How to add value to content by leveraging telco's REAL strengths

April 25, 2012

Big Data, Personal Data & Privacy: The Telco Opportunity

Those who follow Telco 2.0 (and come to our events) will know that we’ve been working with the World Economic Forum (WEF) on their ‘Re-thinking Personal Data’ project for the last two years, which is about how ‘personal data’ can be turned into a new class of economic asset. Here is a recent video we made recently to explain the opportunities in this space, with some more useful links below. We’ve also just published another video, Big Data: How Personal Clouds and ‘VRM’ will revolutionise Customer Relationships, by Doc Searls over on our research portal.

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March 7, 2012

M-Commerce: can Voice 2.0 make mobile ads work at last?

One of the things that our Facebook pre-IPO analysis highlighted was that Facebook has 425 million mobile users and isn’t making a penny from them. It’s a top priority for them to change that, and the constraints of designing a good mobile user experience mean that it will take all their ingenuity to shoehorn adverts into the mobile client.

Further, even within the online version of Facebook, customers are in ‘social’ rather than ‘shopping’ mode, and many mobile users are on third-party apps that talk to the Facebook API, so Facebook doesn’t control the user interface “chrome” that surrounds the content.

JCPenney's Facebook store, now closed JCPenney’s Facebook store - now closed. source

Facebook’s big idea is to inject “sponsored stories” into the content itself. But will anyone accept that? And might the integration of Voice 2.0 communications into mobile advertising help turn it into a lead generating business? There’s starting to be some signs that it could.

[Ed. We’re looking at local advertising and commerce strategies at the Silicon Valley Brainstorm (27-28 March), and at Voice 2.0 strategies both there and at the London Brainstorm (12-13 June).]

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December 14, 2010

Analysis of UBS Media & Comms Conference - Some like it Hot

As part of our increasing focus on ‘Digital Entertainment 2.0’, here is an analysis of UBS’s recent Global Client Conference:

The top brass of the Media and Communications industries gathered in New York last week for the final investor jamboree of the decade and the word on everyone’s lips was “online”, and specifically, whether it was a creator or destroyer of value for the industry.

It was apparent that it is far too early in the game to pick winners and losers. Perhaps more importantly, the playbook of the move online in the video world will be completely different from the music and newspaper industries where significant value was, and still is, being destroyed.

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November 3, 2010

Smart TV and the Connected Home

We’re delighted that Nicolas Bry, SVP at Orange Vallee, France Telecom’s 2 year old ‘skunk-works-to-market’ group, will be stimulating the ‘Connected Home’ session at the Telco 2.0 EMEA Executive Brainstorm next week in London .

To stimulate the brainstorming he’ll describe ‘SoTV’, which is about defining a new type of TV-based internet experience - integrating entertainment with search, apps, gaming and other services. He recently wrote a thoughtful piece on his blog below, which helps us to understand where he’s coming from.

A key question is this: if the TV is becoming the ‘Smart TV’, how can we avoid the mistakes of the move from phone to ‘Smartphone’, in terms of ceding power to other players? Who should telcos partner with to keep a strong position in the ecosystem, and how should they do so? Here is Nicolas’ blog post:

Smart TV and future of Television

I’ve been through a very interesting article from Mark Suster, an experienced manager in the digital economy, who is now working at GRP Partners since 2007 as a General Partner, focusing on early-stage technology companies. It is called The Future of Television and the Digital Living Room and was released at Fast Company’s web site.

Mark identifies 10 major issues that the TV industry will face in the next 5 years, and I have tried to put a few comments after a short summing-up:

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October 20, 2010

Entertainment 2.0: Can Telcos help save the Video Distribution Industry?

The physical distribution of digital video is in turmoil, and the entertainment industry is in a state of fear and denial about online distribution. The signs are that Video could emulate the music market’s disappearing act. Can telcos help?

In the run up to our Executive Brainstorm events in AMERICAS, EMEA and APAC, and Best Practice Live! virtual events, we provide some background analysis:

If you want to know what the entertainment supply chain thinks of the digital online opportunity, then the ESCA Edge conference, the premier entertainment retailing and supply chain event, is not a bad place to start. At the event held in London last month, a major theme coming through from speakers and delegates alike was fear - fear of declining physical sales and fear of online eating into margins legally or pirates destroying them completely.

As a result, most discussions targeted the short-term and were based around protecting physical margins by reducing costs in the supply chain, such as minimising returns and on site disposal. Additionally, the conference questioned the ability of online to deliver video effectively, clinging to a hope that the Internet’s weaknesses would provide the best defence against it.

Negative approach to online
This was highlighted by a strange presentation from Tom Moran, senior director, business development at Savvis, who laid out the limitations of the Internet infrastructure to support professional video. Pitched as ‘realism’, the messages were a little misleading. While it is certainly true that the Internet would not be capable of supporting the switch of all broadcast and physical video today, this is not what’s happening, it is a gradual transition and broadcast will remain a mainstay in the market for the foreseeable future.

Furthermore, customer behaviour online is different to traditional TV as users choose when they watch, rather than always watching live. Finally, the amount of dedicated infrastructure available to video or the development of specific structures such as CDNs that reduce pressure weren’t mentioned.

At Telco 2.0 we would argue a better and far more positive approach to online is to develop an effective supply chain for it and leverage the unique characteristics of both physical and online mediums to maximise profits from both in the medium and long term.

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September 30, 2010

Guest Post: Amdocs on living with Google

This is a guest post by Dana Porter, Vice President and Head of Global Marketing at Amdocs. [Ed - Co-opetition and disruptive strategies also feature at our Americas and EMEA Brainstorms.]

When service providers think of their strategies with Google, there are three facts that need to be taken into consideration:

• Google is here to stay.
• Location is the most recent service to have been ceded to Google. Voice is next in line.
• Google can also drive service providers’ success.

We believe that the convergence of communications and the Internet is a fact - and that service providers, rather than competing with Google on all fronts, should actually seek to incorporate its services and apps as much as possible in order to enrich the overall customer experience for their subscribers.

To do so, service providers need to be clear on what they are bringing to the table and then examine how they can work with Google.

Service providers should focus on their core assets - their network, customer and product data. And they should leverage their core capabilities, such as billing, customer care, and service delivery to create new services they can monetize through partnerships with Google and other over-the-top competitors.

As the Telco 2.0 executive briefing, “Google, Where to Compete, Where to Co-Operate” notes, the service providers’ “golden asset underpinning many of their future models” is their wealth of customer data and that “understanding consumers’ behavior will be the key to victory in the voice, messaging and advertising brokerage markets.”

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September 28, 2010

Guest Post: Blyk - A Message from the Advertising Industry

This guest post by Telco 2.0 partners Blyk contains useful guidance to operators and others seeking to grow the telco-enabled advertising and marketing business. Blyk will be at our EMEA Brainstorm, where we’ll be discussing some of the issues they raise in our Consumer 2.0 session.

You can also find more from Telco 2.0 on our research portal under ‘Advertising & Marketing’, including Mobile Advertising: 100 times more ‘eyeballs’ - Blyk’s Wholesale Strategy. There’s also a summary here of the links from the Telco 2.0 Best Practice Live! videos - ‘last chance to see’ - Tuesday 28th September 2010.

Listen to the Customer

As a provider of messaging media to MNO’s, we sit in an interesting position at Blyk. We spend half our time listening to Operators telling us what they think advertisers want, and the other half hearing what advertisers want from Operators. Considering the number of strategic conversations going on internally at Operators about how to work in a media environment dominated by Google, one might expect there to be attention to the messages emanating from the advertising industry. The message from advertisers is clear and in this article we attempt to clarify those messages and at the same time provide some advice about how to maximise the relevant opportunities.

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September 20, 2010

Digital Entertainment 2.0: New Growth Opportunities

This post on new Telco 2.0 opportunities in Digital Entertainment is the second of our daily posts this week, summarising our recent and new research for the Americas Brainstorm in L.A., 27-28 Oct, and the EMEA Brainstorm in London, 8-9 Nov.

It’s also the ‘last chance to see’ the material from our first ‘Best Practice Live!’ online event, with the videos coming offline on 28th September, so please watch the ones you want to see before they’re gone. The links are marked* below or can be found here). NB. You will need to register on the first page that the embedded links take you to, or log in if you’ve already registered. If you have any problems please email us at

Digital Entertainment 2.0: New Growth Opportunities

In Entertainment 2.0: New Sources of Revenue for Telcos?, we showed how telco assets and capabilities could be used much more to help Film, TV and Gaming companies optimize their business model, which is under pressure from new players applying new forces as outlined in our notes on Apple and Netflix.

But what should telcos and other players do to take advantage of these opportunities?

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September 12, 2010

‘Digital Entertainment 2.0’ - New Research Initiative launched

We’re delighted to announce the launch of a new research and events initiative focused on new business models for the Film, TV and Games industry. See website here: ‘Digital Entertainment 2.0’.

This builds on our work in bringing the telecoms and content industries together to look at new commercial models for strategic collaboration, and the success of our 1st Hollywood-Telco executive brainstorm in Los Angeles in May.

Based on new research from Telco 2.0 analyst team, we’re launching the initative via two ‘executive brainstorm’ events, co-located with our upcoming Autumn/Fall Telco 2.0 events:

We’re delighted that senior industry execs from both Hollywood and European entertainment companies are supporting the initiative, and we’re working with Bain, Comscore, the World Economic Forum, Intel, Globecast, Ericsson and others on the programme.

More here, or contact us.

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September 1, 2010

GMail voice - nice, but no Skype Connect

So you can now make telephone calls from within Google Mail. Well, among other things this is a fine example of something we said back in 2008 in the Consumer Voice & Messaging 2.0 strategy report. Jamie Zawinski said that every program tends to expand until it can read e-mail - we said that the same was now true of telephony. Everything expands until it can place phone calls. As a result, although total minutes of use keep rising, the market is deconcentrating, with the total spread across an increasing diversity of players - games, Voice 2.0 companies, enterprise VoIP networks, mobile apps, perhaps even the odd telco.

But we actually don’t think Google’s move is enormously significant. Consider this: if you’re a telco, and you provide plain SS7 circuit-switched voice, everyone agrees you’ve got a problem. Telephony is now a software application and it’s very often free, which doesn’t leave you much scope. If you’re one of the traditional alternative voice providers - calling cards, carrier VoIP like Vonage, discount MVNO, etc - you also have problems, because you’re trying to undercut a price that’s going to zero. We recall Boris Nemsic, when he was CEO of Mobilkom, saying that their answer to “fixed-mobile convergence” was a new tariff that offered unlimited national and on-network minutes for €10. There wasn’t any point being cute, when they could just cut prices and squash the margin players like bugs.

So you need to find some way to differentiate - to offer better voice and messaging.

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October 27, 2009

O2 and Buongiorno: Winning with Two-Sided Advertising

Not so long ago, we published a research note on content wholesaler Buongiorno and its successful transformation towards a two-sided business model. Specifically, we liked the way their platform allowed rewards - like airtime top-ups - to be based on rules, firing off an event whenever specific conditions are satisfied. Their Top-Up Surprises product with O2 UK, for example, offers a giveaway of extra SMS messages and minutes for prepaid users who top up more often; not only does this encourage the subscribers to use more of the core voice, messaging, and data product, but it also creates an opportunity to sell to upstream customers. Although there was no evidence that O2 had yet considered such a move, we speculated that a useful two-sided move would be to make the surprise associated with somebody’s brand - for a fee, of course.

