What’s that, a foldable iPhone you say?

I picked up this one from Wayne...

Is it time to subscribe to a printer service from HP?

Ever since my dad brought home an...

What’s the best way of buying a phone today?

How did you buy your latest phone?...

The joint mobile operating system: A risible idea

There is nothing worse in this industry than a mobile operator that thinks it knows what it’s customers want.

Time and time again, the market keeps on having to correct the mobile operator’s misguided attempts at trying to evolve beyond a utility bit pipe.

In this post, I’m going to explore that issue, culminating in explaining why the idea of a jointly created mobile operating system is absolutely ridiculous (and yes, as I will explain, this is precisely what Vodafone, Orange and a few others are mulling right now). So this is coffee-and-a-biscuit read, I think. I’d very much welcome your opinion at the end.

Are you sitting comfortably? Right, come with me…

There is perhaps one more thing that’s worse than a mobile operator trying to innovate in unfamiliar markets: It’s another utility provider, such as your local electricity provider, trying to sell you entertainment services.

Now, this generally doesn’t happen because electricity providers understand that they know nothing about entertainment. Instead they leave that to companies like Channel4, Endemol, Fox and NBC. Those specialists produce and commission entertainment content that is delivered over a multi-layer infrastructure platform manufactured by an array of hardware specialists such as Samsung and Sony. The end-consumption device is the television. Consumers plug in their televisions (powered by the electricity provider’s output) and enjoy the resulting entertainment.

At no point did the electricity company interfere with the delivery, style, substance, production or hardware beyond specifying that all devices must conform to a 220v range.

And we’re good.

The electricity company knows nothing about entertainment. Or user interfaces for kettles, electric razors, or anything else that runs on their utility. They just sell electricity. They don’t even bother marketing their services. I don’t see advertisements encouraging me to use my television for an extra hour per day. I don’t even think about my electricity consumption beyond a) paying the bill at the end of the quarter and b) trying to be ‘green’ and not leaving lights on unnecessarily.

Interestingly, I will never receive a flyer with my electricity bill asking if I’d like to upgrade my television. The electricity firm doesn’t try and sell me an upgraded interface for my television. They don’t suggest I get HD — that’s left to the content providers and hardware vendors. They don’t try and produce their own version of ‘The Wire’ or ‘Big Brother’. They don’t hire a series of young actors and try and produce television dramas. Nor do they sell me toast to go in my toaster or lightbulbs, electric toothbrushes, toothpaste or doorbell buzzers.

In some circumstances, my electricity company will expand it’s utility presence to offer me gas. Or perhaps water.

But they never try and sell me a kettle ‘to go with my water’, an oven or some cookery books.

They just don’t bother.

They recognise their responsibility, their DNA and their fundamental limitations. Their job is to make sure their production and delivery network stays live on a 99.999% (“five nines”) basis, respond swiftly and effectively to any outages, invest next generation electricity delivery technologies to augment (for example, the effects of weather or disaster) and to take their well earned profits.

I want my utility providers to make a bucketload of money. I don’t want their Board of Directors panicking about trying to counter Sony’s new Playstation or worrying about how to make me buy more sport content on my television. I want the provider to be able to burn £10 notes. Figuratively. I need them to be well fed, well financed and I need their CFO to encourage massive investment into assuring the supply of one of the key utilities I rely on. I want the lights to stay on. I need the cash dispensers to keep on working so I can get money to buy some food in Sainsbury’s to feed my young child. And I want to be able to heat my house precisely as I wish. Further, I want the company to be able to invest sufficiently at scale so that it is able to offer me service at reasonable rates. I want everybody to be able to afford to purchase a basic amount of electricity without it costing the Earth.

And that’s it. That’s what I want from my utility provider.

There’s the odd exception but generally speaking, especially here in the West, the model works really nicely for all utility providers and their customers.

A mobile operator is a utility provider of telecommunications services. Are we agreed? Fundamentally, a mobile operator provides voice calls, messaging services and data connectivity services. Through their utility services, it is also possible for them to function as a transaction engine, initially offering revenue to content providers (premium rate SMS/voice) and more recently, by offering other companies (such as mobile developers) the ability to transact with the provider’s customers.

Now, let’s take a look back at the emergence of the mobile operator.

The Utility Exception: Mobile Operators

In the face of unprecedented demand for mobile services over the past 20 years, our mobile utility providers have grown dramatically. In their formative years, mobile utility providers competed against each other to deliver better and better utility. It was simply amazing to be able to take a taxi from one part of London to another and be able to continue a mobile telephone call.

Later, the utility providers recognised they’d deliver greater utility by enabling interconnectivity, so I could call a friend using a different network.

Everything was working nicely as the utility providers continued to upgrade and strengthen their networks. Data services were launched. Text messaging as a utility service was ‘discovered’ and the medium exploded.

Customers were provided with financing in the form of an annual contract to enable the supply of ever evolving mobile ‘terminals’ or handsets.

