to offer session-based pricing for both 3G and WiFi access on roaming.

► BT Global Services can compete effectively with Vodafone in the UK market by leveraging its FMC strategy with Fusion and its Wireless City project coupled with BT Openzone. However, BT Global Services needs further partnerships for 3G access in the European market. In addition, BT Global Services should interpret this move as a potential threat to its remote access portfolio and specifically to MobileXpress.

► Sympac should take motivation from Vodafone and consider replicating the same model. Given that Sympac enters into partnerships with in-country operators for voice services, it should leverage the same for 3G data access and offer a flat-rate plan for the same. In addition, Sympac has a strong differentiator with its fleet management solution, in partnership with Dangard, and should leverage the same to position a differentiator against Vodafone. However, Sympac will find it difficult to replicate Vodafone’s European foot print initially but needs to work towards striking more operator agreements to increase its coverage.

► Though a leader in the remote access space by virtue of having the largest aggregated WiFi hotspot coverage, iPass has only two agreements in place for 3G access - one in the US and the other in the UK. Therefore, iPass needs to strike more partnerships for 3G access in Europe.

Recommended End User/Customer Responses

► Vodafone’s new pricing structure offers the end-users ease of use and makes it easier for an enterprise to allocate cost to data usage on roaming. In addition, the service is competitively priced and therefore key decision makers in the IT department should compare Vodafone’s offering with not only its competitors’ offers but also those made by hotspot service providers and aggregators.

► Business customers should question Vodafone on its rollout plan for the new data roaming tariff and find out in which country market they can expect the new pricing. In addition, they should also seek clarification on how a 24 hour session is defined and base their usage pattern on the same.