a week in wireless

Does my bottom line look big in this?

The world’s favourite social butterfly, Facebook, finally made its Wall Street debut Thursday as the IPO process got underway. Although it was to be expected, at $38 each, the shares still seem ridiculously overpriced. Legal advisory firm Magister Advisors explained to the Informer that Facebook needs to make ten times more revenue per year than it currently is making, and hit annual figures of between $30bn to $40bn, in order to provide value for that price. The site may be the internet’s equivalent of crack, but making this much money is still a tall order.

What makes this task more difficult, is that people just don’t click Facebook ads. That’s not just the view of the Informer, rather a survey by digital marketing agency Greenlight reveals that 44 per cent of respondents said they would ‘never’ click on Facebook sponsored ads. So how else can it hit those targets? One strategy appears to be to milk what it can out of its more insecure members – for which, the Informer notes, the network is not wanting. Facebook is trialling a ‘pay per post’ concept, which will put subsidised status updates higher up in their friends’ timelines. A bit like paying someone else to borrow the DJs microphone at a house party.

And the challenge of getting more money out of customers is one facing operators globally as well, particularly when it comes to trying to grow revenues in line with a surge in data traffic. The conundrum facing them all is: How do you make your customers think they’re getting better value for money? One way to do it could be offering shared data plans, at least that’s what Verizon and AT&T are hoping.

Shared data plans will allow multiple devices owned by an individual, or members of a family, to draw data from a single monthly allotment. The move is one of the first examples of innovation in data pricing and Mike Roberts, principal analyst and head of Americas at Informa Telecoms and Media, said that a precedent has already been set in the US with shared voice tarriffs already on the market.

He reckons it won’t be long before shared data becomes a key offering for all US carriers, but they need to address is how to move from individual to shared data plans in a way that would help, rather than hurt, data revenue margins. Sprint Nextel on the other hand, told the Informer this week that it intends to stick to its guns and continue offering its all-you-can-eat plans.

The Informer can’t help imagine that maybe the folks at Intel have all just had a Mel Gibson-like experience – no, not by getting drunk and throwing a foul-mouthed tirade at reporters, rather more like that film in which he began hearing people’s thoughts, but this time listening to “What Operators Want”.

Herbert Weber, EMEA marketing director for mobile and communications at Intel, told Telecoms.com that the firm has struggled with winning market share in the mobile space because it didn’t understand how operators’ businesses worked. It has since taken the time to understand the nuances between the PC and mobile business models and has adjusted its offerings and features accordingly to appeal to operators and consumers alike.

Perhaps now the chipmaker has finally understood how to provide  handsets that say: “Yes”, when operators ask: “Will my bottom line look big in this?”

LightSquared on the other hand, is looking decidedly underfed, having not yet filed for bankruptcy, but filing for more time before declaring bankruptcy. The Informer wonders whether the firm will ever be asked to submit its assets, which is really just some unusable spectrum. Founder Philip Falcone would probably get more value from selling his old ZX Spectrum.

In France, Free Mobile ruined the other operators’ party by launching low-cost services that undercut all of its competitors’ offerings. And now, it’s bragging about how well it’s done it.

The operator has managed to acquire nearly four per cent of the country’s market share in just 80 days; it said during its first ever quarterly results announcement that it had acquired 2.6 million mobile subscribers by 31 March 2012. This was at the expense of its rivals. SFR, for example, admitted that it lost 620,000 mobile subscribers in the quarter. Orange France lost 615,000 mobile customers.

In the age-old marketing trick of giving celebrities, media personalities or sports personalities free things and taking pictures of said stars using them, Samsung has decided to give limited editions of its new Galaxy SIII handset to athletes at the Olympics to show off their mobile money services with Visa. The handset is “The Official Olympic Phone,” just so you know. But what exactly is an official Olympic phone? The Informer understands the concept of official sporting event merchandise, such as the official World Cup football, for example. It lets kids in the playground pretend they’re Messi or Rooney playing in front of thousands of fans. Is Samsung hoping kids take to the playground to re-enact the LOCOG committee phone calls with Boris Johnson? Maybe a new playground game of taking minutes of meetings using the device’s office software will catch on. Or maybe they’ll use the mobile payments functionality to buy burgers. Or maybe, just maybe, “official” and “Olympics” are valuable buzzwords that the Korean firm’s marketing team hopes will help stoke sales.

Also in the UK, O2 is playing a tease, and seems to be caught in a bit of a love triangle with Ericsson and Huawei. The operator has just chosen to entrust the planning and managing of core transmission, mobile access and core network build, to Huawei marking the first major managed services deal for the Chinese firm in the UK. Ericsson, meanwhile is left heartbroken as it has spent years in O2’s friend-zone, it has had a long-standing agreement with Telefónica to supply field maintenance services, but had also undertaken a core network modernisation initiative on some parts of O2’s UK network last year. Now though, Huawei will likely be managing a lot of Ericsson kit for O2.

In devices, research firm Gartner has revealed handset sales have declined for the first time in three years. Global unit sales reached 419.1 million units in the first quarter of 2012, with the two per cent decline being more than expected and attributable largely to a slowdown in demand from the Asia Pacific region.

For those that are buying however, Android retains its lead position as the most popular smartphone OS, with HTC and Samsung dominating the market between them. According to handset sales statistics released by research firm Kantar Worldpanel ComTech, Android’s global market share for the three months to April is just over 50 per cent, up from 44.6 per cent last year.

And finally, Japanese operator NTT DoCoMo has placed an offer to acquire all shares in Italian mobile internet content and apps provider Buongiorno for €224m. The bid has already gained partial acceptance as Mauro Del Rio, owner of approximately 20 per cent of the company’s stock, has entered into an undertaking with the operator’s German arm, DoCoMo Deutschland, to tender all of his shares for the offer.

Take care for now

The Informer


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