We recently got this press release:

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October 6, 2009

Digital Advertising & Marketing 2.0 - new consumer engagement

The video below* sums up the challenges that the marketing industry faces. How can we create a more valuable connection with the increasingly ‘digital generation’?

At the upcoming Telco 2.0 ‘Executive Brainstorms’ (EMEA, 4-5 Nov, London and
AMERICA, 9-10 Dec, Orlando ) we’ll be debating in detail this topic with those at the cutting edge, looking in particular at how to turn mobile into a scaleable platform for engagement marketing, and integrate it with online.

* Thanks to Jeff Swystun from DDB for this ref.

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June 12, 2009

Online Video 2.0 - TIme to re-think the fundamentals

Below is a summary analysis of the Video Distribution 2.0 session at the May 2009 Telco 2.0 Executive Brainstorm.

The premise we explored was this:

The demand for internet video is exploding. This is putting significant stress on the current fixed and mobile distribution business model. Infrastructure investments and operating costs required to meet demand are growing faster than revenues. The strategic choices facing operators are to charge consumers more when they expect to pay less, to risk upsetting content providers and users by throttling bandwidth, or to unlock new revenues to support investment and cover operating costs by creating new valuable digital distribution services for the video content industry.

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June 3, 2009

Subscriber Data: The smarter way to use it

[Ed - This is a guest article by Telco 2.0 ally Paul Magelli Head of Subscriber Data Management at Nokia Siemens Networks on customer data, a topic we’ve been investigating since 2006, notably here, on the difference between potatoes and plutonium, on Move Networks, OpenID, Skydeck and Yahoo!.]

By 2015, when there will be something like 5 billion people connected around the world, where applications will predominate in the internet and there is broadband everywhere, a multitude of business models will exist. A vital aspect for communications service providers (CSP) to survive and thrive in this environment is to have a sharp focus on the individual needs of subscribers.

CSPs, particularly mobile operators, already know a lot about their subscribers. They know not just who their customers are and what their service profile is, but how much they spend on the services, when and where they spend and much, much more. Few other industries have such detailed insight into their customers’ behavior.

Using this information efficiently and effectively will be the ultimate enabler of success.

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May 28, 2009

Retail Services 2.0 - Output from Telco 2.0 exec brainstorm, May 09

Below is a summary analysis of the Retail Services 2.0 session at the May 2009 Telco 2.0 Executive Brainstorm. It builds on some of the issues about selling to the ‘digital generation’ that we described before the event here.

The session involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology, a panel discussion, and a vote on the best industry strategy for moving forward. Below is the vote, followed by some of our post-event analysis on key lessons and industry next steps:

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Mobile Advertising Is Really Another Comms-Enabled Business Process

We should all now be aware that the global digital advertising market adds up to about 2 per cent of the telecoms industry’s revenues. But advertising is a sub-set of a bigger sector -  ‘marketing services and business intelligence’ -which is far more valuable and far more pertinent for telcos to support.

As Rory Sutherland, vice-chairman of Ogilvy, said at Telco 2.0, there are probably more good ideas in mobile marketing than there is money to pay for them.

he's right, you know

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May 7, 2009

Yahoo!, COLT and the Customer Data Revolution (CDR)

Alireza Mahmoodshahi, CTO of COLT, seems to have caught the Telco 2.0 Executive Brainstorm’s imagination with COLT’s plans for a carrier-grade cloud computing platform.

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March 10, 2009

Oh Yes, It’s YouTube vs the PRS!

YouTube - that is to say, Google - and the UK’s musical copyright agency, the PRS, are having a row. Since yesterday, Google is no longer serving high-quality videos covered by PRS licensing to end points in Britain. Telco 2.0 associate Alan Patrick has some interesting thoughts on the affair at his blog.

Alan, of course, helped prepare the scenarios in the Online Video Distribution report, which foresaw a rapid progression through a period of intense change and conflict (we called it Pirate World) as the old media economy broke up, but which would eventually result in a new value chain emerging as the problems of an all-pirate world made themselves felt.

We also had a look at the differences between YouTube and Hulu not so long ago. Hulu is, of course, the content owners’ answer to YouTube; we may just have seen YouTube’s answer to content owners. It’s also worth noting that (at least if you take YouTube’s explanation seriously) that it has some similarities to the ISP backhaul crunch; in both cases there is raging demand from the customer-facing players for a product that comes from a near-monopoly, but one of the constraints on the near-monopolist is the risk of putting the customer-facing players out of the game.

We will, of course, be discussing this in much more detail at the next Telco 2.0 event, where Alan Patrick will be presenting a taste of the research in our latest report, the Online Video Market Study.

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March 5, 2009

ITV - the implosion of ad-funded broadcast TV

We’ve just watched the ITV results webcast and we’re still sat shaking from post-traumatic-stress-disorder. Fundamentally, the current ITV business model is a pure leveraged play on advertising spends. The scars may remain in the minds of investors even when the current economic cycle ends - basically the old way of ITV doing business is completely broken. And this is before the pressure of the continual shift to the plethora of choice - whether via cable & satellite penetration, or online. A comparison with the success of BSkyB in implementing a two-sided platform is instructive to say the least. We’ll be discussing some of the issues in this post at Telco 2.0 in Nice, 6th-7th May, and they are at the heart of our all-new Online Video Distribution Market Study.

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January 14, 2009

Apple blows a hole in the Mobile Music Landscape

At its recent MacWorld conference, Apple made three key changes to its iTunes music services offering: DRM free distribution, wireless downloads and variable pricing. A year ago, iTunes looked like a business under pressure. But these changes make the mobile operators’ and Nokia’s “Comes with Music” propositions look poor in comparison. In the article below we explore why this is the case and the significant new challenges faced by telcos involved in the content business.

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December 17, 2008

Marketing Services: Adverts are just the start

_Whilst many telcos focus on creating inventory for adverts (e.g. via IPTV), or optimizing advert insertion (e.g. BT’s trial with Phorm), there is a potentially much bigger opportunity lurking in the background. A few weeks ago we presented a Use Case demonstrating a rich advertising opportunity. Here we look beyond advertising towards the bright future of telco-powered marketing services._

Sitting on the London Underground a few weeks ago, your analyst correspondent was struck by one of the adverts opposite. Travelling on the tube is never the most pleasant of experiences. A claustrophobic train crammed with sickly commuters is a potential hazard to both your physical and mental well being. The marketing men know it, and are more than happy to play on your fears.

Where does advertising end and a relationship begin?

The product in question was a herbal concoction designed to immediately cure your paranoia of winter illness. The only action required on you is the simple application of money to the nearest vendor of these life-giving pills.

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December 16, 2008

How Does YouTube Make Money?

As part of our forthcoming Online Video Distribution report, we asked Alan Patrick, the report’s co-author, to model the internal economics of some major video distributors on the Web.

We looked at Hulu and most of all, at YouTube…The models use public domain information and make some of our own assumptions as to underlying economics. Before you read this, you should probably read this post.

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November 26, 2008

Use Case: Telco customer data for advertising in OTT video

In our upcoming report on Two-Sided Business Model Use Cases in Advertising and Marketing (part of a new Advertising & Marketing 2.0 research practice), we examine more closely how telcos can leverage their data assets to improve their positioning in the advertising and marketing value chain via a platform strategy.

As a taste of our ongoing research, we presented a short example from the over-the-top video world at the 5th Telco 2.0 executive brainstorm at the beginning of the month, to test out some of the concepts with the audience. Interestingly, the presentation seems to have resonated with participants, who were asked to rate current telco strategies for supporting the advertising and marketing industries.

They responded with an overwhelming bias towards “weak”. Commentary in the feedback session included observations that telcos are in an ideal position to add insight into their customer base, but have failed to data-mine properly or develop monetization strategies. The audience also identified three next steps for the industry: understand the data, respect the customer, and open the system.

enck-eventNov08-1.png Below is a use case scenario for telco customer data in the context of an over-the-top video and advertising platform:

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November 12, 2008

Exclusive Interview: The ‘Long Tail’ Interrogated (part 2)

Last week the fifth Telco 2.0 Executive Brainstorm continued its theme of business model innovation at the intersection of telecoms, media and technology by welcoming back Will Page, Chief Economist at the MCPS PRS Alliance, a copyright collection society that represents over 50,000 songwriters and 5,000 publishers.


Will took the opportunity to present, exclusively to Telco 2.0, new research - based on an unprecedented analysis of digital music sales data gathered over a year - that opens to question the recieved wisdom around the ‘Long Tail’ theory, and helps to re-define what it actually means and for whom. The presentation created quite a stir at the event, in the media and blogosphere. Here, Telco 2.0 discusses at length the presentation and the reaction to it with Will Page.

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November 5, 2008

CDR = Customer Data Revolution

The opportunities and pitfalls of the telcos’ vast stash of CDRs (Call Detail Records) and phone bills have been a top theme here at the Telco 2.0 event. Last year, you may remember, we said on this blog that in the future, so many new applications will need contextual data to function that we’ll need to think of how subscribers will take their data shadow with them when they churn. It looks like this is going to be more important than ever.

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October 28, 2008

Guest Post: SAP on really understanding your customer

One of our Telco 2.0 themes is how telcos need to become better retailers. At a client workshop last week with a major mobile operator we were pointedly asked how to go about achieving true customer intimacy. We believe that one key element is to tie analytics to business processes. This topic is covered in our current bedtime reading which explains how data warehouses and CRM systems typically live in different universes. We are not alone in thinking this. In this guest post Mark Johnson, Global Marketing Director at SAP, explains his view on how we will see a shift from reactively managing interactions with customers towards proactively seeking value to bring to customers - something called ‘Customer Value Enhancement’. (Ed - Mark will be stimulus presenter at the Telco 2.0 executive brainstorm next week).

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October 13, 2008

Ring! Ring! Hot News, 13th October 2008

In Today’s Issue: Crunch crunches Chinese corporate creativity; Nextel spinout shaky; Sprint execs “industry’s most overpaid”; WiMAX smartphone leaked; VZW starts charging for bulk SMS delivery; IfByPhone understands your call centre campaign; vendor-pays data is here; RIM’s AppStore for enterprises?; Comcast gets social TV; Vodafone buys more of Vodacom; IBM: still has money; Indian cellsites get fuel cells; MBNL-BT backhaul superdeal; xG shenanigans; yet another security nightmare at DTAG; GSMA without the GSM; mobile filmmaking to fight the Taliban. scary!

This week’s main theme was telcos calling off planned corporate action in the face of the financial crisis; Huawei, like so many other vendors, has been thinking of getting rid of its handsets business, a low-margin job better left to cheap Chinese ODMs…hold on, some of us remember when Huawei was a cheap Chinese ODM. But this week, the sale was put on indefnite hold for fear someone might bid one euro and get it.

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October 8, 2008

How YouTube wins with Web video

YouTube has been so successful that it’s become one of the three applications that have fundamentally changed the infrastructure of the internet (email and the web are the others). As the first real ‘broadband’ application it has more than filled the pipes that were overbuilt in the boom time and it’s forced carriers to peer with a content provider for the first time (see our recent analysis of its impact here).