Device hardware manufacturers sought to produce better devices. Continued innovation delivered hardware with integrated FM radios, MP3 players and even cameras. Consumers who purchased a device with a camera were delighted to be able to use their GPRS data network to take a photo and then email it to their friends. Granted, the transmission speeds were slow and the method expensive and charged ‘per megabyte’ (or, more accurately, per kilobyte!) by the utility provider. Some kind of charging mechanism had to be introduced and ‘per meg’ was — well, it was at least usage based charging, like the per minute structure.

The First Utility Provider Screw-Up

And then it all went wrong. Mobile utility providers became mobile operators. They decided they knew what their customers wanted. They turned into the electricity company trying to sell us toasters.

Their marketing teams went into overdrive and their technology teams introduced MMS (“Multimedia message service”). The idea? Duplicate the success of text messaging by taking the burgeoning send-photo-by-email facility and screwing it up. Instead of working out a global standard to send photos (and perhaps video later on), the utility teams over complicated it, over priced it and delivered an utterly shit service to their end users. Handset manufacturers struggled to work out the best way of integrating with ‘MMS’ and in the end, had to do their best to make their devices work with it. The result was a complete disaster with consumers being charged for messages that never arrived, or — even worse — did arrive but the size of a postage stamp (because the network ‘optimised’ the photo for the user’s handset). The medium never recovered until Apple arrived with an iPhone UI that made sending photos (and video) easy… By email.

So the same feature that some of us were experimenting with a decade ago is reintroduced by Apple to a hail of amazement. We didn’t reckon on the mobile utility provider’s ability to make an arse of the whole process.

The Second Utility Provider Screw-Up

The mobile utility providers were just getting started though. Can you imagine your electricity provider demanding that you only purchase a Sony television — and ‘locking’ the TV so that it cannot be viewed by your neighbours if they pop in for a coffee? Witness then, the utility provider deciding to buy millions of handsets from Nokia to offer to customers — but insisting that the VOIP facilities in the devices are deactivated (Here’s a link to a 2007 The Register article about this issue). The worry? Utility providers might lose a bit of revenue. Fast forward two years and the same utility providers are screaming for their customers to offload any and all possible data usage to WiFi.

The Third Utility Provider Screw-Up

It wasn’t long before the utility providers decided to launch all sorts of services for their consumers, simultaneously restricting them from using services delivered by competent specialists (e.g. MSN messenger). Witness, for example Orange insisting that all their Windows Mobile devices have Pocket MSN Messenger removed so that users can install Orange’s own sub-standard, useless and rubbish instant messenger service. Obviously no one bothered to use the Orange IM service and — from memory — the service was dumped quickly, in favour of the shiny MSN logo.

Almost every third party service introduced by a mobile utility provider goes nowhere.

It gets worse though.

The Fourth Utility Provider Screw-Up

It gets MUCH worse.

Now and again, ageing executives read inspiring articles in American business magazines and decide that, somehow, even though they’re a utility provider, they should reach beyond that function. They look at other fun companies operating in the technology space and think they can do the same.

Vodafone 360 is perhaps the best example — ever — of what happens when a utility provider thinks it can ‘do-an-Apple’.

In the same way that it’s ludicrous to consider my electricity provider supplying me a toaster along with weekly deliveries of bread to use within the toaster, it’s entirely unnatural for a mobile operator to reach beyond a basic transaction-led service oriented architecture.

In the case of Vodafone 360, the operator controlled every facet of the service, from specifying the Samsung hardware, operating system, handset user interface to the application layer. What happened? They produced a ‘service’ that simply didn’t work to spec. It was utterly shocking to see — a global billion dollar company, humbled and brought to its knees because of a functional inability to deliver beyond the company’s utility mandate. The people paying the price? The small number of customers duped into spunking their money on 18 or 24 months of 360 misery.

Like all utility provider experiments, 360 was hugely expensive, completely misaligned, poorly executed and woefully managed by a totally ineffectual team of senior executives. And, of course, it was quietly sidelined.

Yet another gazillion dollars down the pan funded by profits I willingly paid for their utility service.

The Fifth Utility Provider Screw-Up

Systemic structural change arrived recently to the world’s economy masquerading as ‘the financial crisis’. Not one of the utility providers saw a dramatic decrease in overall revenues. (Oh, revenues went down, but not in the same way they disappeared for, say, estate agents). Most mobile utility providers have actually done very, very well in terms of revenues recently. This, despite trying their best to innovate rubbish, irrelevant and totally misguided products and services in an attempt ‘to stay relevant’ and ‘beat Apple/Google/etc’.

Toward the tail end of 2010, the utility providers are still in rude health in the context of delivering utility.

Meanwhile as utility provider executive teams delight over huge sales of devices such as iPhones, they continue to obsess with what they see as the horrors of becoming ‘a bit pipe’ without seeming to notice that they’ve always been a bit-pipe utility provider that continues to make ridiculous amounts of money.

The fifth screw-up then, was the continual obsession of becoming something they are not and should not be.

