O2 are raising their prices. I stick two fingers up to them, their patronising “best experience” babble and their price rises. If O2 need to raise prices to sustain profitability then no problem, just don’t couch it in the language of being good for me, the customer, because it’s not. And don’t trumpet “we’ve held off putting our tariffs up… even when our competitors have” as a benefit because you’re now as bad as they are.
“We’ve always done everything possible to give you good value” - have you, have you really?:
- Does your network fall over regularly? Yes.
- Do you refuse to offer refunds for interrupted service? Yes
- Do you send the SMS’s that are delayed by six months and then blame the customer? Yes
- Do you arbitrarily increase the price of your tariffs? Yes
All in all that’s not a good reason to stay so I’m off. I don’t care about the 65p per month price rise but I do care about being a customer of an organisation that puts the creation of profit before the delivery of a great service. Great service makes customers want to spend, to stay with the network and to recommend it and from that flows future profitability. But when you need to raise prices it’s an admission of defeat - a very public acceptance that the only way to make the profit is to raise price.
O2 used to do this by delivering the best service, on a high quality network, with a distinctive brand and benefits that customers liked.
No, more. So goodbye O2, I won’t miss you.
Great news this morning as Google Maps app released for iOS. It’s genuinely a pleasure to return to the comfortable surrounds of an app that knows where major British towns are, can find places when it’s supposed to and doesn’t offer ridiculous directions.
Apple Maps can’t find Swindon
And as if by magic here’s a perfect example. This morning I’m in Swindon at the railway station. Let’s try a search for ‘Swindon’.
Google Maps results are on the left - no problem, finds Swindon as you’d expect. Apple Maps results are on the right. I’m in Swindon, the map shows Swindon but when I search for Swindon I get ‘No results’. Doh.
Apple Maps may be 99% accurate (it feels like 59% accurate) but I don’t care. I’m going back to Google Maps and will, likely as not, never return to the monstrosity that is Apple Maps.
And no I’m not going to say anything disparaging about Swindon.
WhatsApp the multiplatform messaging app that is reputedly decimating mobile operators SMS revenues is one of the worlds largest messaging services but it’s not alone. Worldwide I’ve concluded that there’s over 2 billion ‘OTT’ (over the top) voice and messaging apps installed worldwide, with over 700 million users.
You’ll recognise many of them - Facebook Messenger, Skype and iMessage but there’s a few Asian services like KakaoTalk, Line and WeChat that are massive in their own right that we’re only just starting to hear about. These services have often grown very quickly in local markets and then expanded internationally.
My definition of ‘OTT voice and messaging apps’ is as follows:
- Smartphone apps that use the mobile internet to connect and provide their service on top of a mobile operators data network
- Free of premium charges
- Primarily focus on voice and messaging features that are used as substitutes for existing mobile operator provided services
- Services assumed to be primarily mobile e.g. total Facebook and Skype users adjusted downwards to account for mobile users
To get the total app numbers I simply took the largest OTT voice and messaging apps and added them up. Two billion is therefore installed apps rather than active users. To determine total active users I made assumptions about the number of apps that individual users used at the same time. But I still estimate that the number of users is over 700 million worldwide.
Additionally there are substantial reasons to believe that the app install and user numbers are under-estimated because:
- There’s hundreds of voice and messaging apps available in the App Stores not listed here - many of which have millions of users
- The big one’s – Facebook Messenger, iMessage, Skype are growing every day
- Estimates of WhatsApp users have gone as much as 100m higher than I’ve assumed
- Large networks with voice and messaging features like TenCents QQ IM in China (700m+ online users!) are excluded as they’re wider services than OTT voice and messaging
Where possible I’ve used data published from the services themselves. Where such data isn’t available I’ve made my own estimates. I’m happy to share the references if anyone wants them.
I recently posted that the EE brand might not make make much sense to Orange customers and so it has come to pass.
How the EE brand launch works in practice
Remember I’m an Orange customer and I intimately know what Orange is but as a new brand I don’t know what EE is. So here’s a text that I get from Orange.
“From Orange - You’re part of the UK’s largest 3G network, now powered by EE.” Erm, am I? What’s that then? Why is this happening? How do I benefit? Will I actually read this text?
Ok I don’t really understand that but let’s have a look what’s on this nice link that Orange have provided.
This is where it gets confusing
“”EE -the network that’s ready for everything” - is it? You’ve been telling me for years that Orange has the best network. So which is it?!