So, how has YouTube coped with the traffic? Below is a short case study of YouTube’s business model and its impact on others. It deals with the vital importance of aggregation and a major shift in the industry’s internal economics. [Ed - this is a short extract from our new report on ‘Fixing the broken Internet Video distribution value chain’, to be released in November. Pre-order now for a 10% discount here]

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September 17, 2008

Telco 2.0 Interview: Steve Zimba, Microsoft

Continuing our series of interviews with major industry thinkers, Steve Zimba is Microsoft’s Managing Director, Global Telecoms Business. We interviewed Steve about their ‘Telco 2.0’ strategy. This integrates their PC, IPTV and mobile offerings with a combined software and services offering, supported by telecoms-specific capabilities and a third party ecosystem.

Steve Zimba

Microsoft is a particularly interesting company to us because they are in a unique position. They bridge the consumer and enterprise markets, which places them well to create technologies and operational businesses for two-sided markets. Their Internet competitors are consumer-centric, and don’t have channels into the enterprise. Rivals such as IBM don’t have the consumer brand or media properties to run experiments on the scale Microsoft can. Furthermore, Microsoft is active across all of the B2B value-added service areas we believe will drive future telco growth: identity, advertising & marketing services, e-commerce, order fulfilment, content delivery, billing & payments, and customer care/CRM. The difficult challenge is whether Microsoft can make the whole more than sum of its software conglomerate parts.

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September 15, 2008

Ring! Ring! Hot News, 15th September 2008

In Today’s Issue: Nobody wants landlines; Apple zaps apps, caps AppStore competitors, Winer flaps; Open Hack Day@Yahoo!; implementation of sci-fi dystopia for the iPhone; Vodafone deckchair redeployment; T-Mobile Android phone; C&W builds non-virtual GSM operator for Tesco; free airtime for ad viewers, human or not; attack of the terminators; 3UK says no; KPN-Bouygues MVNO deal; the Internet interprets America as damage and routes around it; screen-scanning check-in; warrants needed for LBS snooping

A sign of the times: David Isenberg points out that the University of Kentucky has stopped providing fixed phone lines in the halls of residence, as nobody wants them. And before mobile operators start to gloat, don’t think those same students will forever tolerate voice and messaging services that in no way integrate with the rest of their online lives. Where are the voice and messaging applications of the future?

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August 31, 2008

Telco 2.0 Research Programme, Autumn/Winter 2008

Following the publication of the new Telco 2.0 Manifesto, we’ve refreshed our overall strategy research programme for the coming year. (Like the fashion industry, our products change with the seasons.) This new programme will address the key strategic challenges that lie at the heart of creating new value in Telecoms and adjacent markets. Here’s a quick preview.

5 x New “Research Practices”

We’ve organized our research into 5 Research Practices to address the key Telco 2.0™ strategic challenges.


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July 17, 2008

Big Cheese Interview: Tony Rallo, CTO, Televisa

Telco 2.0 is running a series of depth interviews with senior people in the Telco-Media-Tech sector. To start with, to support our summer research programme on new Content Distribution business models, we caught up with Tony Rallo, CTO of Televisa, the Mexico-based media giant which is also the world’s biggest creator and distributor of spanish-language content.

Tony has deep expertise in digital media (previously he worked for Apple in Europe). The global spanish-language market he serves (LATAM, Spain, US Hispanic) is huge and complex, with a GDP of $2.4 trillion, bigger than that of China. Televisa creates over 50,000 hours of video content per year (more than ABC, NBC, CBS combined) and has been at the forefront of exploiting it through the multiple media platforms they own (4 x TV channels, cable companies, soccer teams, live event venues, websites, merchandising operations) and through selling it to others worldwide.

Tony has a strong belief that Telcos potentially have much to offer the content industry…if only they’d think differently. Here’s what he had to say to us about the current state and future direction of content distribution - his personal views, not his company’s - over a beer as he passed through London:

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May 19, 2008

Ring! Ring! Hot News, 19th May 2008

In Today’s Issue: Motorola in the psychiatric ward; Verwaayen takes a bow;Bharti/MTN deal in the offing; Vodafone buys social network app, customers; Orascom: Iraq, Syria, Zimbabwe, North Korea, and now Cuba; C&W soon to be C and W; data from space cheaper than SMS; Qualcomm in the UK; more mobile-TV alphabet soup; Sprint launches WiMAX, loses 1 million customers and Embarq wholesale contract; MacBooks with WiMAX?; new J2ME toolkits; Verizon Linux; NFC SIMs in Thailand; death of muni-WiFi

Oh dear. Evolving Excellence have a killer detail about the crisis at Motorola and the rather non-obvious solutions they’re adopting - namely, picking a CEO who refuses to use computers and cutting back on R&D. Because, you know, they stopped meaningful product development for two years after the RAZRs came out, and that worked so well. Not just that, but the new guy’s background at the company was in the automotive business, which they’ve now sold as non-core.

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May 8, 2008

New IPTV Survey

Telecom TV’s new survey explores the future of IPTV. It’s an interesting survey and is quick to do. The link is here.

NB: For each survey you participate in TelecomTV will share the results with you for FREE and donate $1.00 to UNHCR’s charity,

Background: Many Carriers, faced with decreasing voice revenue streams, are looking to IPTV for their next big win. With new opportunities comes risks and challenges; many critics point out that telcos are straying into new and dangerous territory, because in becoming content providers they’re not playing to their key engineering strengths.

What do YOU think is going to happen in this carrier-delivered IP market over the next five years?

Please fill out the survey here. It’s relatively quick, entirely painless and for a good cause.

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April 28, 2008

Ring! Ring! Hot News, 28th April 2008

Meet JIL; that’s the Joint Innovation Lab, a project worked out between Vodafone and China Mobile that’s meant to establish standards for mobile widgetry. Apart from the obvious point that only telcos could come up with anything like a standards body for widgets, what’s the betting the standard turns out to be a lot like the Nokia Web Runtime?

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April 22, 2008

Another Kind of Platform: Telcos as Development Environments

Another common use of the word “platform” that sometimes confuses people is the way it’s used to describe the technology that goes around individual applications in a computer system. Like Microsoft Windows, Linux, Adobe Flash in the browser, Symbian S60 in a mobile phone, or what have you. IT people spend a lot of time arguing about them, which is probably less stupid than it sounds, because the history of IT has been the history of development platforms.

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April 7, 2008

Ring! Ring! Hot News, 7th April 2008


In Today’s Issue: 60 WAP sites - meh; Tellabs - beware big telcos; Google not buying Skype; Carphone Warehouse joins forces of Righteousness; cars! with periscopes!; Visto on the skids; Yahoo! Other people who searched for Yahoo! also searched for Yes!; unofficial iPhone SDK; cheap iPhones; new Nokia E90 firmware; WiMAX optimism; LTE promises; iClones; dumb terminals for your smartphone; 35 years of mobility

NBC Universal offers a thrilling new content play: “direct access to more than 60 WAP sites on your handset”, no less. We thought you already had “direct access” to considerably more than that. Of course, what they mean is that they’ll yuck up all the menus with ones they want you to visit so they can show you ads. So very 1999-dotcom-boom. Just don’t tell us there’s another bust coming…

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March 31, 2008

Ring! Ring! Hot News, 31st March 2008

In Today’s Issue: Motorola gossip: the demerger cometh; cablecos’ Comcast-Clearwire concert party; HOWTO deploy fibre in NZ?; here’s an answer from San Francisco; Symbian OS platform security is hacked; free WLAN in BA lounges; 3UK is profitable, pigs fly; another MVNO casualty; Virgin Mobile India “not an MVNO”; Miss Bimbo; $20 a month on ringtones; Cuba Movil!; Chinese 3G; really fast stuff; 3G iPhones; another startup-without-money.

Inside gossip at Motorola; someone claims to have been the Richard Kinder figure of their crisis and accuses Ed Zander of working their past CMO to death, and also playing too much golf. Which of these sins is more serious is left as an exercise for the reader. It was also this week that saw Moto finally take our repeated advice. They got rid of the handsets operation, thus leaving it “floating downwards to find its own level”, in the immortal words of Sir Norman Fowler describing the collapse of Sterling.

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March 19, 2008

Mobile Advertising and Marketing Awards: Roundup

Guest post from Mobile Enterprise CEO Tony Riley:

The first Mobile Advertising and Marketing Awards Conference was held in London on 12th/13th March 2008. The event continued many of the themes from the GSMA’s CMO Forum and the Telco 2.0 program. It added its own unique sound bites enhancing previous debate and also a few new insights into “what the industry is really facing.” Here are a few thoughts from the conference:

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March 3, 2008

Ring! Ring! Hot News, 3rd March 2008

In Today’s Issue: Mobile apps RIP? And are mobile RIAs the killer? Control your private plane with a Nokia N810; or develop for IMS. It’s your choice. NEC pushes “It’s not IMS”. Sprint = Telco USSR? British ISPs; how not to do it. Comcast: much the same. iPhones; hacked again. Hackers deploy platform strategy. menace rises. Big changes ahead at Telecom Italia. Nokia GPS-tags photos. Virgin Mobile in India. EU “worse than communism”. And cancerogenic BTS doesn’t exist after all.

Have downloadable mobile applications died the death, to be replaced by a Web-based future? Former Palm and Apple exec Michael Mace thinks so; Carlo Longino agrees. The argument is that the diversity of possible platforms, the difficulty telcos (especially) and vendors have relating to the developer world, and the restrictive terms of business they apply, have rendered it just too difficult for a real developer ecosystem to emerge. Meanwhile, the surge in things like Microsoft Silverlight, Adobe AIR, and JavaFX means that the richness of applications that run in a browser is beginning to challenge what you can achieve reasonably quickly in a native application. This is a significant change in the balance of power between the Web 2.0 players and telcos, since you don’t need a special (telco-issued) digital certificate or pre-installation for web applications.

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February 29, 2008

Highlights of the CMO Forum at Mobile World Congress

150 representatives from across the global mobile marketing value chain gathered for a brainstorm at The CMO [Chief Marketing Officers] Forum at the Mobile World Congress in Barcelona two and a bit weeks ago. The focus was “Mobile as a True Marketing Channel - Realising the Opportunity”. Lots of others tried to get in, but it was strictly invitation-only. Telco 2.0 facilitated the event using our ‘Mindshare’ interactive tools and presented some new research. It’s interesting to compare the output from this event (below) with the Telco 2.0/GSMA Digital Marketing & Advertising Summit in October (output here).

For those who weren’t in Barcelona, or couldn’t get past the bouncers on the door, here’s what happened:

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February 20, 2008

Re-packaging voice minutes to raise margins

The price of a marginal voice minute is falling all over the world. A basic access bundle of voice, messages and data is becoming the norm in many markets. That bundle offers an ever-larger, or even unlimited, amount of traffic. At the same time, there’s a dramatic explosion of new kinds of voice going on — embedded in games, mobile VoIP, IM clients growing a voice capability, web-based click-to-call, extensions to enterprise VoIP systems — and none of them are by default inside the telco.

In case you missed it the first time, here are the results from our Broadband Business Models survey on this score:


The message is simple: non-operator voice-enabled application are going to grow very fast. That’s not our opinion, but that of you and your peers. (Our opinion is that the numbers are a little aggressive, but not by much. It may take a 2-3 extra years. Still, contrast mobile in 2008 with 1998 to see how dramatically the world can change.)