The Sixth Utility Provider Screw-Up

It’s just about to happen, if reporting is to be believed — which brings me (finally) to the subject of this missive.

Telecompaper published a little article this week titled, “Orange to discuss joint mobile OS with Vodafone, others”.

Here’s a quick summary. Before you read, prepare yourself for the’ what-the-hell’ battering your neurons are about to receive:

France Telecom-Orange CEO Stephane Richard has invited the heads of Vodafone, Telefonica and Deutsche Telekom (T-Mobile) to Paris on 8 October to discuss the possible development of a common operating system for mobile devices. He told Le Figaro that mobile operating systems were the Trojan horse used by Google and Apple to establish their own relationships with mobile service customers.

Utterly preposterous. We don’t see electricity companies getting really, really REALLY frustrated by BSkyB or DirecTV for establishing a relationship with their customers. For good reason. It’s not their business.

Yet mobile utility providers seem unable to accept that they are .. well, utility providers. Instead of innovating utility to deliver a plethora of ways to enable services for Google, Apple and the rest of the market, they’re obsessing about competing with them.

The Telecompaper post goes on to explain that France Telecom’s CEO, Stephane reckons that since the four operators mentioned have almost a billion customers combined, they have the capacity to influence the industry.

They do.

But not in the way they think.

Network As A Service?

Can you imagine the potential of a mobile operator working WITH Google, Yahoo and an array of (reliable, well financed) startups to deliver network-as-a-service facilities such as advanced, ubiquitous location services? Can you imagine being able to track every piece of hardware you own thanks to your mobile utility provider? Can you imagine being able to switch on your car’s heating from your bed in the morning on a cold day, thanks to a combination of services from your mobile utility provider, Apple, Nokia, and goodness knows how many other companies in between? Wouldn’t it be brilliant to simply wave our mobile handset at the taxi and hit ‘confirm’ to pay for the fare? Wouldn’t be even better if Vodafone had deployed LTE Advanced to give us <6ms latency for a network-as-a-service real time taxi service auction the moment I come out of my city meeting?

It’d be great, but…


Unfortunately our utility providers are far too busy obsessing with irrelevant nonsense.

Time for some dodgy-but-workable-fag-packet calculations.

Assume that Vodafone’s 18 million customers each spend on average 25,000 pounds a year on all sorts of things — from meals to shoes to clothes to cinema tickets to food to rent. Work with me on this. 18 million people x £25,000 = £450,000,000,000 (that’s 450 billion). A year. Now assume that Vodafone can get 100% of their customers to spend that money via their Vodafone account with an NFC-enabled handset (work with me, here).

Now assume that Vodafone takes a workable 3.5% of revenue as a service charge. That’s £15.75 billion in revenue. To put this in perspective, that’s 35% of the Vodafone Group’s annual £44.5 billion in worldwide revenue last year. I know these numbers are made-up but they do indicate one possible future revenue growth possibility that involves transaction management (something mobile utility providers already excel at) and doesn’t involve arsing around with non-core things like device operating systems.

But no.

They’re off dicking about with operating systems, application stores and developer outreach programmes that reach nobody.

Meanwhile, in every mobile operator, there’s a small collection of forgotten Business-As-Usual departments working away feverishly trying to do their best with diminishing budgets. They’re trying to reduce network failures, sleepy cell towers and data speed delays. They’re trying — with limited senior management attention — to stick to the knitting and evolve their utility service as best they can.

I understand a heck of a lot of work is spent on business as usual activities within a mobile operator. But if only senior management time and the huge ‘innovation’ budgets were better aligned to delivering better utility…

I Dreamed A Dream

I often wonder what it would be like to be a customer of a mobile operator that invested heavily and singularly in providing really, really, REALLY good utility services.

What might that look like?

– They’d have ‘network-as-a-service’ API access to every part of their infrastructure
– Whilst every other provider was stuck on “3G+” speeds, our fictional operator would have already launched super fast Advanced LTE. But they’d have time to make it backward compatible.
– They’d have innovated their billing structures to eliminate customer confusion
– They’d have introduced support for 3 different NFC payment standards, before deciding on a clear-market-winner
– They’d enable me to pay for anything with my NFC-enabled handset so I’d start to pay people via my operator account and adopt the operator as my primary current account
– They’d have broken the silly standard network limitations with mobile numbers and devices, enabling me to have 10+ devices running the same phone number. And when I call out from each device, they’d all use the same phone number.
– They’d let people call my Twitter ID (by resolving that to my chosen device)
– They’d provide Google and Facebook super-API access into their network allowing their users to do amazingly cool things — and control their security absolutely and precisely. This kind of open can-do attitude would prompt most of the operator’s users to purchase multiple devices and additional service plan offerings (Yes, I would like a 10″ Facebook Gallery Frame running on my operator’s data network for an extra £4 per month. In fact, I’ll have three please.)
– They’d let me use my service plan(s) anywhere — absolutely anywhere. I’d pay a simple easy roaming charge integrated into my monthly bill — and I’d pay it monthly whether I went abroad or not. But when I’m abroad, it’s like the Kindle’s data connection: It works anywhere without any stupid bills.
– The operator would quickly become my trusted gateway to the planet, enabling me to easily and clearly manage my privacy settings.
– They’d have fixed or been close to fixing the ‘status’ issue, working closely with handset manufacturers and other third parties to continually innovate an interface and set of standards

But no.