“Everything Everywhere, the company behind Orange and T-Mobile is now simply going to be known as EE, which is also now the name of the network for Orange and T-Mobile customers” - No amount of copy writing can make this better. There’s a company called Everything Everywhere that I didn’t know existed or care about that runs Orange. It’s been renamed to EE which is also now the name of the network that I thought was provided by Orange which is now called EE. Seriously, lost me, don’t know or care what you’re on about.
“Still the Orange you know and love” - you’ve updated the network to EE which is great news for me but it’s still the Orange I know and love?!?!?!
“Everything you love about Orange will stay exactly the same” - So what’s this EE thing if everything stays the same? And if you’ve updated the network then I hope the Orange network doesn’t stay the same as, like many other peoples, my experience of if is pretty poor!!
“EE will also be launching the UK’s first mobile 4G network” - is this a different network? Is it new? What’s it got to do with Orange? Do I need to do anything?
“Move over to EE…” - I thought that EE was the network for Orange so why do I need to move? Will my network still work?
“Superfast4GEE” - huh? You’ve not mentioned Superfast4GEE before so what’s that?
And so it goes on. And on.
I’m being a bit deliberately obtuse here and many of the Orange customers who are targets for the 4G bit of EE will know what 4G is but this really illustrates how difficult it is to explain in straightforward terms what the relationship between Orange, EE, Everything Everywhere, 4G and 4GEE is.
For the average Orange customer this is likely to be a bit too much to take in and may have the negative consequence of not cutting through with the EE message but also muddying the Orange brand.
Disclosure: I used to work for Orange and Everything Everywhere and, as you can probably tell, am a bit of a sceptic.
Dancing with the devil: WhatsApp partners with mobile operators
Over the last few weeks the first ‘proper’ partnerships between mobile operators and WhatsApp have emerged. The most recent one is with Mobily Saudi Arabia after recent announcements from 3 Hong Kong and Virgin Mobile Chile. Telefonica Colombia has promoted WhatsApp as part of its data bundles since January 2012. The operators involved aren’t yet Tier 1 carriers but these WhatsApp partnerships look to be similar to the approach that was previously taken to Facebook and Twitter where operators resisted for as long as possible and then overcame their nerves, changed direction and embraced them. On that basis I’d expect more to follow.
What’s being offered
WhatsApp partner operators offer their customers unlimited WhatsApp usage in weekly or monthly plans which include the data so there is no additional cost.
Mobiliy Saudi offer unlimited WhatsApp usage for between 10 SR per week (£1.65, $2.67) and 20 SR per month (£3.30, $5.34).
3 Hong Kong’s WhatsApp Data Pack costs HK$8 (about $1) for a month. In addition 3 also offering a WhatsApp Roaming plan for HK$48 (about $6) per day which includes 5MB of data. Whilst considerably more expensive than the monthly plan for use in Hong Kong this still offers large savings to the average roaming costs. In effect 3 Hong Kong are encouraging their customers to use WhatsApp when roaming rather than their own perhaps more lucrative services like SMS which seems to imply that either 3 Hong Kong don’t have high roaming revenues or that the target user for the WhatsApp bundle won’t be roaming much.
What is the thinking for operators?
Now the thorny question here is why? Why would operators choose to actively promote WhatsApp which is known to dilute their high margin SMS revenue and that is widely supposed to be one of the OTT services that threaten the operators very existence. The answer lies in the individual operators brand and market position. If the operator is a challenger brand in an aggressive market then they’re gambling that they’ll acquire customers and brand strength through the association that is worth more than any dilution in their SMS revenue.
The operator still makes money through the sale of the WhatsApp packages but what they’re really interested in is the brand kudos from offering access to WhatsApp. They can promote themselves as being on the side of the user, providing a ‘cool’ service that their customer actually want to use and target it to the highly valuable customer segments who will use WhatsApp. If they’re first mover in their market and have priced the bundle at a sensible level then they stand a decent chance of cutting through.
In all but the most developed markets SMS revenues are also still rising so all the operators are doing is promoting a WhatsApp bundle to users who would probably use WhatsApp anyway. In this respect they’re taking a bit of additional revenue where they can from WhatsApp use knowing that they’ll also continue to make some from SMS for a few more years.
More fundamentally it also shows that mobile operators recognise that their role in life is to provide access to the services that their customers want to use, rather than the ones that the operators would like them to use. WhatsApp is undoubtedly a valuable, and in many cases much loved service, that plays an important role in peoples lives and rather than trying to fight against this offering WhatsApp can be a decent policy for many operators. The same situation existed for Facebook and Twitter a few years ago yet now it’s considered entirely normal for operators to provide access to Facebook and Twitter.