If you’re a phone company, and you’re still on Plan A of selling large buckets of voice minutes, it doesn’t look like a very attractive future. At the moment, telco voice is still just about growing in volume, although margins are often vanishingly tiny on fixed line, and falling fast on mobile.

So what could we do about that? The Telco 2.0 way is to divide up your bulk product, and re-package it and distribute it in new ways. We’re going to use dating as an example of how to do it.

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February 18, 2008

Telco 2.0’s Private Mobile World Congress

So everyone else has done their 3GSM…sorry…Mobile World Congress round-up posts; what did Telco 2.0 think was cool? As you’ll no doubt guess, it wasn’t the shiny gadgets that got us; even at MWC, the anti-shiny goggles all Telco 2.0 team members get issued still block them out. It was a very serious conference this year; we think it may have been the first to get serious about the kinds of communication and enterprise-focused activities that will eventually make serious money for carriers. We broke them down by themes…

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January 14, 2008

Ring! Ring! Hot News, 14th January 2008

This year, we’re focusing on seven themes in the industry; Investment and Market Valuations, Disruptive Threats, Two-Sided Business Models (a key theme in the forthcoming Platforms report), Adjacent Markets, Core Products and End-User Needs, and of course Regulation. So these news posts will be centred around these concerns.

Despite everything, it looks like Sprint is going ahead with the big WiMAX rollout; launch is scheduled for mid-April, and a gaggle of new contracts have been issued to hardware vendors like ZyXEL. The mob that is the Apple fanbase is working itself up over the thought that this year’s Macworld might see the launch of a WiMAX-capable device of some sort — apparently they’ve got ad banners reading “There’s something in the air”. There’s conclusive evidence for you.

However, it’s true that Sprint is looking at bundling WiMAX connectivity with devices, just as it wraps EV-DO data in the price of the Amazon Kindle (“In Amazon, book reads you!”), so perhaps there’s something in it. Meanwhile, China Mobile doesn’t want the iPhone.

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January 7, 2008

Ring! Ring! Hot News, 7th January 2008

BT strikes in the set-top box market; they’re the first to ship Xbox360 consoles as IPTV endpoints. And there’s more; BT Vision gets an “on-screen magazine” based on the same single platform. We’ve often said that the fixed-line world doesn’t get user equipment, and that this creates interesting opportunities; BT has just leapt right on it. See our case study on Iliad’s Freebox in the Broadband Business Models report.

PS: we’re trying out a new format for Ring! Ring!…

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December 17, 2007

Ring! Ring! Hot News, 17th December

Telco 2.0 Strategy

Structural separation? We don’t need no stinkin’ separation! So says Belgacom…

Telco 2.0 Comment: They built a VDSL network, and now their competitors want to play. Belgacom of course claims they took the risk and therefore should reap the rewards; but the biggest competitor is the company that laid the fibre already everywhere else, and now wants to offer unbundled service in the rest of the country. Will profits come from pleasing customers, or regulators?

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December 13, 2007

Advertising: The Telco Trojan Horse

We recently gave readers of this blog a summary of the key highlights from the Advertising and Marketing Summit at the Telco 2.0 Executive Brainstorm in October, run in partnership with the GSMA. This post seeks to build on the last one and give further insight into why Advertising should be interesting to operators: not because it will fill the gap created by declining voice and messaging revenues alone, but because it represents an entrée into other lucrative areas.

Let’s look at what was covered at the Advertising and Marketing Summit in a bit more detail:

Customers: “Why aren’t you doing more?”

We kicked off the day with three potential customers of Telco advertising services:

  1. Nick Strauss, Senior Planner, Mather Advertising - ‘The Brand’
  2. Sunil Gunderia, VP Mobile EMEA, Walt Disney Internet Group - ‘The Content Provider’
  3. Richard Wheaton, Managing Director, Neo@Ogilvy - ‘The Media Buyer’

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December 11, 2007

Nokia Ovi - presentation and video

Following our very popular post on Nokia, a useful introductory presentation and video from the recent Nokia World event describing Ovi can be found here. We believe Ovi is a very important industry development…

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December 10, 2007

Ring! Ring! Hot News, 10th December

In Today’s Issue: Asia goes crazy for network sharing, plastic fibre, fixed-line videocalls (yes, really), Opera Mini conquers all, make a widget and win a Nokia N95, UMA gadget with 2GB storage, data centre heists, iFlop, BlackBerry WiFi on a plane, Nokia threatens UGC boom, new torrent tracker tech terror, free music, ads in P2P movies, and Telco 2.0 Recommends…

Broadband Connectivity

Vodafone, Bharti, Idea in monster network sharing deal.

Telco 2.0 Comment: Shared, structurally separated, and community-owned infrastructure is a major industry trend in responding to the broadband incentive problem. This deal is especially interesting due to its sheer size; India is getting a giant shared mobile infrastructure operator, which will probably draw in other carriers.

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December 3, 2007

Ring! Ring! Hot News, 3rd December

In Today’s Issue: 3.3bn Mobiles, Open VZW, 3UK sues the world, Peter Erskine spends more time with his money, another WiMAX outbreak, Japanese data prices tumble, Dutch fibre prices untumble a tad, Saudi Mobily buys huge IP network, Vodafone and Telefonica and adverts, Lithuanian and Brazilian IPTV, rapid withdrawal from Iraq, Nokia’s cool tools, sinister stalkerware from Google, and Telco 2.0 Recommends: the best of the blogs.

Telco 2.0 Strategy

3.3bn mobile subscribers worldwide

Telco 2.0 Comment: And that’s still only 50 per cent world penetration. The big question is now just how close to the world adult population it’s possible to push; is more than 75 per cent achievable?

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November 16, 2007

AT&T 2.0, IPTV and the BSkyB connection

An instructive summary of a recent presentation by one of AT&T’s Group Presidents, Ralph de la Vega, covering IPTV and the broader transformation of his company here.

De la Vega’s track record is near perfect. The way he re-built Cingular and merged it with the old AT&T Wireless is a text book example of how to do a mega-merger with different technologies (GSM & TDMA), especially when we have the not-so-smooth comparison of Sprint and Nextel so clear in the memory banks.

For Telco 2.0 watchers the key quote from his talk is this:

De la Vega sees the industry as focusing on three points to push the entertainment industry into the 21st century. Content needs to be accessible on all three screens, it needs to be high definition, and it needs to be high quality. “The new TV is not something we can do alone.” “AT&T 2.0,” as de la Vega described it to chuckles and sighs from the audience, “is looking for partners.”

We wonder whether IPTV, as currently architected by Microsoft and deployed by AT&T into the home via DSL, is the answer. We are much bigger fans of either a) the evolving BSkyB solution or b) the Verizon FiOS solution (ie broadcast on a fibre wavelength) with IP-based solutions for the long tail (perhaps over a dedicated VLAN).

We await with interest AT&T’s next big strategic move which we predict will be the purchase of either DirectTV or EchoStar. Note: if they buy DirectTV (a customer of NDS) watch the rollout of the BSkyB solution across the States….

More on the links between AT&T and BSkyB here, and on Sky’s approach to broadband here.

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November 15, 2007

Forget Mobile Advertising…Think Bigger

We had a very fruitful discussion at the recent Digital Advertising & Marketing Summit we ran with the GSMA. Over 80 people attended from across Telco, Content and Media Industries with some enlightening presentations from future customers (Mather Advertising, Disney, Ogilvy); operators (Vodafone, Orascom); partner service providers (Yahoo!); trade bodies (Mobile Entertainment Forum, GSM Association, Mobile Marketing Association) and vendor partners (Infospace, Mobile Enterprise, Openet, Infospace and Alcatel-Lucent).

The full write up of the day - including all the brainstorming output and voting - will be made available shortly to participants but there were a few recurrent themes that I can share with you here:

  1. Advertising is a great opportunity because it opens up a new revenue stream from a new set of customers by allowing operators to be a platfom in a 2-sided market. It therefore can contribute to the decline in core revenues and is strategically important.
  2. No it isn’t, just look at the exec summary of STL Partners report Telcos’ Role in the Advertising Value Chain - the global advertising industry is only 25% the size of the Telco industry. Even if operators captured everything, there is no way advertising is going to fill the hole in core voice and messaging revenues. In fact, it isn’t work getting out of bed for.
  3. But Advertising is a great opportunity because it opens up a new revenue stream from a new set of customers by allowing operators to be a platfom in a 2-sided market …

Round and round and round. Several in the room advocating Advertising as the silver bullet and others dismissing it and pointing to the lack of REAL acitvity from the operator community as testament to their perception of the size of the opportunity.

So is this Argument Resolvable?

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November 7, 2007

VoiceSage and the business of…business

One of the most interesting companies that took part in October’s Telco 2.0 Executive Brainstorm is VoiceSage, a small Irish firm that develops innovative enterprise applications using telco services. This was a major theme of the event - if you want MySpace for monkeys on LG Prada phones, or the nth twist on music downloads, you’ll be fine asking Vodafone or Sprint, but if you ask anyone who gets Telco 2.0, they’re probably working on something for business users.

There is a very good reason for this; compared to telecoms, most of the trades that conventional wisdom thinks will provide growth and margin in the future are tiny. Telcos could completely crush the ad business - eat every ad agency in the world - and notice only a minor blip in their revenues. The telecoms industry could take over Hollywood and barely feel the bump, like some grey-suited monster lumbering over the Los Angeles canyons. For an encore, they could crush their way up the coast to San Francisco and eat the computer game industry. And it still might not be enough.

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October 17, 2007

Empowering the User through CDRs

CDRs - Call Detail Records, the database entities that permit telcos to bill their users - are getting a bad press at the moment with the latest revelations about US networks’ willingness to let the NSA dig through their databases without getting warrants or accepting any other quaint legal restrictions.

But at Telco 2.0 yesterday, we heard how CDRs might actually empower the users in a Telco 2.0 future. Keith Wallington of mobile SIP insurgents Truphone suggested that “in the future, this will be bigger than mobile number portability”. Wallington proposed the ability to have calls routed intelligently depending on your preferences and the patterns of use revealed by network data. And this brings us right to his point.

If all your contextual services depend on the contrail of signalling data you leave behind in the operator network, the ability to take that information with you when you churn is going to be crucial. Perhaps we need a right to claim our data; however, the really important point is as always the practical implementation of such a thing, just as it was with number portability.

So, of course, are the legal and privacy problems; the incentives for the operator to implement a platform for interesting contextual services are all about the clever things the operator could do with the data, but the strongest protections for user privacy essentially rule this out. If the user data, for example, was encrypted with a key the user controlled, the user could grant access to it for each service they wanted. But the operators will insist on being able to analyse the data themselves; or they probably won’t do it.

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October 15, 2007

Ring! Ring! Monday News Analysis, 15th October

No O’Reilly ETel for you!

Telco 2.0 Comment: You’ll just have to come to Telco 2.0 instead. We designed it specifically as a reaction against the kind of conferences where all you remember is the delegate bag — although ETel wasn’t among them and will be missed.

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October 7, 2007

Interview with Vodafone’s new MediaSolutions! Group

We are delighted to have Frank Boulben, New Business Development Director, Vodafone Group speaking at the Digital Advertising and Marketing Summit next week to update us on the vision the company has for mobile advertising and the steps they are taking to realise this.