Our mobile utility providers are off arsing around trying to do it all themselves. Badly. Again, again and again.

What do you think? Have I missed out some key screw-up stages? What do you think Vodafone or Orange might look like if they’d invested 90% of their expenditure on steady evolution of their utility service, rather than spunking it up the wall on stuff that simply doesn’t work? And what do you think of a 4-way mobile operator defined handset operating system?


  1. It’s a wonder how we ended up with the all these 3G networks all over the place.

    Didn’t read the full thing, but the joint operator handset OS is, I agree, risible. Is it anything more than rumor? Facebook phone would be in the same category, no?

  2. Ewan, over the top mate, not getting any sleep with Junior?
    Don’t let on to your partner but having a few days away Sans Kid, despite jet lag can actually be very restful…
    Oh and as for the article some good points well made, is it too late to start a mobile network?

  3. Whilst I agree on most points about the network operators wasting large amounts of money on expenditures that simply have not been thought with the consumer in mind, I’d like to play devil’s advocate and say: Japan. NTT Docomo. I-mode. etc.I’d like you to examine how the Japanese market worked, and compare it to the European model. Yes, they are essentially a separate market with different protocols (in your analogy, a completely different type of electrical pipe frequencies), but we’ve previously (if not now) considered them to be somewhat technologically ahead, more connected in their own walled ecosystem.

  4. I know from experience there are a bunch of good people within the employ of these operators. They get it, they see the value that they can add to Android, Blackberry, Symbian, and even iPhone. The developer outreach programmes whilst not always hugely successful, are not wasted time & money when they are genuinely engaging. There are even some well delivered network APIs being embraced by developers in the UK. You can spot these MNO minorities, they wear good jeans & shirts, and talk with the knowledge and confidence of people who read well beyond the feel good bullshit corporate daily news feed. Sadly, they are a small minority.

    Above them are the “C” level executives, in their expensive suits and their chauffeured cars, reading the FT on their way to and from London City Airport. These people are idiots, they’re stuck in the 90’s thinking that they own the customer and the right to control their mobile internet experience. They dictate strategy they figured out over lunch at some miss informed €2,400 two day jolly in a hotel, no doubt hosted by experts like IIR and Informa.Now these same executives have finally woken up to the fact that Apple and Google have already eaten tomorrows lunch. So best convene an extra special lunch in Paris tomorrow so they don’t go hungry.

    I wholly support the argument above, Operators so called Internet Services departments should stop trying to re invent the wheel and actually deliver the internet services users want and hey, actually use.I am not going to list the number of ways that MNO’s can actually enhance this with apps and mobile web services, the Operators can come to me and other devs to buy the ideas…

  5. Ewan, spot on. I still can’t figure out why the carriers are not going after mobile payments. With premium SMS they tried to take 40% to 50% and it bombed. Imagine if they would have just asked for 5%?

    Now, in the U.S. TMobile is trying to initiate a brand new SMS tax to all aggregators utilizing the short code system of $0.0025 per message. This increase on already their most profitable sector of their business. Why? Because they can.

    Problem is, already one entity, Cha Cha, has openly declared that if this happens they will no longer support questions from TMobile customers. I would assume others will quickly follow suit. Isn’t this biting off the hand that is feeding you?

    Simply put, I have had a hard time understanding the carrier’s rational for their business decisions. I am quite certain these companies are being run by highly intelligent folks. I just can’t understand their rational for short term cash over long term profits…

  6. Advocating a race-to-the-bottom price-wise — and that is what saying ‘Be only a dumb bitpipe’ advocates with these price-oriented consumers — is not exactly what operators like to hear. Operators want to be growth stock, not utility stock.

    Your ways in which they could try to be not a dumb but better bit pipe have, um, issues. Your roaming proposal alone is completely unworkable in a world where users expect unlimited mobile data and foreign operators are wholesaling minutes and kilobytes to each-other in unsymmetrical amounts. Your NFC proposal would end up subjecting operators to banking regulations in god knows how many countries. I do not even want to think how much regulatory red tape would have to be cut to open up the network with APIs or innovate infrastructure standards unilaterally. (Backward compatible single-country LTE in advance of everyone else? The handset production runs would be tiny, thus expensive, thus 3 fanbois only buy who then trash it online for being a gen 1.0.)

    Trying to own the customer through their phone book and device subsidy is really the lowest hanging fruit they can pluck.

  7. It was over a decade ago that Vodafone & entertainment giant Vivendi launched VIzzavi in the midst of the .com+WAP bubble. Unsurprisingly, there was plenty of similar astonishment at the time. (“Rubbing shoulders with pop stars when you should be building base stations?”)

