Vodafone: Ovi no threat, let’s work together

Leading international operator Vodafone has said that it is “not necessarily hostile” to the emergence of vendor-led portals such as Nokia’s recently announced Ovi project.

Some handset vendors have long harboured a desire to build deeper relationships with end users, with Nokia at the head of the pack. The Finnish vendor tried once before to establish a portal – Club Nokia – selling ringtones and simple visual icons. The firm retreated from the space, however, shutting the portal three years ago as part of a strategic move to improve relations with its carrier customer base. It was widely felt that operators had resented Nokia’s move to bypass the carrier/consumer relationship.

But in the last three years, operators own content strategies have evolved to see their desire for all-out control of the content value chain lessening. “Vodafone has already announced a marked move away from an operator controlled walled garden into very explicitly supporting open mobile internet experiences and working with a multitude of partners: internet players like Myspace, Google Maps, eBay and Youtube,” Jens Schulte-Bockum, global director, terminals, Vodafone Group, told on Monday.

“We’re not necessarily hostile as a matter of principle to the [idea] that vendors like Nokia implement relevant services on handsets and make a contribution to this openness and this emerging space themselves,” he continued, adding: “We’re discussing that with Nokia. I can’t go into a lot of detail but the end game that we’re working towards is one that I would describe as mutual openness and peaceful co-existence.”

Gartner handset market analyst Carolina Milanesi argued that the demise of Club Nokia in 2004 was principally a matter of timing. “We were at a different time in the market place as far as services were concerned,” she said. “It was very early stages and the operators had much more power then than they have today.”

Developments like Ovi, Milanesi suggested, are less acts of aggression on behalf of the vendors than they are defensive manoeuvres. Vendor margins are under pressure from bargain-driving operators, which are also turning to own-branded handsets – a move into the vendor’s territory, she said. “It’s the operator putting pressure on the vendor and the vendors looking for a different way to deal with their issues. And one way to look for other revenues is to enter the services space,” she said.

On the topic of operator-branded handsets, Schulte-Bockum told that Vodafone believes it to be “quite feasible” that between ten and twenty per cent of its handset portfolio could carry only the Vodafone brand in the medium term, adding that “we haven’t officially formulated that as an aspiration.”

Speaking at the Ericsson strategy and technology summit held in London on Tuesday, Miles Flint, president of Sony Ericsson, played up to the suggestions of vendor-developed services as a defensive, if not complementary, strategy.

Flint was very keen to stress that the company’s focus was on working with the operator community as a partner and not, as he put it, “making things difficult” by introducing potentially competitive services. “We’re all about making phones, we won’t be separating software and services revenues out,”  like Nokia is intending to do with Ovi.

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