Recently, we were also lucky enough to interview Burkhard Leimbrock, Director Vodafone MediaSolutions! about the new unit set up to support the advertising effort in Germany. We sent Burkhard a list of questions by email (so they could be vetted by the PR department) and his responses are below - lots of interesting stuff but also tantilisingly brief in some respects! This Unit is one of Vodafone Group’s many experiments in mobile advertising and marketing. It will be interesting to see how this capabilitiy is developed and whether or not it will eventually serve the wider Group.

Telco 2.0: What is the purpose of the new MediaSolutions Group within Vodafone?

VMS: We have laid this out in our website which says:

Vodafone MediaSolutions! handles all of Vodafone D2 GmbH’s ad marketing and commercial partnership integration business.
Join forces with Vodafone MediaSolutions! to reach attractive mobile, online and offline target audiences in the Vodafone/Arcor MediaNetwork!.
You can count on us and our marketing partner Gruner + Jahr EMS to provide you with competent advice and support for the development and implementation of innovative, integrated campaigns and partner concepts.
[Ed: The website also has some interesting stats about Vodafone’s German operations: “The Vodafone live! mobile platform has 3.8 million unique users and generates 490 million page views per month. It is by far the most successful mobile phone portal in Germany. On our online portals (, , ) generate a total of over 400 million page views every month, providing access to 3.5 million users which we’ll be happy to arrange for you.”
Also, buried on the website is the Vodafone rate cards with pricing details for their on-line portal and, if you navigate on the menu on the right, more details on their Digital TV and Mobile offerings.]

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September 18, 2007

Vodafone: A “Total Communications” Company?

The Times recently interviewed Arun Sarin, CEO of Vodafone. The Newbury empire once held ambitions of global hegemony as the biggest, baddest vertically integrated telco of them all. In a more pragmatic era, they’ve been working on getting the basics of business right, with their own glasnost and perestroika programmes to re-invigorate the mobile operator model.

Sarin’s remarks are consistent with the strategic move Vodafone is making into a new phase of its business. In the last year or so they have moved away from being simply a really big mobile network operator. He says he wants Vodafone to become a “total communications company”. In pursuit of this, they’ve been investing in fixed-line DSL and PSTN activities, either as a reseller (as in the UK) or by buying up assets (as with the acquisition of Tele2), or just by integrating more closely with their once forgotten fixed assets (as with Arcor in Germany), .

There’s a clear Telco 2.0 angle here; a key point in Telco 2.0 analysis is that the connectivity is no longer special. Rather, it is becoming a commodity — something easily purchased on the open market by any entrant for a predictable price. Further, its tight coupling with other parts of the value chain is melting away. Therefore, the distinctions between mobile and fixed operators, between networks and virtual network operators, and between telcos or ISPs, content providers, IT service providers, and consumer electronics firms are increasingly irrelevant. What now matters is the assembly of elements from the horizontalised soup into attractive propositions to customers. As we said about France Telecom, this may mean that integrated fixed-mobile telcos have more life in them than you might think. (Our current Survey will help to clarify that point anyway).

Sarin spoke of “mobile plus”, and pointedly mentioned that the company is getting into mobile advertising but would not become a content producer. Could this perhaps signal that Vodafone — traditionally the most telcoish of mobile operators — is thinking of a platform strategy?

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August 29, 2007

What Media Buyers Want from Telcos: New Research Programme

The 2nd edition of our report on the opportunity for operators in the media and advertising space, Telco’s Role in the Advertising Value Chain, seems to be going down well. We have been inundated with requests for the executive summary and several orders following an interview we did with Jim Cook of the excellent MobiAd News Portal. If you haven’t seen the executive summary of the report and want to, then email us for a copy.

Building on this and in preparation for the Telco 2.0/GSMA ‘Digital Advertising & Marketing Summit’ in October we have recently started discussions with several members of the Mobile Marketing Association’s (MMA) UK Board who have expressed a great deal of interest in a new piece of research which we are planning. For those who aren’t familiar with the MMA, it is an industry forum designed to promote the development of the mobile marketing channel. Where the GSM Association has an operator-centric focus, the MMA has strong representation amongst agencies, advertisers and media buyers: the future customers of a Telco advertising channel.

We spoke to Tony Riley (Mobile Enterprise), Maureen Scott (Openwave), Mark Palmer (Maverick Planet) and Jonathan Bass (Incentivated) about the need for operators and vendors/enablers to better understand the requirements of media buyers so that they can develop appropriate solutions and, where appropriate, work together on relevant industry-wide initiatives.

They all felt that this information would be hugely valuable as the danger at the moment is that the very customers that operators and vendors would like to serve are not able to contribute effectively to the discussions and activities currently taking place. This reinforces the discussions we’ve been having with our brainstorm stimulus speakers from Vodafone et al. So, this is what we plan to do to rectifiy this:

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August 28, 2007

Music as DSL Subsidy, and Cuffware

French ADSL operator Neuf Cegetel has turned platform, recruiting Universal Media as a partner in its new music service.

For €4.99 a month over and above their usual €29.90 triple-play tariff, you can download as many songs as you want from the entirety of Universal’s back catalogue. A less extensive service is free. It’s clear what Neuf Cegetel is up to, right? Facing the usual DSL operator’s struggle to survive incumbent competiton, they’re adding new revenue-generating services that cross-subsidise the ISP operation. And, as usual, one of the simplest ways to do this is through platforms and partners.

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August 20, 2007

Ring! Ring! Monday News: 20th August, 2007

These weekly news roundups are a new Telco 2.0 service; they are meant to focus attention on news items that might not be Telco 2.0-related at first sight, or big enough to warrant a whole post to themselves, but do contain real insight. They are grouped under the categories used in the rest of Telco 2.0.

Digital Youth

When Search Attacks: Participants in a fancy ID-business social network were horrified when a bot used to auto-populate their profiles libelled leading sci-fi author John Scalzi. He’d repeatedly written about disgraced congressman Mark Foley and used the word “paedophile”; guess what the bot decided to put in his “description” field?

Telco 2.0 Comment: Remember, automatic robots and highly personal information are a dangerous mix. If the AOL security breach was farce, this is tragedy, especially as Spock includes a function for users to vote on each other’s reputations.

T-Mobile Tees Up 3G: First 3G device for T-Mobile USA leaked…but the real news is that even without UMTS, data usage ex-SMS is booming.

Telco 2.0 Comment: T-Mobile is better known for its open-slather Web’n’Walk tariff in Europe, but how to explain its US data boom? Our theory is that its historic price leadership, going back to the days of Voicestream, captured a demographic that’s now adopting new gadgets and services rapidly. Note that AT&T just got FCC approval for the US’s first HSUPA data card - 2Mbits/s uplink, 7.2 down.

Digital Cities

Wi-Fi…Why? Cali-utopian geeks’ dream of free Wi-Fi everywhere doesn’t work. Maybe they could have a crack at the space elevator instead?

Telco 2.0 Comment: There’s a reason why mobile operators have lots of radio engineers, you know. And billing departments.

Paranoia in the palm of your hand: New Sprint service lets you browse sex offenders’ register from your phone; so you can find a sex offender in a hurry? No, of course, it’s for your peace of mind..

Telco 2.0 Comment: “Checking for local offenders is free…after normal data charges” It’s one way to get those metered bits moving. In Telco 2.0 terms, this is somewhere between Digital Home and Digital Town. Notably, some other carriers offer various security-related services; MTN in South Africa streams your home CCTV camera feeds to your 3G device and texts you if the alarm goes off. At least you can do something about that other than “move house” or “collect angry mob”.

Digital Politics and Regulation

AT&T spotted wielding censor’s scissors! Astonishingly, David “Stupid Network” Isenberg isn’t at all pleased that AT&T’s web music portal censored Pearl Jam being rude about President Bush. Perhaps it says more about AT&T that they’re hoping to make a profit streaming Pearl Jam over the web? Isenberg, again unsurprisingly, thinks this is an argument for network neutrality.

Telco 2.0 Comment: So that’s what they wanted all that IMS gear for! More seriously, as John Waclawsky said, monitoring is the first step to control.

ESPN’s efforts to have fewer customers are a roaring success; the cable-TV sports channel may give up on a scheme to restrict access to its website to customers of ISPs who pay it for the privilege.

Telco 2.0 Comment: The idea was that viewers who couldn’t get to see the videos would complain to their ISP; it could have perhaps been predicted that they would complain to ESPN’s website about not being able to see content on their website. Further, the economics of this are a little strange; there is no pot of gold in the customer ISP world for content providers to get their hands on, quite the opposite with margins tanking all over the world.

Too many zeros; Telekom Malaysia bills subscriber 17 times the GDP of the United States. Sorry, that should be “bills deceased ex-subscriber”…

Telco 2.0 Comment: When you do something often enough, even 99.999% sometimes isn’t enough.

Digital Product Innovation

3UK to offer cheap mobile data; 1GB/month=£10, 7GB/month=£25.

Telco 2.0 Comment: In the future, data transfer will be cheap. Cheaper and cheaper. How will 3 make money from this?

Nokia does identity and social networking: sadly, they call it Mosh. In other awful branding news, will Sprint-Nextel call its WiMAX service XOHM?

Telco 2.0 Comment: I, ah, hope you know what you’re doing with that ad budget.. Seriously, there’s so much interest in SNS these days it’s no surprise Nokia is interested, if only as a research project into user interfaces. It probably helps if your users can pronounce the service..Oh God, they’re actually going to do it…

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July 18, 2007


An SMS message! Who’s it from?

TELCO. (They can be anonymous for now.) Apparently they think I might be travelling to Europe, and therefore that I might want to know about their new roaming rates. Fair enough - that would be some of the contextual messaging stuff the people at Acision/ex-LogicaCMG Telco Products are always talking about, no?

Well, it would if I actually was travelling to Europe. Given that TELCO knows my phone has been in the same cell, near my home address, all day, you’d think they would have thought of this - strikes me that the trainload of phones zooming along the Channel Tunnel Rail Link every 30 minutes or so must show up quite impressively in TELCO’s switching centre as a lot of the same devices sending CC SETUP messages very quickly indeed.

They’re probably more likely to be heavy mobile users than the general population, too. Similarly, Heathrow Airport is full of people who certainly are travelling to Europe, as well as picocells deployed in the sprawling terminals..there’s surely an opportunity here to put some of the talk about advertising that “users will value” into effect, by targeting devices that have just turned up in those cells.

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June 18, 2007

Making advertising more personal and actionable

Sometimes a simple example makes things clear in your mind, particularly when it’s your own money at stake! We’ve a long description of the whole advertising value chain and the telcos’ role in it in our report, and two key operator assets are customer preferences and personal data. Here’s a real world case study of putting that to effect.

I’m selling the flat (US readers: apartment) I bought ten years ago when young, free and single. We’re moving into somewhere twice as big now there are four of us. A nice man came to put up a for sale sign outside last week. In fact, in windy Edinburgh this is an important skill, as signs poking out of buildings are prone to fly away with the next gust. I’d show you a picture, except I’m now 2000km away.

Anyhow, there’s a bit down the bottom to send an SMS message to a short code for more details. Which I duly did, as faithfully recorded by Nokia Lifeblog:

Back come the property details:

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June 4, 2007

Mobile Advertising: Is the Future Black for Blyk?

We like the hutzbah of the Blyk team. “A new pan-European free mobile operator for young people funded by advertising” sounds good in theory, and we applaud the bravery and boldness of its ambitions. But it breaks the principles for success in this market that we identified in our recent Market Study, and we believe its business model - in its current form - has little hope of success.

