Last week Hutchison 3G held a major launch event for its ‘X-Series‘ initiative, making a clear statement to the industry that it intended to turn away from convential price plans and its previously restrictive policies of limiting internet access. Instead, Hutchison will embrace an open access model across its Three networks, allowing users to pay a flat fee for accessing web services and removing the ‘garden walls’ which have prevented subscribers from visiting web pages outside the operator portal.
While certain operators around the world have already been flirting with a similar model – T-Mobile with its Web ‘N’ Walk, for instance – Hutchison has scored a marketing coup by trumpeting its plans as a key strategy change. As a ‘greenfield’ operator with no legacy business to canabalise and a network rich in capacity, it can afford to embrace a new approach to pricing and service delivery without the same fear of investor backlash that constrains the likes of Vodafone, Orange and other operators who have large institutional shareholders.
More importantly, it has also lined up a dream team of partners to deliver popular web services for the X-Series: Yahoo, Google, Microsoft, eBay, Skype, Sling Media, Orb Networks, Nokia and Sony Ericsson. To quote Three, the X-Series represents: “TV, home PC and all the best of the web on your mobile.”
It is no small feat for Hutchison to have brought all of these partners, often competitors in their own fields, to the same table. This has been achieved because Three has worked closely with them to ensure they can provide a user experience which is integrated with their existing businesses, familiar to users and priced sensibly – i.e. flat fees for unlimited monthly usage.
While many operators in the mobile industry are still relying on the size of their customer bases and their ownership of the billing relationship to ensure long-term growth in data services, Three has woken up to the uncomfortable truth: it doesn’t matter how many voice and text customers you’ve got if you’re not capable of marketing new services to them. Companies like Google and Skype have active networks of passionate subscribers who rely on their data services. As such, they are an incredibly powerful ally in building a mobile data business. Quite simply, customers are more likely to want to mobilise their existing services than commit to new offerings from an operator they associate with voice calls.
The result will be two-fold: Three’s approach will attract the savvy, active data users who are keen to extend their digital lifestyle applications into the mobile envirionment. In doing so, it will be able to leverage network effects to cross-sell additional services to these customers and increase basic communications usage. Secondly, Hutchison will potentially change the dynamics of its revenue stream. Voice and text will become true commodities and the flat-rate subscription pricing for data services will allow it to break the ’25 percent’ ceiling which seems to cap data as a proportion of revenue for most other operators.
It was interesting to see Hutchison taking this approach just a couple of weeks after my article entitled ‘Why value is slipping away from the operators‘. I have since had private conversations with several major European carriers who are looking closely at their long-term role in the industry and how they can profitably evolve from service provider to service enabler. This will be a major theme at our next MEX conference in May 2007 – now is the time to get in touch if you’d like to be involved in the debate.
Nokia’s solution to the ‘bit pipe problem’
In related news, Nokia Networks today announced a product which enables operators to more effectively manage peer-to-peer traffic on their networks. The Nokia Peer-to-peer Traffic Control is an extension to its Flexi Intelligent Service Node, allowing the carrier to control the allocation of bandwidth to P2P services, either limiting or releasing more capacity for applications such as file sharing and VoIP depending on its management policies.
In an attempt to cash in on the current debate around the fate of operators as ‘bit pipes’, Nokia is promoting the product as a ‘solution to the bit pipe problem’. It remains to be seen how many customers will use this to constrain P2P bandwidth and how many will rely on it as a management tool as they open their networks up to more third party services.
Sony Ericsson enabling web services on UIQ
Fresh from announcing its acquisition of UIQ, Sony Ericsson Developer World has launched a tool-kit to provide support for web services on UIQ 3.0 devices like the P990, W950 and M600. This is one of the key areas where barriers need to be brought down if the mobile industry is to benefit from the rapid growth in web applications and it is heartening to see Sony Ericsson taking a forthright approach.
It has packaged an open-source gSOAP tool-kit with UIQ 3.0 code samples and tutorials to provide an API for accessing advanced web applications using Java or C++ clients on the mobile device.
Mikael Nerde, Head of Developer Program & Content Planning at Sony Ericsson, said: “Companies evaluating the opportunity of mobile Web Services have in the past faced resource obstacles during the development phase, and up until now there has been no easy implementation on UIQ. SOAP support on mobile phones enables true interoperability with network-based services. With Web Services gaining traction in the industry and with increased market demand, there has been a need to educate developers how to make use of them in new innovative ways for mobile phones. The open-source gSOAP package and Sony Ericsson developer tutorial help turn something complex into something simple.”
This represents important progress and should fuel the availability of powerful applications on the UIQ platform. There is likely to be growing demand for UIQ tools following the Sony Ericsson acquisition, as the manufacturer looks poised to push UIQ as its key platform throughout the handset range.
The next step will be mobile browser-based solutions with comprehensive support for AJAX, Flash and other web application technologies to further promote the use of data in the mobile environment. This will also be a key theme at the next MEX conference and I’d like to talk to any companies working in this area.
Operators working to harmonise NFC technology
Finally, the GSM Association has announced it is co-ordinating a 14 operator initiative focused on harmonising standards for Near-Field Communication (NFC), a contactless short range technology which can be used for ticketing, payment and identity applications. NFC has already been successfully deployed by NTT DoCoMo in Japan, where many commuters are already using their mobile handsets to access turnstyles in train stations and pay for goods and services. DoCoMo is noticeably absent from the list of supports, no doubt commited to its current system, but the group does include carriers representing about 40 percent of the world’s mobile subscribers: Bouygues Telecom, China Mobile, Cingular Wireless, KPN, Mobilkom Austria, Orange, SFR, SK Telecom, Telefonica Móviles España, Telenor, TeliaSonera, TIM, Vodafone and 3.
NFC is potentially a key enabler of the next generation of mobile networks, where the mobile device is able to talk not just to other people, but to the world around it. This will produce an entirely new set of user experience challenges and, again, will also be addressed in detail at the next MEX.