James Middleton

September 5, 2007

2 Min Read
Operators warned on handset deals

Research house Analysys has warned operators to tread carefully as they look to sign a new wave of deals with their handset suppliers.

The firm’s statement comes in the wake of unconfirmed press reports that Apple has signed up a clutch of major European operators for distribution of its iPhone – and that these operators have agreed to kick back ten per cent of related service revenues to the US vendor.

Apple has leveraged its loyal user community, which comprises high usage consumers of digital content, in securing the revenue share, a deal that Analysys argued is positive for the carriers.

“Even if the real details are never released, the upside for Apple’s operator-partners is substantial, given the Apple user community who download music, images, films, TV programmes and videos in a way no other community of users does. These users will quickly become passionate, sophisticated, high-traffic and high-ARPU customers,” said Jason Kowal, US head of Analysys Research.

But the research firm has warned that other terminal vendors will be looking to establish partnerships that will strengthen their own relationship with end users, a development that Analysys sees as a threat to the carrier community.

Nokia recently launched a portal, Ovi, that seeks to challenge the Apple download service. Its previous attempts at cultivating end user relationships, through Club Nokia, were effectively strangulated by the operators, which jealously guard their customer relationships.

Warning that smaller carriers in particular should approach future handset deals with care, retaining their key points of leverage, Kowal said: “Fortunately for mobile operators, there is only one Apple, and there are unlikely to be other OEMs that could demand or offer so much. However, other alliances may arise, possibly involving major players like Blackberry manufacturer RIM, Nokia (Ovi), or Google, which require careful observation. More importantly, operators should act quickly to improve the mobile internet experience on sustainable terms by more aggressively partnering with sources of content and software on their own. This will bring compelling applications to the handset on terms that keep the operator in the centre of the mobile value chain.”

 

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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