Here’s why:

As the company gears up for its summer launch in the UK, the PR machine has kicked into action and management have announced a rash of recent deals:

  1. Advertising partnerships with Coca Cola, Buena Vista (Walt Disney), I-Play Mobile Gaming, L’Oreal, Stepstone (on-line recruitment), Yell (directory services) and others
  2. A Billing, Customer Care and Partner Management platform agreement using MetraNet from MetraTech
  3. An equipment deal with Nokia Siemens
  4. An Ad-serving and Customer Profiling platform agreement with First Hop
  5. And, of course, a network agreement with Orange

But Do Customers REALLY Want What Blyk Offers?

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April 17, 2007

Telco 2.0 Event: Advertising Workshop Summary

Below is our summary analysis from the ‘Telcos in Advertising’ invitation-only workshop at the Telco 2.0 event on 29th March, including key recommendations for the industry. This supported the findings in our Market Study (btw, if you’re a GSMA member or 3GSM exhibitor, you can get a healthy discount on the licence price).

The day after the event we jetted to New York to help the GSMA with their Mobile Entertainment & Advertising Summit and learnt 3 additional things: 1.) Americans are more bullish than Europeans about the ability of mobile operators to generate significant new value in this space in the next 5 years (75% confidence rating vs 50% in Europe), 2.) stimulated by speaker Martin Sorrell (CEO, WPP), that the opportunity is potentially much broader and richer than ‘advertising’ per se - mobile marketing services and mobile-centric commerce, and 3.) this is an exciting new area to work in, and it’s about to scale up and industrialise quickly…Here’s the analysis:

The Benefits Of Mobile (and On-Line) Channels Aren’t Always Obvious To The Advertiser

We kicked off the workshop with a presentation from the new customer group: the advertiser. John Baker, Managing Partner at Ogilvy Interactive, highlighted several of the factors which would drive adoption of the digital and, especially, mobile channels from the advertiser’s perspective:

  1. Cost - make it cheap (and simple) to advertise
  2. Demonstrate audience growth
  3. Illustrate customer responsiveness through this channel - i.e. show a clear ROI to advertisers
  4. Be patient! There is a need for cultural change amongst advertisers. John highlighted this as a key barrier from the demand side for on-line and mobile advertising because brand managers and media buyers are measured and rewarded using metrics, such as Customer Reach, which do not easily square with the digital channels (where the focus is on engagement and interactivity).

Responding to these, John then suggested four areas of focus for Telco operators to add value:

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March 26, 2007

Mobile ad networks are a stop-gap: the real opportunity is elsewhere

We’re delighted to have Damian Glover, a writer for the Economist Intelligence Unit, as ‘analyst-in-residence’ supporting the ‘Telcos Role in Advertising Value Chain’ event in London this Thursday (29th March), run in partnership with the GSM Association. Here Damian shares his thoughts on Mobile Ad Networks:

To Boldly Grow…

Mobile advertising networks such as Admob, Third Screen Media and Nokia’s recently launched Ad Service are predicated on large-scale media consumption on mobile devices. Whether or not this transpires, I believe media-hosted mobile advertising will prove to be a sideshow to the main event.

It’s easy to understand the current interest in extending the advertising network model to mobile. Fixed-internet ad networks such as Google AdSense,, ValueClick, Tribal Fusion and BlueLithium have made rapid inroads into the digital advertising market during the past few years. According to comScore, at least 15 ad networks each reach over a quarter of everyone online today. Moreover, this reach is being translated into revenue: ad networks now account for a quarter of online display advertising, according to e-consultancy.

The rise of the online ad networks has been driven by the explosion of blogs, niche interest sites and other long-tail web content, coupled with a homogenous delivery platform (the web browser) that permits audiences to be tracked and ads served across a diverse range of properties.

It’s advertising, Jim, but not as we know it…

However, two conditions make mobile advertising very different to the on-line world:

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March 12, 2007

Telco 2.0 Report Exec Summary: Telcos’ Role in Advertising Value Chain

Things are really getting busy ahead of our event now but I am delighted to have got one thing off my plate: the Telco 2.0 Strategy Report: Telcos’ Role in the Advertising Value Chain is complete!

I sent it off to 3 clients that had pre-ordered copies on Friday and was delighted to get a couple of positive responses this morning from them. One said it was “exactly the level and depth we hoped for” and that it would “inspire us in our work building up an advertising platform”. It certainly doesn’t lack depth - 150 pages of powerpoint.

The report’s key differentiator: it is strategic and explores WHAT needs to be done by operators and other value chain players to grow the advertising opportunity into a sizeable market (as well as cotaining lots of analysis, market sizing, case studies etc.).

We wil explore the actions that will drive success in more detail at the advertising workshop on the 29th March but, in the meantime, delegates and non-delegates alike might find the executive summary of the report useful.

If you can’t read it easily on here then click on the logo bottom right and it will take you to the slideshow where you can view it full screen.

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March 8, 2007

Mobile Advertising - The Opportunity is Off-Portal

More context here in preparation for the ‘Telcos in Advertising’ workshops on 29th March, London (and 30th in NYC):

Writing our report, Telcos’ Role in the Advertising Value Chain has been like giving birth: arduous in delivery, but ultimately life-affirming. Thanks to Alan Patrick at Broadsight for his help with producing 140 pages of solid beef (worrying mix of metaphors with giving birth and cows here - time to stop).

During background research on the subject, I had the pleasure of meeting Andrew Bud of mBlox. Andrew is not only a charming man but something of a rocket scientist (comparable brain power to STL Partners’ own guru, Martin Geddes). He has built mBlox into the global leader in SMS billing services for mobile content, so knows a thing or two about being a platform player and building scale. He says mBlox’s success has been built on aggressive pricing and leveraging scale economies.

I was delighted to see that Andrew had reached similar conclusions as we have about the opportunity for operators in advertising: the money ain’t in Ad-funded content and telco services, it’s in enabling the on-line and mobile advertising value chain to become more effective and efficient. Compare the two charts below: one from our Telco 2.0 Advertising report and one from Andrew:

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February 22, 2007

The Fragmented World of On-Line and Mobile Advertising

As we prepare for our big ‘Telcos in Advertising’ workshop on 29 March, here are some thoughts:

What we need to do is learn to work in the system, by which I mean that everybody, every team, every platform, every division, every component is there not for individual competitive profit or recognition, but for contribution to the system as a whole on a win-win basis. William Edwards Deming

For those not familiar with Deming, he is widely recognised as the man behind the massive improvement in quality and scale in the Japanese manufacturing industry after the Second World War (providing a precursor for such things as Total Quality Management and Just-in-Time in the 70’s and 80’s).

Current Mobile Advertising Fragmentation
His philosophy was in the forefront of my mind as I wandered around the dozens of exhibitions from companies offering mobile advertising solutions at 3GSM last week. My guess is that there is probably 100 start-ups focused on this area (and another 100 just about to launch) plus a plethora of established vendors in adjacent markets looking to position their existing offerings in this space. Several operators (O2, Orange/FT, etc.) are conducting trials with different start-up enablers to explore the required customer experience for such things as mobile portal advertising.

The Need for Scale - A Reminder
All this is natural enough, especially in the modern world where VC’s are reasonably happy to back a few businesses in a hot area on the basis that one might make it big. But is it sustainable? Well, we have already indicated the Telco 2.0 view that a large-scale Telco advertising platform is key if this market is going to develop to become an attractive proposition to operators. Clearly, there is a role (and potentially an important one) for start-ups in this space but the critical thing is for operators to develop an open, standardised platform which unlocks the widest possible audience of Telco customers to advertisers.

Every other large-scale networked market has 1 or 2 dominant platforms (Windows on the PC, Google and Yahoo! on Web search, GSM and CDMA for mobile telephony, etc). At the moment on-line and mobile advertising remain fragmented from an operator standpoint:

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February 8, 2007

Mobile Entertainment & Advertising - London & NYC events

We’re delighted to be collaborating with the GSMA on two linked events covering telco’s role in Entertainment & Advertising: a European-focused workshop in London on 29th March (part of the Telco 2.0 Industry Brainstorm) and a N.American-focused event in New York City (The Mobile Entertainment & Advertising Summit) on 30th March, details here.

This builds on a major research programme we’ve been running with GSMA, (described in a previous post on this blog here).

Both the London and NYC events will use our ‘Mindshare’ interactive approach to fully engage the participants, and we’ll be presenting the findings from our research and analysis at both.

We are currently briefing the speakers for the European event (they include VPs from BT and Deutsche Telekom) while, in New York, speakers include VPs from CBS, Yahoo!, Vodafone, enabling vendors and a special appearance from Martin Sorrell, CEO of WPP (the world’s largest advertising group, if you didn’t know).

Agenda for London here, and for NYC here.

(If you would like a taster, you can get a private presentation of the research at the Telco 2.0 Meeting Room at 3GSM on Tues/Wed next week - Hall 3.1 (HS91). Just book an appointment with us.)

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January 17, 2007

Advertising Opportunities: Do Telcos Understand the Value of their Assets?

Knock Me Down with a Feather…Another Telco 2.0™ Survey?
In the last of our Autumn and Winter series of surveys, we have now opened the survey on Telcos and Advertising. Why 3 surveys? Well, they add real insight to the 3 Telco 2.0™ Strategy Reports we are publishing: Telco 2.0 Market Study, Strategies for Growth in an IP based World (updated January 2007); Consumer Voice and Messaging 2.0: Telephony and Messaging meet Skype and Yahoo!; Telcos and Advertising: How to Generate Value. And anyone who completes the survey gets a FREE set of summary results.

For the Advertising survey, we have been very lucky that the GSM Association have sent the link to mobile entertainment and advertising executives in their database and OgilvyOne have circulated the link internally to 400 people in their Telco Taskforce. We should, therefore, get some terrific input from the advertising community (see below for some early indications).

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November 14, 2006

More Social Networking Action from Operators

The rush to embrace social networking by mobile operators continues with the news this week in The Times that MySpace is in discussions with the UK’s mobile operators about a tie-up. This is in addition to the expected announcement of a deal between MySpace and Cingular in the US.

2 Strategies - Organic vs Partnering

UK mobile operators appear to be pursuing a dual-strategy:
1. They are developing their own social networking sites, such as 3’s SeeMeTV and Kink Community (which has 50,000 paying subscribers and 350,000 postings a day) and O2’s LookAtMe where users pay 10p to download video clips created by other users.
2. The are exploring deals with established PC-oriented social networking brands such as Bebo, MySpace, YouTube and Second Life.

This approach makes sense. Even if the organic approach never develops, operators will learn valuable lessons about the drivers of value for the social networking phenomenon and, more importantly, pick up critical information about usage and behaviour in the high-value ‘Youth’ segment.

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November 2, 2006

Google & YouTube to combine Mobile + Comms + Content

We have long banged on about the need for operators, particularly mobile operators, to learn from the Web 2.0 social networking companies that combine user-generated content with a forum for chat and interaction. At the Telco 2.0 event I detected a distinct reluctance from operators to embrace this ‘challenge’ (opportunity?). Advertising revenues are for some reason considered dirty and users that don’t generate big ARPU’s are automatically low-value (tell Google that).

Now it seems that Mohammed is going to the mountain as YouTube has announced that it will be developing a system where its users can share videos created on the mobile without having to upload them via a PC.