What is the thinking for WhatsApp
From WhatsApp’s perspective I’m not sure they really care about mobile operators as what they’re primarily interested in is distribution. To become the alternative messaging service of choice worldwide will require a few more years of sustained growth and WhatsApp have still to see off challengers like KakoTalk, Line and WeChat. Having a few mobile operators promote them won’t add hugely to their growth but as another arrow in the bow of widened distribution it’s probably worth doing. This assumes of course that WhatsApp aren’t interested in revenue which is probably true for the moment. The mobile operators have almost certainly done revenue share deals where some of the revenue goes to WhatsApp but this won’t be significant in the scheme of things as even at 50% revenue share it would take a lot of $1HK sales to make a difference.
And the end
Having said all of that most operators around the world will be very concerned about the impact on their revenue of OTT messaging and voice service like WhatsApp or Viber and that’s before any serious consideration of what Facebook or Skype could do. Partnering with WhatsApp might be right for some but it’s a high risk ploy and the operators concerned will probably be adopting a contrarian strategy where they try a number of things. If they see wholesale adoption of their WhatsApp plans and a corresponding decline in their messaging revenue then they can put the price of the plan up to limit the damage.
New EE brand launch doesn’t make any sense
I’m a long term Orange customer. I know that Orange is a mobile network and that I pay it each month to make calls, send texts and provide a data connection. I’ve lots of practical experience of Orange from calling Customer Services, visiting retail stores and using their apps or website. I also have perceptions that have built up over many years and tens of millions of pounds of Orange’s advertising - the quirky cinema ads, movie trips with Orange Wednesdays, Glastonbury phone charging zones, the often terrible network. Whether these perceptions are right or wrong doesn’t matter as they’re perceptions – subjective opinions that influence how I feel about Orange and how I will act towards them – whether I’ll stay with them, whether I’ll pay more or less, whether I’m an advocate or a critic.
My knowledge of Orange, like several other brands, is almost like DNA – an in-built understanding developed over a long relationship. And that is why it’s all the more mystifying why Everything Everywhere (the company that runs Orange and T-Mobile in the UK) have chosen to launch a whole NEW brand called EE to launch their 4G LTE network. In principle it’s not a bad idea - new network, new devices, new capabilities – the EE brand can make a change from the past, break free of some of the more toxic aspects of the Orange and T-Mobile brands, start afresh and build up new perceptions of their customers.
But, and these are quite big buts, there’s several things that this doesn’t take into account:
1. How expensive and time consuming it is to launch a brand new mass market consumer brand in a tech savvy, highly competitive market
2. How complex it will be for Everything Everywhere (the company) to run three brands - EE, Orange and T-Mobile – and all of the associated systems and capabilities required to support those brands
3. Will it make sense to the millions of existing Orange and T-Mobile customers?
Orange launched a new brand once before in 1994 but at that time mobile phones were new and the whole tech landscape much more straightforward. These days every man and his dog have a smartphone, an iPad or a connected TV’s and the space to create a new consumer brand is much less clear. Even that challenge can be overcome with a strong brand, great execution and a massive amount of money but the fundamental systems and process complexity will be much harder to manage. With systems architected often in the late 1990’s and early 2000’s the mobile networks are built on top of some fairly creaky technology – the retail and customer services systems, the tariffing, provisioning, billing and all the other myriad of systems that go into running mobile network. These systems aren’t particularly flexible and often require development or complicated processing to do what the operators need. And if that was hard before with two brands Everything Everywhere have just make it several times more complicated.
But ultimately the success of the EE brand will be determined by us, the customers and potential customers. Does thee EE brand make sense to me? Can I understand what EE is saying and how I’ll benefit? Will I pay for it?
And if the experience of the brand launch is anything to go by I suspect the answer, for a long time to come, will be no.
Disclosure: I used to work for Orange and Everything Everywhere and, as you can probably tell, am a bit of a sceptic.
Being obsessed by smartphones shouldn’t mean that we forget about feature phones as they aren’t dead yet, even in the US
Everyone knows that smartphones are growing massively but as Comscore point out we shouldn’t forget about feature phones. Their latest data from the US shows that feature phones account for just over half of the US’s existing subscriber base and just over one-third of all new mobile device acquisitions.
*Index of 100 indicates average representation among the mobile population.
The data is based on an index of 100 - numbers above 100 represent owners of feature phones greater than the average; numbers under 100 are less owners of feature phones than the average.
The data shows pretty much what you’d expect - young people aged 13-17 and 18-24 have a higher rate of acquisition of feature phone - probably as they can’t afford smartphones and the associated data plans so are left with buying cheaper feature phones or being given hand-me-downs from their parents.