    But, in the same year, Google was about 18 months old, and had little more than a search box, a bad logo, and a simple algorithm to their name.

    If you had told me that 10 years on that *they* would be producing mobile operating systems, branding phones, competing with Nokia, Apple & Microsoft – not to mention running TV services – I would have scoffed too. (Especially, as a search utility, they’ve continued to deliver.)

    So why can some utility companies grow well beyond their core brief and continue to be massively successful in hundreds of (let’s be honest, often orthogonal) ways? Why shouldn’t network operators aspire to transform their businesses in similar, radical ways?

    We all know they mostly don’t have it in their DNA to pull it off, and of course they’ll fail trying. But answerable to shareholders in a capitalist society? I think you have an obligation to try to evolve and explore new business models. You seem to be advocating some sort of soviet central planning system which has had all the Darwinism squeezed out of it.

    So everyone knows Nokia was still making rubber boots in the 1970s. But Vivendi? They were a French water utility.

  8. The only place this strategy or model even has a hope of getting off the ground is in china. With its closed infrastructure, locked down, fire-walled environment. But even the launch of various app stores get only 5-25% usage at best in the height of their popularity. China mobile 3g TDSCDMA development platform has not really gone anywhere, nor has china unicom’s to block apple’s appstore on the iphone in favor or their own app store. Good Article Ewan as usual. Thanks.

  9. it works in japan as everyone is speaking the same language, and the culture is technologically curious to adopt and embrace the latest whizz bang tech, whilst the luddite west thinks texting is cool. The japanese will take great care to read manuals and details of the product, before using it, whereas western society dislikes reading, and prefers to open the quick start manual.

  10. Once again, your humour is the stuff of legend 😛
    Had quite a few laughs while reading it but you made some very valid points. The example of the NFC payment options is a brilliant idea and really, could and should be done, if it weren’t for the the operators “dicking around” as you so aptly put it.

    I’ve been wondering for quite some time why operators meddle and invest so much in crap offering like the bloatware they stuff the phones with and the arse-backward way in which they try to lock and curtail mobile phone capabilities as opposed to making their services better and more desirable.
    Valid points all of them and much appreciated read. Think I’m going to mirror it on the blog I write at.

  11. Google ACQUIRED a company that had started an OS already. They didn’t have that expertise at the time. It’s not that they can’t grow out of their core brief as you put it, but more that they’re highly unsuited for such a task.

    As of yet, no single company has come like a bolt out of the blue to produce anything truly lustworthy in the mobile sphere. NONE

  12. Does it matter if Android was bought or built?

    We wouldn’t begrudge a network operator buying or merging their way into a different guise or business model – IF it worked.

    Ewan’s post should be about trying to understand WHY operators fail so badly at making these evolutions work. Public service cultures? Standardisation mindsets? Not bold *enough*?

    But no-one should order them to stop trying.

  13. Fair point, but I’d think it a better bet doing things they’re already good at while feeling out new areas as opposed to jumping gung-ho into ventures they’re not particularly adept at. Wouldn’t you?

    In 2 years I’ve not seen any significant improvements in the services, innovative or otherwise offered by the mobile operators. Have you?

  14. Cop out! 😛
    I don’t do that either but I’d love if they were to step their game up and make my life that little bit easier.

  15. It’s great that we generally have 3G data networks. It’s rather annoying
    that I don’t get 3G data here in Richmond-Upon-Thames on the Vodafone

    3’s service is excellent. o2’s is non-existent, Orange is patchy and I
    haven’t tried T-Mobile. Arse.

  16. Fai, I most definitely admire what the Japanese market is doing, however do you think it’s accurate to compare them vs European/American operators?

  17. Do you think we need to wait for another generation of executives to retire and the next generation take their places at the helm before we see real movement and excitement in the marketplace, Dominic?

  18. An editor would have boiled it down to 6 paragraphs. I most definitely see value there. However the majority of readers who email me regularly (it’s to those I talk with regularly that I customise the output) prefer the longer missives!

  19. NFC was just an idea Jonf.

    I’ve no issue with innovation, provided it works — or it’s marked as beta and the market helps develop it.

    You’ve made me think with Sky. And your point about making outstanding products that people want to buy is very, very well made. I think that is the crux of the issue that prompted my diatribe. I’d like to see operators make brilliant, brilliant utility services first — then innovate in other areas *properly*.

  20. That’s an excellent example of the mindlessness that goes on, Giff. Dear me. If they’d made it 5% one imagines it’d have become a hugely popular payment mechanism for millions 😐

  21. Stop bitching? Sorry, you must be new, Vincent?

    What’s absurd about a mobile operator being compared to an electricity provider?

    Is a mobile operator effectively the same as a landline utility provider? And isn’t that the same as an electricity utility provider?

  22. It’s interesting how two people can read the same article and form diametrically opposite impressions (OT, this also happens when watching my local football team).