The Red Herring article also discusses the fact that a day later Google announced that it has a very fast, very friendly Java application for Gmail on the mobile. Operators have done ok with the Blackberry, but have never really made in-roads into the consumer mobile email market (no consumer will pay £45 a month for the Blackberry service). With data rates coming down and the internet players providing mobile email clients, I wonder whether operators have missed the boat?

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October 10, 2006

Vodafone leading the pack in Social Networking?!

Knock me down with a feather, I have just learned that Vodafone is planning to launch a range of services on the virtual world website, Second Life. I was arguing last week at the Telco 2.0 event that operators need to learn from the social networking sites and develop offerings that yoke together communications and content. I never thought that Vodafone would be first into this (assuming they launch before O2 gets its deal with Bebo sorted).

I will mine my mole at Vodafone to fully understand the business model. I suspect that the Vodafone services are paid for by on-line users. This would be consistent with the Second Life business model where users buy products and services for their virtual world rather than receiving free goodies paid for by advertisers (users spend a hefty $500k every 24 hours and the growth rate remains very high). Such a model would be easier to swallow for Vodafone. I cannot believe that they would bear the prospect of giving those wonderful mobile services away for free and receiving advertising money instead.

More to follow.

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Microsoft Launches Mobile ‘Click to Call’

For those that missed it, Microsoft have just done a deal to use Ingenio’s pay per call advertising service on Windows Live web search for mobile. Details here.

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October 9, 2006

Telco 2.0 event: Ad-Funded Breakout

James Enck has already blogged extensively on Day One of the Telco 2.0 event and the Broadband Connectivity breakout on the second day and my colleague, Martin Geddes, has given some snippets from the Voice and Messaging day.

I ran the Advertising Funded Content breakout which attracted between 30 and 40 delegates (people moved around throughout the day and numbers therefore fluctuated). Delegates will receive all the verbatim output from this and the other breakouts as well as the plenary session on the first day, together with a summary analysis (the ‘So What?’) in the next few days. We will also send you a link to all the presentations. However, for those that couldn’t make it, here is a brief overview of what we covered in the Ad-Funded session.

After a little pub quiz on content and mobile entertainment to warm up participants, I did a quick presentation outlining the issues and hypotheses we would debate throughout the day. The overall STL thesis was that operators could no longer treat ‘content’ as a discrete proposition but needed to see it as an extension of their core communications proposition. The social networking websites are a great example of how content and comms are intertwined to provide a richer contextually-relevant experience for users. And boy, do these sites generate advertising revenues:


It’s obvious why Google has paid $1.6 billion for YouTube - they think this number is going to grow even bigger.

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September 13, 2006

Ad-Funded Content: A Utilitarian View

I have just had an enormously enjoyable call with Rory Sutherland, Vice Chairman & Creative Director at OgilvyOne Worldwide. Rory will be speaking at the Advertising-Funded Content workstream at our Telco 2.0 event and, judging by our call, will be well worth listening to. He has an unfair advantage over many others in that he reminds me strongly of the doyenne of cricket commentators, Henry Blofeld, when he speaks which makes him very easy to listen to.

I am ashamed to admit that I assumed Rory would be a sterotypical advertising man and espose the views of Hollywood/Bollywood entertainment as being the key driver of digital advertising. Not a bit of it. He reminded me of economics lessons from years ago with his utilitarian views on content. For those a bit rusty on their Jeremy Bentham and John Stuart Mill, Rory subscribes to the view that content provides “the greatest happiness for the greatest number” by focusing NOT on entertainment (“I can get that anywhere”) but on CONVENIENCE and RELEVANCE. His view is that The Ivy is not the “best” restaurant in the world because there is only one and so the ability to serve a large number of people is poor - something like MacDonald’s is much better in terms of the overall value it provides.

Fair enough, if you take a macro view (though any individual dining at The Ivy would probably take issue). Applying this concept to mobile content, Rory says that operators should focus on content that makes users’ lives easier - such as SMS payments for the London congestion charge.

He says that advertisers will follow a strong content offering with targeted advertising (witness the social networking sites) but that operators need to move away from a small volume of high-quality content to a much higher volume of cheaper, contextually relevant offerings.


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September 11, 2006

User Generated Content is King for Video on the Net

A new survey on video on the net usage from AOL in US shows that nearly the same number of people watch ‘amateur video’ (‘User Generated Content’) as they do Sport’s Highlights. What does this mean for IPTV business models?

Further ommentary at the Chaotica blog.

We’ll be probing these issues with the Marketing & Content Director for IPTV from Fast Web (Italy’s no. 2 broadband provider, and one of the world’s most experienced IPTV companies), and Ole Obermann, VP for Digital Business in Europe for Sony BMG (who are experimenting with new models re music-related content), on Day One of the Telco 2.0 brainstorm on 4-5 Oct.

The ‘Ad-Funded Content’ workstream on Day Two, looks in detail at how we can make money out of this phenomenon.

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September 7, 2006

Ad-Funded Content: Big Revenues…but for Whom?

The interest in Advertising-Funded Content is hotting up and Informa have recently published their prediction that the market will grow to a whopping $11.3bn (£6bn) in 5 years time.

Nice money… if you can get it. And getting a slice of the action seems to be on the radar screen for many operators. The mobile players in Europe, in particular, are recruiting advertising talent heavily, as they see this as a contributor to filling the revenue and margin hole created by market saturation and increased competition from MVNOs as well as new compeititors and technologies.

But Google, the masters of web advertising are not going to leave this market alone. They recently announced trials of their Mobile Adwords capability in US, UK and Germany. This enables websites to deliver adverts that are configured for mobile devices together with click-to-call functionality.

If Google and the other internet giants win the ‘battle’ (if one really develops), then operators may benefit from increased data transport (more people viewing cheaper content) and some additional voice traffic from click-to-call.

The trouble is, with prices in free fall in these areas, it remains questionable whether this will add anything to the top and bottom line. And what are they going to do with their advertising talent - look to drive more on-portal traffic with an advertising-funded content capability of their own?

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August 29, 2006

Advertising-Funded Content: A Cynic’s View

Concerned that I was getting too enthusiastic about the opportunities for Telcos to carve out a niche in the advertising space, I put in a call to a mate who has a relatively senior marketing role within a global mobile operator (let’s call him ‘X’).

X has been around the industry for a while - he was a product marketing manager for SMS way back when - “total joke, I was a little nobody put on this minor product that was going nowhere and then BOOM! the thing takes off, much to everyone’s surprise…”. He retains a healthy skepticism about the performance and future prospects of operators believing them to continue to chase mirages of revenue growth (3G, HSDPA, MMS, Mobile Content etc. etc.), rather than accept that the market has peaked and that the future holds near-term cost-cutting ( “slash ‘n’ burn” ) followed by long-term operational efficiency ( “yield management” ) with, at best, 2% per year earnings growth.

Here’s a highly edited ‘transcript’ of our call:
Me: So, tell me, where do you see the opportunities for operators to get involved in the advertising value chain?

X (laughing): Advertising - the latest great white hope, eh? We are recruiting like mad in this area and senior management see ‘the google business model” as being the next big source of revenue growth. But why? What do we offer: the portal sites can provide all the value that advertisers need? We operators don’t bring anything to the party - we can’t add any value. And, in any case, advertising (like most web browsing), just doesn’t work on the mobile phone - it is a crap experience. We will end up as an ISP and ISP’s don’t get a chunk of Yahoo! and Google’s advertising revenues.

Me: What about the customer information you hold on customers and the AAA benefits of the SIM? Couldn’t these be used to (a) provided better content and advertising to customers and (b) a better feedback loop to advertisers?

X: But we don’t understand our customers! We have a billing relationship and we know how much they spend but we don’t know what they spend it on beyond voice and messaging (mainly because so little is spent). Google, through its search facility, knows what I want at that moment and can provide relevant advertising at that moment. But we are rubbish at this - it is not, as you consultants say, part of our core competence ( ouch! ). Our portals are rubbish - noone wants to use them.

Me: But what makes them rubbish - bad structure, wrong content or over-priced?

X: All of the above but probably the last two are key - content is not compelling and it is too expensive.

Me: Well, how about outsourcing the portal to the specialists but with a deal to provide integration with your identity, CRM and network assets to promote personalised advertising? Higher advertising revenues would enable you to drop the price of content and potentially even make it free, like the new service annouced by Universal.

X: This all sounds fine in practice but even if we do outsource our portal to a Yahoo!, I just can’t see us managing the process effectively. I think advertising will be a small revenue stream but there is no way it is going to be the industry-changing event that people expect.

Me: I agree that advertising’s importance MAY have been overblown, but don’t you think that many of your objections are not really structural but based on your cynical belief that operators will execute badly? If this is your premise, then aren’t you assuming that they will never adapt or develop effectively.

X: Oh, I think you are absolutely right. But let’s face it, all the empirical evidence is on my side!

I am trying to persuade X to attend the event on the 4-5th October and expound his “cynical-bah, humbug” views about this at length.

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August 23, 2006

YouTube’s 16 million Visitors Ripe for Advertising Revenues

The social networking phenomenon on the web shows no signs of abating. YouTube has just broken into comScore’s Media Metrix Top 50list for most visited sites in the US. YouTube had 16 million unique visitors in July 2006, up 20% on June and a far cry from the 58,000 early adopters who hit the site in August 2005. If the minutes of viewing were aggrated, it would be in the top 5 terrestrial TV channels in the USA. These figures really seek to underline the massive growth in social networking and self-expression sites which enable users to exchange personal videos and pics (as well as illegal pirated content).

Yesterday, YouTube also announced its first steps into the advertising arena with a Paris Hilton channel dedicated to promoting the singer’s new album. At the time of writing this, 125,000 people had already viewed the new channel. To date, YouTube has been remarkably low-key with advertising — a few Google ads are about the only thing I have ever come across. But with spiralling bandwidth and development costs and the prospects of a juicy IPO or acquisition, the company is keen to grow its revenue streams.

YouTube, MySpace, Flickr and the other high-profile social networking sites are just the tip of the iceberg. It seems there are sites for every social community.

Advertising appears to be the best means to support these sites and some of the content provided within them. But to date, web-based advertising has shown that Telcos need not be a part of the mix (beyond carrying the bits and bytes). On the web, the destination site (e.g. social networking or search engine) manages the relationship between user, content and advertiser. Operators can insert themselves into this relationship in their own walled gardens - Orange World, Vodafone Live! and T-Mobile’s T-Zones for example (although even this has proved tricky). It is, however, much more difficult for them to carve out a niche when users are free to roam the web from their mobile device — the Telco 2.0 world.

It seems that Telco’s have an opportunity to play in this space and potentially leverage some of their (unique-ish) assets:

  1. Authentication, authorisation, and accounting controls - who the customer is, what service they are buying, how to bill them. Useful not just for delivering and billing for services but also for tracking advertising effectiveness.
  2. Identity. Operators can federate the existing phone number system with the Internet services, preventing users creating multiple identities where this is undesirable.
  3. Customer relationship Management - a history of customer preferences and usage, for more contextual advertising. By having geographic, demographic and preference data, the telco is in a better position than other players to insert the right ads from a selection offered by a partner like Google.
  4. PSTN integration - for things like click-to-call. For stimulating core services and faciliating consumer response to advertising.

