European Mobile Companies don’t understand that they’re just data pipes

Emily spotted this one — the text below is a quote from the Telegraph’s article about European mobile companies apparently considering a rival to Google.

Link: European Mobile giants plot secret rival to Google

“Vodafone, France Telecom, Telefonica, Deutsche Telekom, Hutchison Whampoa, Telecom Italia and one American network, Cingular, are among the companies that will come together for secret, high-level talks at the mobile industry’s biggest annual trade show in Barcelona next week.

The initiative will come as a surprise to Google and Yahoo!, which have lost no time in striking deals with mobile operators and handset makers. But the mobile industry believes it can retain a greater share of advertising revenues by developing its own service.

… It is not clear what the implications are for existing deals between networks and the big US search companies.”

Well, get over yourselves, I think, is my first response to this rumour.

It smacks of reality though. I really can imagine the big mobile CEOs all sat in a room, cigar smoke all over the place, each nodding in consent to the ‘plot’ to create a rival to Google. 😉

They’ll have looked at the revenue projections knocked up, no doubt, by a few Accenture consultants, showing that their ARPUs are generally going to become stagnant in the context of a) fixed-data packages and b) explosive growth in mobile search.

Now, in order for mobile search to WORK, you have to have a rather good SEARCH ENGINE.

To put this in context, Yahoo, who know a thing or two about ‘search’, can’t even get it’s search engine working properly. If you don’t believe me, see my post a wee while ago about Yahoo returning a link to the Times’ Cinema in Milkwaukee, USA when I searched for ‘cinema times’. Then read the post about the equivalent search working perfectly via Google. That’s just a worked-example of a real life problem I encountered. I’m sure there are a few good points to Yahoo. However, I, like a trillion other users, prefer Google, because, well, it works first time.

So to the ‘European Mobile Companies’ reportedly arsing around with making their own search engine, please don’t. Don’t bother. License Google or do a better deal with them and concentrate on what you’re mostly good at, voice and data to mobile devices. Of course, if they’ve come up with some astounding new way of archiving the internet, brilliant. Launch it and let’s get a look. But if it’s a second rate Vizzavi-wannabe, well…….


By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

6 replies on “European Mobile Companies don’t understand that they’re just data pipes”

Exactly. Bad odds: a phone company being innovative, nimble, and efficient enough to take down an industry giant in an area that’s not their core competency. Near zero odds: multiple phone companies collaborating to do so, even with a good partner.

Seems they could do a combined offer by bringing together Medio, Jumptap and Infospace, then they just need to hire sales team. They certainly spend enough on advertising and collectively they could build enough awarness.

I agree wholeheartedly that any mobile search needs to be very, very good.

The operators have the critical thing that makes mobile search and location services in general fly – location.

That’s the golden egg that Google et al don’t yet have, and want baaaadly. Without location, real context-based search is hopeless. Getting a result for a movie theatre in the next city is just as hopeless as getting one for the USA.

I live in a UK village which has 6 other identically-named villages competing for poorly-labelled mail and even the occasionally misguided cab. So if I want to use mobile search it needs to include not only the town but county as well as nation. As you often say, ‘arse’.

Cell-specific location info makes that minicab/pub/pizza/chemist/whatever search work for you where you are.

The cost of all this utopian mobile broadband, in particular the backhaul, is not cheap. Over the RoI cycle of mobile networks we are talking Bn’s, just for the UK alone. If MNO’s are to deliver this sort of thing, there has to be a return, and it’s not possible just by acquiring more customers from the competition. There is a fixed-price pie users are willing to pay (50M subs X £30/month or similar) sliced between 5-ish networks. Now you could argue that the networks could be run more efficiently, but I think the fat is pretty much all gone. If MNO’s are cash cows, then why do they get such a hammering from the City?

Why should MNO’s see revenue bleed to a US company with a funky algorithim? I’d prefer to see that profit put back into better networks and services here.

But, as always, it has to be done right. Given 600M subs, and the massive power of the MNO’s involved, why couldn’t they create or buy a smart, independant startup, with the brief to make the best mobile search app?

Gzino: ” Near zero odds: multiple phone companies collaborating to do so, even with a good partner. ”

If the service is white-label, operator-agnostic and works, what’s the problem with using it?

MNO’s can feed back demographics, location and other context info to advertisers in a way that Google/Yahoo can only dream of.

No-one’s going to accept a solution that ranks, say, an MNO’s Britney ringtone over the ‘natural’ #1 result for searching ‘Britney’. The neutrality of the solution is guaranteed because without it the solution is useless, and Google/Yahoo have won.

[…] When it comes to data and content services, mobile operators’ efforts are driven by control, whether it’s walled gardens or restrictive terms of service. In many cases, operators seek to lock things down and try to force, or at the very least, steer users to content and services from providers with whom they have a commercial relationship. In other words, users don’t get the best content, they get content that pays the operators the most. This sort of money-first, users-second mentality would seem to be one of the reasons operators haven’t been more successful at growing their data revenues. Slowly, this is starting to change, as some operators realize that to get people to use the mobile internet, they need to make it cheap and easy, and deliver the best experience possible at a fair price. But still, the desire for control lives on: a group of operators are now apparently hatching a secret plot to create their own mobile search engine to lessen their dependence on Google and Yahoo, two companies that have signed a bunch of deals with operators. The operators have been listening to all the hype surrounding mobile search — hype that’s nowhere near being justified — and think this is a way they can wring more money out of it. That’s a key point: they’re not doing this to build a better search engine, or one that delivers a better user experience; they just think they can make more money. Again, this is the tail wagging the dog. Improving the user experience and delivering better and easier-to-use services to customers will grow revenues. Building a user-unfriendly search engine that puts commerce over useful content won’t help, since users are resistant to paid search results. If a search engine keeps spitting out bad search results laden with pointers to things like content for sale, rather than the information users want, regardless of its source, people won’t use it. Of course, the operators have an easy solution to that: lock down the phones and make it the only search engine they can access. […]

Ewan, you say,
“Now, in order for mobile search to WORK, you have to have a rather good SEARCH ENGINE.”

You recognize that Google has the best “search engine”, and probably most people would agree. However who the heck wants to “search” when they are on their mobile?
When I’m on my mobile I want to “find” something, not “search” for it, don’t you?

The all powerful Google, Yahoo, and Msft are trying to impose their search engines on mobile users. Why?, because they can. There are alternatives, small companies with the technology to “find”, but so far have been kept out of the marketplace, by the “big boys” imo. Isn’t it possible that the Mobile Operators could license the “find” technology and “white-label” it as Mike (above) suggested?

You’re a “tech/geek” (that is a compliment) can you expand on this idea?
Or is it rubbish?

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