    My impression of the thrust of Ewan’s argument was that mobile providers would be better off improving the utility so that third parties can leverage new features to provide innovative services for the entire user base – rather than trying to introduce end user services themselves which often miss the mark. I don’t see how you can imply from this article that Ewan is calling for operators to focus on the top end of the market.

    In general I’m in agreement however I think it’s important to emphasize that Ewan’s alternative is no less challenging to implement technically or commercially. Many of these developments would be more likely to succeed (I hesitate to say ‘require’) if the operators were to work together to ensure interoperability particularly on the service provider side. That said if the new capability was attractive enough I have no doubt service providers would just deal with implementing different interfaces for the different operators.

  23. Possibly, but there is always the danger with companies like this, that the smart and innovative are seen as too disruptive to be put in to the most senior posts. Thankfully the good salaries and conditions keep many smart people on board. The future for Operators is collaboration, the way Orange and Huddle are working together in the SME space is a good example. I tried advocating that Operators should focus on where they can add value to existing platforms and services rather than try to compete directly, and that didn’t end well. I do see some progress in strategy having recently met with the big UK MNOs to discuss the droidcon London event. But as always, it’s too little too late.
    European mobile telcos have had it far too easy, I really want to see a new player come in to the market here with a bang once the unified EU spectrum auctions are happening. The incumbents are all focused on parity with each other and cannot design a decent service themselves, never mind an entire OS. I could go on to draw comparison with OEMs differentiation strategy on top of the operating systems but that probably warrants a post on it’s own 😉

  24. Vodafone acquired ZYB which most likely formed the spine of the 360 offering, I do wonder if ZYB had launched as a more mainstrean product people would have been more forgiving as the expectation would have been lower than a service offered by the “Vodafone brand”

  25. Craig, the only reason I mentioned those two was to illustrate examples. The list of silly operator ideas is very long indeed and not restricted to Voda or Orange.

  26. My expectation of a Vodafone service like 360 was actually very high.

    Zyb was looking really, really interesting when it was an independent. If they’d stuck more to their concept and allied it nicely to Vodafone handsets, I think it could have been brilliant.

  27. Generally agree — lots of good points. But…

    1) Here in the US the ISPs and telcos *are* making lots of money. They are monopolies or effective duopolies who make fat profits and then don’t reinvest enough. They have a gentlemen’s agreement to keep things shitty for consumers, but keep prices and margins high.

    2) Do you really think the telcos could handle payments properly? I’m not so sure. They seem to have an absolute inability to provide good user experiences. I’d bet more on banks or ISVs with mobile apps cracking the mobile payments issue.

  28. Actually operators could have a look at their subsidiaries operating in developing markets, particulary Africa, to find good people. There operators have implemented basic infrastructure that hadn’t any (in some area they bring their own power stations), launched innovative billing options (like MTN with dynamic billing based on location & traffic), offered new ways to use their billing system (like mPesa in Kenya and it “banking for the unbanked” system), while fighting for market share with razor thin margin. Oh and they did not pervert market dynamics with heavy device subsidies and exclusive handset deals, but instead focussed on sourcing large quantities of chinese handsets to offer them at very low cost to users. Heck I might even go so far as give the nobel prize to one or two operators there ! They are not perfect, but at least they are trying to do their job right.

  29. Excellent issue, Rurik. I didn’t factor that into consideration.

    I think operators are pretty good at managing payments, are they not? The splits to content providers are usually ridiculous but it does work?

  30. “They turned into the electricity company trying to sell us toasters.”

    Historically, the electric companies did promote or sell toasters and other appliances. They needed more appliance owners who would then become new or bigger customers for electricity.

  31. Well speaking of utilities maybe you should have a look at those “smart meters” being rolled out everywhere by power cos and giving acces to internet services to help you control consumption, but also remotely cut power and track your energy usage. Sounds like a first step towards “value added services” from power companies, next thing you know we will all buy iMeters from a certain fruity company 😉

  32. Ewan, are you kidding us? I can’t believe you don’t know why mobile telcos are still trying to bring *shiploads* of mammoth meat to cave (or you call it arsing around with services), while nobody behind electricity utility expects them to bring more then few %% of ROI. I refuse to believe you dream about universal happiness once industry get mature, all this arsing around of ROIC goes down, everyone settles for slow income and… yes, you have to go find yet another fruity company who will turn your dreams about NFCs and LTEs into life – at the expense of *shiploads* of £££ from your pockets. I’m sorry to be Captain Obvious but you had been begging for that.

  33. On the paper leaving NFC to operators seems quite logical but it has briought too many parties in the loop: telcos, banks, merchants, device manufacturers and SIM manufacturers (since GSMA mandates apps are stored there). As a result NFC is stuck in an endless loop, everybody is waiting for the next party to deploy its part of the infrastucture to start working on its own. Only solution is to cut some parties out, easy targets being telcos & SIM manufacturers. Let’s just wait for Steve and his next magical contactless device, and we will have NFC services everywhere in no time.