The question is can operators come up with a valuable and sustainable business model for advertising-funded content in the Telco 2.0 world before the opportunity disappears? Current platform plans appear long on real-time session control, and short on access to the other customer data and billing assets.

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August 15, 2006

Mobile Advertising: A Working Example

I had lunch today with Richard Marshall the CEO of ad360 and the Technical Director of Rapid Mobile. Rapid Mobile have developed some very successful software which enables punters to gamble on Betfair from mobile devices.

Richard gave me a demonstration of the ad360 technology which he will also be demonstrating at the Advertising Funed Content breakout of our Telco 2.0 Brainstorm. This enables operators to load a brief advertisement on to a user’s phone while they are waiting for content to load.

As he explained, most content - text, pics, video etc. - has a short delay before it loads on the mobile phone. During this lag, a piece of advertising is popped on to the screen. This can be a simple ‘awareness’ ad or can have a specific call to action (click to connect or redeem this discount voucher).

Because each software download has a unique identifier, the click-through and voucher redemption rates and, potentially, user behaviour can be tracked by the operator and/or advertising company. This provides much greater value to advertisers than broadcast or even paid search advertising.

As with web search advertising, the adverts can be made contextually relevant. For example, if I click on a food-related link then an appropriate foodie advertisement is popped to the screen. When this is combined with my individual preferences (perhaps I love Burger King but hate the Big Mac?) then the value me as the user is also much higher.

ad360 is still a fledgling company (hence no URL), but the technology is compelling. Richard is in discussions with major mobile operators and handset manufacturers. Delegates at the event will enjoy this practical example.

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August 9, 2006

Verizon Music Store: Still Swimming in Chocolate

A good commentary here of Verizon’s latest decision to remove the exorbitant $15 per month subscription charge for its download music service and launch the service on a sexy new phone - The Chocolate.

Shock! Horror! Customers were not prepared to pay a hefty subscription PLUS airtime charges PLUS find that they could not play MP3’s on their phones (the Verizon software disabled this).

The current move looks a step in the right direction, but it still costs $2 to download a song over the air to your phone and only $1 to do it via your PC (from which you can synch to your phone for free). Verizon are looking to follow Vodafone’s carpe diem approach (embodied in the Now campaign) and get users to pay a premium for an ‘impulse’ mobile download.

Essentially, Verizon is still committing Telco 2.0 heresy by asset hoarding and retaining the culture of scarcity. “It’s more difficult to get music on the move so we’ll charge you more for it.”

Wrong approach. Make it easier for customers to get music on the move and grow the overall revenue pie (taking a good slice of it along the way) by dropping the price and building in functionality that makes selecting music simple (recommendations etc.). Telco’s remain obsessed with per unit/transaction/minute margins. This can be dangerous since it keeps prices high and limits market growth. What about dropping consumer prices for content and seeking market growth PLUS alternative sources of revenue, such as advertising?

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July 31, 2006

Phone Book 2.0

Navin R. Johnson: The new phone book’s here! The new phone book’s here!
Harry Hartounian: Boy, I wish I could get that excited about nothing.
Navin R. Johnson: Nothing? Are you kidding? Page 73 - Johnson, Navin R.! I’m somebody now! Millions of people look at this book everyday! This is the kind of spontaneous publicity - your name in print - that makes people. I’m in print! Things are going to start happening to me now.

— Steve Martin in The Jerk (1979)

Naturally, the new phone book’s here. All wrapped up in its protective plastic wrapper, here it is:

So to get to the point, what does a Telco 2.0 do to make Phone Book 2.0?

Continue reading "Phone Book 2.0" »

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July 3, 2006

Advertisting Funded Content - HYPOTHESES

Futher to the Broadband Connectivity and Voice and Messaging hypotheses, here are the Advertising Funded Content Hypotheses we will be testing at the break-out session on Day 2 of the Telco 2.0 Brainstorming event.

  • With Voice revenues and margins under pressure, Operators are seeking alternative sources of growth.
  • Content has long been held up as a future source of growth for both fixed and mobile players.
  • To date, the main source of content revenues for Fixed Operators has been when they have moved directly into adjacent markets, such as cable & media services, with little revenue generated over their traditional telephony networks.
  • Similarly, outside Japan and South Korea and excluding SMS, Mobile Operators have had had little success in generating content revenues.
  • Operators are still enthused about the prospects of content distribution revenues with many launching IPTV and Video on Demand services recently.


  • Structurally, the content distribution market is tough to make money in:
    • There are a small number of powerful content rights companies that currently make less than 2% of revenue via digital channels (therefore telco’s are not important as a channel currently and have little leverage).
    • There is a lack of effective Digital Rights Management (DRM) solutions in the digital channels, making content rights owners reluctant to distribute through them.
    • There are many alternative channels for content, including the internet which is FREE.
    • The TV and Cable companies make as much (or more) money from advertising than they do from content distribution - Pay TV generates less revenue in US than TV advertising.
  • To date, Operators have done little to differentiate their content distribution offerings and have, instead, adopted a me-too approach - e.g 3G TV.

Continue reading "Advertisting Funded Content - HYPOTHESES" »

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June 30, 2006

Content Distribution: Carrots & Sticks Required

The Register has just published one of the best articles on Content (specifically IPTV and VoD) that I have read in a long time. Alexander Cameron goes into great depth on the issues faced by content owners and distributors (telco operators and ISP’s) in sorting out a mutually acceptable business model for the distribution of digital content.

A word of warning: this article is not for the faint-hearted. It is 9 pages of solid beef so make sure that you set aside a good half-hour.

For the modern-day busy bee, here is our (much shorter) analysis of the piece:

The Challenge of DRM
Cameron outlines the essential paradox faced by the content industry: How to make content available for users to copy across their devices while preventing illegal copying from one device to another? For example, once users have bought a song they feel that they should be able to listen to it on their iPOD, PC or phone and not have it tied to a specific form factor. However, content owners are loathe to offer this as it opens the market up to the abuse of illegal copying via P2P networks.

The Carrot and Stick Approach
What’s needed, according to Cameron (and I think he’s right) is both better content services (so people feel willing to pay) combined with an effective deterrent. Currently, neither really exist.

Better Services…
Telco operators (and other digital distributors) are not providing a simple, differentiated content distribution service that customers are willing to pay for:

  • The volume of truly personalised content on my phone is low
  • The price of content on my phone is too high
  • My ability to copy and manage content is limited

Continue reading "Content Distribution: Carrots & Sticks Required" »

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June 21, 2006

Big Brother & the Art of Advertising-Funded Content

The BBC (no advertising), ironically, published an article recently about the advertising success of Big Brother for Channel 4.

It seems that Channel 4 have been extremely successful in generating big revenues in 3 areas:

  • Broadcast Advertising & Sponsorship
    Bog-standard advertising revenues from the TV broadcasts are higher than for most programmes not just because of the high viewing figures that Big Brother generates, but because the programme brings in the 16-34 year old age group that watches less TV than other segments. The programme sponsorship alone is reckoned to be worth £4.5m.
  • Text Voting
    Viewers are encouraged to participate and interact with Big Brother by voting on who they think should stay in the house or be unceremoniously thrown out (a real blessing if you ask me, it must be sooo boring). In 2005, the final night generated 6.4 million texts. At around 50p per text, this single night generated £6.4m in revenues (to be shared between Channel 4, the production company and the network operators).
  • On-Line Advertising
    This is perhaps the most interesting area for Telco’s. No revenue figures are revealed, but Channel 4 makes money by showing 12 free clips a day of what is going on in the Big Brother house with each clip preceded by a 30 second advertisement. The Big Brother website has generated more than 100 million hits (presumably from those elusive 16-34 year olds), so the advertising revenue is likely to be significant.

Seems like there is money in content after all.

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June 15, 2006

Connectivity: It Ain’t What You Do…It’s The Way That You Do It

There has been a bout of mini-hysteria in response to the latest gizmo to come out from those clever chaps at Google Research. In what amounts to an academic paper (co-published with Michael Fink of the Hebrew University of Jerusalem), they describe how they can pick up the audio output from TV programmes on the microphone of a viewer’s laptop. The laptop then ” irreversibly compresses the viewer’s ambient audio to summary statistics” (their italics). The Google lads then decode the stats to determine the programme and provide a 4 key services (described below) to the viewer.

In a nice turn of phrase, they describe this as mass personalisation as it combines the mass media of broadcast TV with the personalisation of the Internet (they provide personalised services to people based on what they are watching).

I want to quickly put aside the privacy/security issues that many people are wailing about. “This is big brother” and “They are eavesdropping” seem to be the big cries. Well, firstly, they make it pretty clear on page 1 of the paper that the computation to turn the audio into statistics is done locally, and irreversibly (by the viewer’s PC), not by Google.

Secondly, even if they could eavesdrop on conversations, is that so very different to today’s Telco Operators? Operators could eavesdrop on our calls all the time. In some parts of the world they are discouraged by legislation, in others I suspect they are postively encouraged to do so by the state. Surely, it wouldn’t be too tough to protect us with similar regulation or legislation from what Google proposes?

Sorry to be unfashionable, but I think that what they have done is pretty smart. It demonstrates why they are light-years ahead of many Telco’s when it comes to the Telco’s own core competence: Connectivity.

To explain this, it is worth looking at the 4 applications that the Google researchers suggest could exploit the technology:

Continue reading "Connectivity: It Ain't What You Do...It's The Way That You Do It" »

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June 14, 2006

Advertisers Enthusiastic about Digital Media

The American Advertising Federation recently conducted a survey on digital advertising.

Highlights of the survey include:

  • 91% of advertisers find the online media environment “empowering to advertisers, allowing the ad industry to shape its own development”;
  • Digital media offer high ROI to advertisers (especially Paid Search);
  • User-generated content sites (MySpace, YouTube, Facebook) are preferred to Blogs(!) which are “too risky to advertise with due to lack of predictability of editorical content.” (Shame…)
  • Paid Search will increase from 9% of the online advertising budget in 2005 to 11% in 2006 and 23% in 2010.


  1. Advertisers like to advertise in contextually relevant sites where they know visitors will be interested in their products and services. (Surprise, surprise);
  2. Advertisers will pay good money to be connected to the right people.

Operators currently connect people, how long until they cotton on that they could get a slice of the action by connecting advertisers and consumers?

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June 13, 2006

Content: A Case of “Emperor’s New Clothes”?

We had an interesting email from Robert Shaw, Deputy Head of Strategy and Policy Unit at the International Telecommunication Union (ITU) in response to our first post on Content. By coincidence, he gave a presentation on content last week in Lithuania. His view its importance to Operators is overblown. The link to the .pdf of his presentation can be found here, it’s well worth a read.

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Content - Regent or Rubbish?

The debate over the future value of content, particularly mobile content, to Operators seems to show few signs of abating. Currently, there seems to be 2 camps:
(1) Those who see content as the lifeblood of the industry, and
(2) Those who believe that content will never make any money for Operators.

Over the next several months in the Advertising & Attention section of the Telco 2.0 blog , we want to examine this debate in detail and also explore the option of a ‘Third Way’ for Opeators to make money out of content & advertising - one that leverages their unique network, billing and customer relationship assets.

Content is King?

Most Operators and many established market research organisations still believe that content will be a huge source of revenue (and profit) for Operators. Typical evidence cited includes:

Continue reading "Content - Regent or Rubbish?" »

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Telco 2.0 Strategy Report Out Now: Telco Strategy in the Cloud

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