Vodafone Ireland Launches Its First 4G PAYG Smartphone

Vodafone Ireland has launched its first 4G smartphone for all Pay As You Go customers. The Vodafone Smart Turbo 4 handset costs €99.99 (US $135.25) and can be purchased in stores and online. When combined with the Vodafone Red PAYG package, which costs €30.00 (US $40.58) and is valid for 30 days, subscribers get access to the 4G LTE network with unlimited calls and SMS and 1 GB of data.

The Irish mobile market comprises five mobile network operators and a small number of MVNOs, so the competition level is high. Currently Vodafone Ireland is the leader in the market, with a 42 percent share. The operator continues to roll out its 4G LTE service, which at this point covers six major cities and over 220 towns.

Recent reports indicate that two thirds of mobile subscribers in Ireland prefer the Pay As You Go prepaid offers, so it seems that Vodafone Ireland’s new device will fit the market’s expectations well. The Vodafone Smart Turbo 4 handset allows cost-conscious customers to access the 4G LTE network and all its benefits without any additional costs or long-term contracts. The device affords the operator a further opportunity to promote its 4G LTE network, which will not only lead to fuller utilization of the network but should also increase revenue. Customers will be able to become more familiar with all the capabilities of 4G without spending a lot of money on a high-end device.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Telecommunication Plans Scored Using Propriety Model.

In today’s competitive mobile markets, consumers are faced with an array of choices when it comes to mobile plans.  Complicating matters is the fact that operators are constantly adding features, offering special deals and introducing new plans to the market as they vie for market share.  In an attempt to promote these new offerings, advertising expenditures grow each year.  But in the end, all this results in is a more complex and confusing decision-making process for consumers.  What is required is a tool that allows operators to clearly communicate the value of their offerings in such a way as to allow consumers to easily understand and perceive it. 

The Tarifica Score is such a tool.  It enables objective, numeric, apples-to-apples comparisons of mobile plans among operators and markets using a consumer value based approach.  Plans are scored through the application of a proprietary mathematical model that takes into account the various key components of mobile plans such as plan allowances (minutes, data, SMS and MMS), data speeds and value added elements.  The end result is a score for each plan that allows it to be compared with other plans in that market, regardless of plan features.  The Tarifica Score also makes possible comparisons of plans across markets.

·     The Tarifica Score allows operators to evaluate their offerings in comparison to those from competitors – even prior to launch – and then make adjustments as necessary to improve scores

Tarifica has drawn on its years of industry knowledge and expertise, along with its many relationships with mobile operators and regulators, to develop the Tarifica Score.  We are confident this tool will deliver considerable value to operators in today’s intensely competitive mobile services market. 

 The Tarifica Score represents a potent method for promoting plans via the media and directly to consumers.  Companies can receive validation as an attractive plan from an independent third party and communicate value to customers in a simple, easy to understand manner.   It's a unique market planning tool - compare plans against competitors prior to launch and make adjustments  to improve scores.

If you are interested in learning more about the Tarifica Score, please contact Tarifica to schedule an online demo that will explain it in detail.  http://www.tarifica.com/contactus.aspx

Swedes Complaining of 4G Interference With TV

A report from the Swedish postal and telecom regulator PTS has stated that TV viewers have complained about interference from the country’s mobile networks running on the 800 MHz band, though it says that installing filters should resolve most such problems. In 2012 there were 150 complaints of interference from residents in areas of 4G network expansion; in 2013 there were 400. On average, mobile operators provided 60 filters per month during the second half of 2013. PTS said that in cases where it carried out measurements, no incidence constituted interference under the terms set out in operators’ permit conditions. While we cannot comment on the terms of the permit conditions of various Swedish MNOs, we do believe that customer complaints of interference of digital terrestrial television (DTT) by 4G signals, and it makes perfect sense that such complaints would increase significantly as 4G service expands. While the filters, which fit onto the aerial antennas of the TVs in question, may well solve the problem, and the mobile operators may be very able and willing to bear the cost of such gadgets if required by law to do so, the interesting point here is that in a world with a limited number of usable electromagnetic frequencies, 4G technology is likely to come into conflict with older technologies. To give another example, in Peru, 4G on the 900 MHz band was interfering with cordless phones to the extent that the country’s Ministry of Transport and Telecommunications was planning to replace the phones to clear that band.  In an increasingly 4G-connected world, with ever-increasing demand for the frequencies that best deliver the high-speed mobile connectivity, functionalities that used to be provided by such technologies as DTT and cordless phones will be provided by 4G via various mobile devices, ultimately obviating these clashes of frequency.  The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Etisalat to Sell West African Assets to Maroc Telecom

UAE-based MNO Etisalat has reported that it will sell its operations in West Africa to Moroccan MNO Maroc Telecom for a sum of US $650 million. The deal will include the sale of Atlantique Telecom, a wholly owned subsidiary of Etisalat with operations under the Moov brand in Benin, Central African Republic, Ivory Coast, Ghana, Niger and Togo. It also includes Ivory Coast-based Prestige Telecom, which provides IT services to Etisalat’s operations in all of these countries. The operator’s subsidiary in Nigeria will not be part of the transaction, which requires competition and regulatory approvals in the six West African countries. The deal has been contingent on Etisalat’s planned acquisition of Vivendi’s 53 percent stake in Maroc Telecom for €4.2 billion (US $5.7 billion), which was completed on 14 May 2014.