By contrast older consumers from 45+ have higher levels of feature phone ownership suggesting that they are hanging onto their device for longer.
The lower levels of smartphone ownership and acquisition in 25-34 and 35-44 year olds clearly shows the consumer segments who are smartphone owners.
Smartphones will dominate, just not yet
The data captures a point in time in the US where smartphones haven’t penetrated all subscriber segments as they’re still too expensive, particularly for mass market, lower value segments like the young. This will change as new manufacturers enter the market, different consumer segments are targeted and prices fall with an obvious opportunity for low cost, entry level smartphones with corresponding tariffs. As smartphones generally create more revenue then this is in device manufacturers and mobile operators interest.
The same trend will be played out in older consumers but probably more slowly as the need for new devices is less clear and consumers stick with what they know. And yes I know this sounds like a cliche but it’s probably true.
US market as indicator of the rest of the world
What is interesting about the data though is that this is for the US - one of the most advanced mobile economies in the world where you’d expect smartphones to dominate.
In the mobile industry we do tend to get excited by smartphones, and rightly so, because they can do more, they create more engaged consumers who are willing to adopt new behaviours and to pay more for devices, connectivity and content. Critically consumers seem to view smartphones as highly desirable consumer goods to aspire to and this trend is likely to ensure an almost constant upgrade path to smartphones as non-owners don’t want to miss out.
On this basis it’s only really a matter of time before smartphones dominate the US market but in the meantime don’t forget about feature phone owners!
Rest of the world
And if we’re reminding ourselves to not forget about featurephone owners in the US then certainly don’t forget about them in the rest of the world where smartphone adoption is often considerably behind the US.
Consumers in developing markets in Latin America, Asia Pacific and Africa and the Middle East still want to be connected, to post, tweet and blog their lives, even if they don’t own an iPhone yet.
Disconcertingly US consumers are shown to spend less on cars, clothes, entertainment and food to afford smartphones and their mobile bills
US Government data reported in the Wall Street Journal shows that people have spent more on phone bills over the past four years funded by reductions in cars, clothing and entertainment.
From a personal perspective I can’t believe that changes this large lead to an improvement in consumers quality of lives no matter how much they like their smartphones or use their mobiles. There are obvious benefits from mobile but whether enjoying life less as a result is a necessary trade off I don’t know.
That said it’s not likely to get any easier for consumers - they’ll still want to upgrade to iPhone 5’s and HTC One X’s in their millions, mobile operators will launch ever more expensive 4G plans and movie, music and TV content will proliferate which someone’s got to pay for.
The mobile operators are hardly incentivised to slow down price escalation or to stop consumers upgrading to better devices or higher priced plans and will continue to do everything in their power to maintain these trends. Which is of course not really a bad thing in a free market economy.
It may well prove that at the macro level such changes in consumer expenditure are part of a natural and ongoing process of rebalancing where mobile and connectivity plays a more important part in peoples everyday lives.
That said the worry must be that in a recession or at least a slow economy that household income is too narrowly focussed on mobile and telephony services and that the benefits don’t trickle down to the rest of the economy.
iOS6 update includes loads of new Emoji icons including my personal favourite - a poodle
Love ‘em or hate ‘em Emoji icons are a nice way to perk up conversations now iOS6 has launched. For those who’ve missed this exciting phenomenon Emoji’s are small images that can be used to illustrate iMessages, email or anywhere else in iOS that accepts text - think animals, fruit, flags, sports, music etc… and loads of others.
In iOS6 Apple have introduced new animals - see the screenshot below for a tortoise, ant, snake, monkey and prawn. For some reason I’m drawn to the effort that has gone into designing the poodle. But let’s not ask the question why a poodle and why not a Westie, a doberman or a schnauzer?
To enable Emoji icons go to:
General -> Keyboard -> Keyboards -> Add New Keyboard
Choose Emoji and off you go.
I’m not going to say too much on this - I worked for Orange for a long time and probably know a bit too much to have an independent view of the launch of the UK’s first LTE network.
Having an LTE network in the UK is undoubtedly a good thing although whether Vodafone or O2 agree is another thing entirely as they won’t ever be able to support the iPhone 5 due to spectrum limitations.
What did strike me with the EE LTE launch trumpeting the merits of downloading movies, watching TV, playing online games and generally consuming stuff on the move was the similarity to BT Cellnets launch of WAP, way back in 2000. Have a look. Different style, same message.
EE LTE launch 2012
BT Cellnet WAP launch 2000