  34. I’m sorry to say that you’re absolutely right Jerom. Apple have already
    patented the ability to buy a concert ticket on your iPhone and then use it
    at the venue.

  35. It is not unrealistic if the phonebook, well, the connecting and messaging software on the front end, was innovated on in was that, as another commenter said, people really want. There is room there to do things that only an operator can, but it involves overcoming some of the hurdles Terence pointed out and opening the network stack to front end software in ways that are just hard right now.

    And that’s pretty much all I can say without violating my current NDA. 🙂

  36. We could look at it another way: what are the Japanese doing right (or wrong), that the Western hemisphere are doing wrong? and why shouldn’t we compare them to the European/American operators? They are after all, a market with a number of different operators, taking slightly different approaches, but nonetheless the consumers seem to be happy with their selection.

    In an odd way (if you can follow me on this one) they are more similar to the American (and China) method of operation where each of the operators are broadly incompatible with each other, so what is it that separates them? Is it the differences in greed, or the desire to innovate (or both)?

    If you wanted a more apple to apple comparison, then there is the rest of Asia to compare to where they are broadly GSM (apart from a few spots like South Korea), and where the effects of them adding value can be compared to Europe. (A peek at the special add-on lists of a typical Hong Kong network like Three will run on and on…)

  37. That’s just stereotypical thinking at its finest! You forget the Japanese can be tremendously conservative in their thinking too – and what’s not too say the middle age group aren’t as ludditistic as everyone else around the globe? Plus I thought most people in the UK speaks English.

  38. I get more 3G HSDPA reception here in my nice little spot in E14 than anywhere else in Central, but that’s absolutely pointless when I already have access to WiFi everywhere here, home and business. What’s more important is having 3G when you absolutely need it outside the home – someone really need to tell them operators to get their priorities right!

    Seriously what hope is there for the £100m collaborative Boris plan to get mobile telephony access in the Tube when they cannot get Central right?

  39. Spot on Jerome. The emerging markets are brilliantly innovative, $50 Android handsets are going to deliver the best of the internet on top of the indigenous payments structure and spur a new era of progress. Vodafone are very active in Africa encouraging mobile entrepreneurs in partnership with the Web Foundation. Sir Tim Berners Lee has a hand in their projects flying the flag for an open internet.

  40. The scenario is valid where operators sell network locked devices and subsidise those devices. In open market (Like India) network is currently just as a service. End user can buy any device and start using it on the network of hos/her choice.
    For that (Network as service) to happen gloablly there needs to tough competition, very huge market, and Customer Demand for netowrk as service, say in US if some one wants to buy iPhone they has to be with ATT service; but if because of ATT Service clubed with iPhone or vise versa the Customers don’t buy the product then both Operators and Device Manufactures has to think about the way they are working.

  41. Ewan,

    Some interesting points. Interesting parallel with the energy companies, but it breaks down because they used to provide appliances.

    Maybe 20 or so years ago, both Norweb and Manweb not only supplied appliances, but they both had a network of shops. As far as I can remember, they didn’t go so far as to rebrand a Hotpoint washing machine as a Norweb 120, but crucially they did offer finance (cf. mobile operator subsidy).

    A couple of other points in the operators’ defence…

    It may seem obvious now that Facebook is the horse to back, but just a couple of years ago it wasn’t so clear. Worse, for someone like TMO or Voda or Orange, you had the situation of different providers being predominant in their different markets. And these were startup companies. So your proposition is that the operators give quite deep access to their subscribers to a number of young companies? That’s a recipe for some major data management issues. Even today Facebook’s attitude to data leaves a lot of people uneasy; imagine if they had access to the data my operator holds?

    The operators work within a heavily regulated environment, so even if they were pushing for what you describe, which I don’t claim they are, it would be a struggle for them.

  42. Ewan,

    it’s our fault.

    Years ago, we educated the operators that we would pay a premium to send one message. The operators couldn’t believe their luck, and SMS became a huge revenue stream for them, to be protected at all costs. Worse, it shaped their thinking that they should provide value added services, since SMS was so popular, then of course consumers will want operator IM etc.

    Hence the notion of becoming a fat dumb pipe is so unappealing to operators.

  43. Great piece Ewan.
    IMHO As long as consumers are lured into subsidised handsets, operators will keep an extra leverage that (to my knowledge) is unlike anything in other utility markets. Getting friends to understand the upside of a sim-only lifestyle is very hard, simply because of the cash flows involved. Yet I’ll keep trying, and hopefully others will join in.

  44. I very much appreciate your perspective, Truss — you’re entirely right in the context of mainstream media. In the context of MIR, we have a slightly different approach to the standard house styles 😉

  45. As the former head of a major VF’s apps business, I couldn’t agree more. It is just not in a MNO’s DNA to be fast moving enough. Vittorio needs to stop all the crap and get focused on being the best utility at cash generation and profits. Look at the debacle at VF trying to launch IP Centrex in the UK! Waste of cash!

