The consensus from panelists in the first major discussion of the Open Mobile Summit in London today was that mobile data access will increasingly be bundled with paid apps as operators push to develop more efficient ways of using an overstretched mobile spectrum. That might see Angry Birds, for example, available to use even on overseas roaming at no extra cost.
Rovio’s ‘mighty eagle’ [insert quip here] Peter Vesterbacka said that as long as the objective is long-term audience growth over short-term money making, bundling data with apps is a good idea. “We only care about our fans and our brand, so if it’s a great experience, we’ll do it.”
Spectrum needs massive investment
Olaf Swantee, executive vice president of Orange, warned that networks needed major investment if they are to support the growth in demand for data services. “In Europe, we need massive investment in networks that are seeing double data growth every year…. average revenue per user is not going up… we require governments to provide the digital dividend is a fair way to avoid the escalation of pricing for consumers. And we need to spend time and energy on the networks we build now so that they are really capable of dealing with growth.”
Swantee claimed that what Orange spend on networks improvements is more than Apple and Google combined, but that connectivity needs to be considered in new ways in pricing bundles rather than just hiking prices. He added that payments via mobile are also a big growth area and not just in the developing world, were few people have credit cards or even bank accounts.
“This is not not where we take the bank’s role - we just facilitate the service… it’s an important area and not just in Africa; payment transfer is interesting for mature markets, where sharing small amounts of money can be useful for the immigrant or youth sectors.”
The unfulfilled promise of mobile advertising
Still equivalent to just 1% of US TV advertising spend, mobile advertising has along way to go. Rovio’s Vesterbacka said that shift will just take time because of the establish devalue chain. “There are people out there paying $300,000 for a 30-second ad during Glee. We can do a lot for $300,000 in Angry Birds…” As for commission, Vesterbacka said it’s right that Rovio takes 95% of revenues because they put in the work building the game, and even Apple’s 30% take is very fair compared to revenue deals they used to have to negotiate with operators in the days before the app store.
Amazon’s mobile services lead Aaron Rubenson said developers are very interested in introducing advertising. “There’s a whole new realm of opportunity operators have because of the billing information they have, the context of information that game developers have, the social analytics layer - the possibility to serve up much more relevant targeted ads.”
Operators vs apps
“It’s not in our core competence to build an app store,” said Deutschmann. “Our core competence is in helping the customer find the right device, the right tariff, the right apps and network functionalities.”
Swantee pointed to the after-sales role for operators. Though iPhone is supposed to be a simple experience for consumers, Orange has found that at least 25% of new iPhone customers are willing to pay for a start-me-up service that explains how the phone works and how to get started. “Customers in stores don’t even realise that choosing a device also means choosing an operating system and an app store.” Until there is more standardisation between platforms and app stores, operators will continue to play an important role with services like contacts updating between phones with different operating systems. “We’ll try to move that forward with other content,” said Swantee.
“It would be great if there was just one app store.” said Vesterbacka, “but that’s just not going to happen. But more app stores help more people into the market.” Ribenson added that app stores have a major role in app discovery as well as billing. For Amazon, that means tapping its 137m-strong existing customer base with purchases and ratings they already know. “We’ve taken the first steps towards a unified vision with Kindle - buy on Kindle and you can read on an app on any device.”
Deutsche Telekom’s senior vice president of mobile products, Dr Rainer Deutschmann, said the company has already introduced an easier to manage data roaming service which lets customers login online to buy day passes.
“There should be lots of innovation in the way we provide connectivity. That might include paying $5 to speed up one particular download, or like our roaming day pass, an alert that lets you know when you’re used 80% of that allowance.” Deutschmann pointed to Facebook Zero, a free, paired-down Facebook service that the social network has negotiated with local operators. “Freemium apps are not truly freemium because users still have to pay for access.”
“We need spill, entry-level tariffs for people who haven’t used a smartphone before, another tariff for advanced users and another for business,” said Deutschmann. “It’s not just about downloads, but about speeds for example, or getting a package designed to optimise games.”
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Good to see some old fashioned activism still goin on out there (of course it does lead to a Facebook page ;)
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