    One thing that mobile companies are good at that your standard electricity supplier is not: marketing. In reality MNO’s are good at shift thousands of units a month through their retail stores, sales people and online. Generally, they are impressive marketing behemoths.

  46. If they can indeed produce a nice new mobile operating system, then certainly! Wouldn’t you? Competition is what keeps most of the world economy going.Of course, it almost inevitable that they will fail. A clubby consortium does not seem like the right petri dish to take on bloody-minded Bay Area innovation. (And having that ability to exert default control over billions of naive users does not suggest that the protagonists will gravitate towards a philosophy of meritocratic brilliance anyway)I’ve seen enough similar announcements & efforts come and go: search engines, app stores – even operating systems. But they should definitely be allowed to try.If they squander users and go bankrupt trying, then that’s great: proof that capitalism works 🙂

  47. Has anyone asked the customers what they want? Another confusing acronym in the phone shop that effectively means I can’t do the same thing as my friend is surely not top of their list.

    I like the comparison to the electricity suppliers, but also like to compare them with AOL 5 years ago. Similar attempt to control everything which drove people elsewhere – lock downs, walled gardens, proprietary services are not what the customers want, and therefore not what they will pay for in the long term.

  48. An interesting read, and i agree with pretty much all of it. Your idea that really struck me though was the multi-sim/device issue. Why aren’t the UK networks jumping on this and pushing unified messaging?

    O2 provide my mobile voice & data connections, my fixed broadband and if i wanted them to my home phoneline; so appart from a small triple-pay discount benefit why aren’t they offering some service benefit? Why can’t one number get me anywhere? Why can’t i control presence at a network level? Why isn’t there an O2 powered VOIP service that keeps me connected at my PC/netbook/tablet? Why not a unified voice mailbox? and therefore unified billing?

    What would be a simple, life changing & a valuble service for the customer would indeed be a headache for a network to perfect, but if they don’t do it soon Google will, taking away not just the customer relationship but my mobile voice minutes too.

  49. Unfortunately I do not make it up. Recently saw a presentation on internet services from a major telco, struck me as being exactly the same stuff I had already seen 2, 5 or 10 years ago. “Content revenues key to compensate voice decline, “customer ownership”, “convergence”, “home screen access”, “unique experience”, “sell video, games, music” etc. plus tons of estimates from a report stating that if operators do not do VAS they are all going to die (or get leaner, not necessarily a bad thing).

  50. I’ll tell why that happens: Because all these companies know that – sooner or later – they are doomed to extinction. Give people proper internet connection (wifi/3g/4g) on their devices and they will start kissing mobile calls goodbye, turning to skype and other VOIP services for calls (Apple’s Facetime will help this). And they know this very well, hence their need to go into other markets and not restrict themselves to providing phone coverage.

  51. The Facebook Phone, gawd. I cannot tell you how dumb that idea struck me before everyone clarified it was a co-operation with a handset manufacturer that already had a channel. I have worked in an MVNO in the US, and saw it go down in flames for very specific reasons: no matter how brilliant your device, if you do not get into operator stores or really mass-market retail you cannot get the phone into people’s hands. Facebook is a niche player in that regard. I could write pages on it — I probably should.

    No, I would not work on a non-manufacturer, non-operator making its own phone. Not unless someone answered some hard questions for me first, or it was pure free-lance. I can only be associated with so many failures.

  52. Two words Ewan – Absolutely Brilliant. I could add another two words, too, Spot-On!

    Let’s all repeat after me – “Operators are not media companies, no matter how hard they try, because they are fundamental structurally and strategically unable to do so”. Anybody who argues otherwise is really kidding themselves.

  53. Two words Ewan – Absolutely Brilliant. I could add another two words, too, Spot-On!

    Let’s all repeat after me – “Operators are not media companies, no matter how hard they try, because they are fundamental structurally and strategically unable to do so”. Anybody who argues otherwise is really kidding themselves.


Please enter your comment!
Please enter your name here

Recently Published

What’s that, a foldable iPhone you say?

I picked up this one from Wayne and Qianer over at The Information earlier today and it prompted me to reach for Mobile Industry...

Is it time to subscribe to a printer service from HP?

Ever since my dad brought home an HP LaserJet printer (version 3, if memory serves), I have been printing with an HP. Over the...

What’s the best way of buying a phone today?

How did you buy your latest phone? I'm asking because I'm thinking about what I should be doing. When I was living in Oman, I...

MWC: What device highlights did you miss?

So, early last week I predicted that next to nothing from Mobile World Congress would break through into the mainstream media. I was right,...

How Wireless Will Pave the Path to Neobank Profitability

I'm delighted to bring you an opinion piece from Rafa Plantier at Gigs.com. I think it's particularly relevant given the recent eSIM news from...

An end of an era: Vodafone UK turns off 3G services

I thought it was worthwhile highlighting this one from the Vodafone UK team. For so long - for what feels like years, seeing the...