Vivendi, which is the parent company of French MNO SFR, has been in exclusive talks with Etisalat since July 2013 about the sale of its stake in Maroc Telecom after other bidders, including Qatar’s Ooredoo, dropped out. This sale is part of a larger move by Vivendi to focus on its more profitable media assets and has been viewed as a means to raise enough cash to write down its debts and sell SFR.

The deal has several positives for Etisalat. While the operator has a presence in 15 markets across the Middle East, Asia and Africa, its main source of revenue (at 66 percent of group revenues in Q1 2014) continues to be its home market. The UAE is a highly saturated market, which ranks highest in the world in terms of smartphone penetration (over 72 percent as of 2013). Competition is intensifying in the wake of the regulator’s elimination of the tariff approval requirement and introduction of mobile number portability in 2013. Saudi Arabia, the other Middle Eastern market in which Etisalat operates, has nearly as high a rate of mobile penetration and also will see the entry of three MVNOs. Therefore, diversification away from the Middle East makes sense.

However, some of Etisalat’s biggest international markets in terms of revenue generation, Egypt and Pakistan, have been affected by issues such as political instability and currency devaluation. Through the acquisition of Maroc Telecom, Etisalat not only gets an entry into Morocco with the leading market share of 47 percent (totaling 18.3 million subscribers), it also adds four other African countries (Burkina Faso, Gabon, Mali and Mauritania) to its portfolio and can leverage synergies that exist between operations in that region. Furthermore, placing its West African operations under the management of a successful regional operator may prove beneficial to Etisalat. 

However, it is worth noting that Maroc Telecom’s profitability in its home market has been hit by soft consumer spending and increasing competition. Bringing innovative offers to the market by leveraging the strengths of the two operators will be key to Etisalat’s future success with this acquisition.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Chinese Operators in Talks to Share Infrastructure

Responding to media rumors, China’s three largest telecommunications operators, China Mobile, China Unicom and China Telecom, have confirmed that they are in talks to set up a joint venture for the sharing of mobile infrastructure, with the approval of the Ministry of Industry and Information Technology. While the talks are still in the preliminary phase, the companies have indicated that the venture would be for the operation of existing base stations throughout the country as well as the construction of new ones, which the three operators would lease from the venture. The venture, likely to be known as the National Tower Company, will initially have up to US $1.6 billion of capital and will collect rent from the three operators. The idea of sharing network infrastructure makes a good deal of sense for China’s big three. Despite the rapid growth of the Chinese economy and the already huge numbers of customers these operators have, they are all facing challenges. Since the granting of 4G licenses by the Chinese government in December 2013, the operators have been facing the need for large capital expenditures to build out high-speed networks. China Mobile, the largest operator, reportedly plans to build 500,000 4G base stations by the end of 2014, while China Telecom intends to reach 250,000. In addition, all three providers are now operating in a more competitive environment, due to entrance into the marketplace of new entities. The government’s issuance of 19 MVNO licenses promises to shake up the Chinese mobile telecommunications landscape. In this context, the three traditional operators have a common interest in fostering better coverage and quality of service. Sharing the cost, will help all three—though it is likely China Telecom and China Unicom have more to gain here than China Mobile. While the plan should cut costs in the long run and accelerate the rollout of 4G, the initial investment will likely have a short term negative impact on profitability.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Mobile Chat Apps Favored Over Facebook Messaging

According to a recent report the use of mobile chat apps and micro-blogs has been increasing in Nigeria. More and more users are turning to Cape Town, South Africa-based 2go, a mobile instant messaging service, as well as to messaging services Eskimi and WhatsApp as their social media platform choices than to Facebook. Last year Alan Wolff, 2go’s co-founder, said that the service had over 20 million registered users across Kenya, Nigeria and South Africa, and that 2go sends over 7 billion messages each month. Additionally, the report chalked up the popularity of messaging apps to their ability to perform well on lower bandwidths, which results in less data usage and that they are a less expensive alternative to SMS.

Facebook has acknowledged that in some parts of the world its most important demographic—teenagers—are becoming less active users, “We did see a decrease in daily users, particularly among younger teens,” said Facebook’s chief financial officer, David Ebersman, when referring to usage numbers from Q2 to Q3 in 2013. In a 2013 survey of teenagers from 30 countries, the number of these users claiming to be active on Facebook fell from 76 percent in Q1 to 56 percent in Q3. Young users, always looking for something new, are willing to switch platforms frequently; however, we do not think this is the reason for the high use of messaging apps in Nigeria.

Nigeria’s population of just over 170 million has an internet penetration of 33 percent, and 72 percent of those connected to the internet visited social media sites last year. Nigerians are turning to social media as a way to attract the government’s attention and hold it accountable for its actions that impact the country. Branding of businesses, engagement in civic issues and sources of news information are also reasons for Nigerians use of social media platforms.

Nonetheless, only 25 percent of Nigeria’s more than 105 mobile phone users have smartphones, and using Facebook’s app is difficult in a country that has poor internet access and an inadequate supply of affordable electricity. Therefore, messaging apps are the social media platform of choice for feature phone users.

We have reported on Facebook partnering with mobile operators in several emerging countries, which is a way for the social media giant to increase its penetration in these nations. If operators can find ways to develop mobile networks and increase services in these developing countries, which will allow for larger amounts of data penetration, Facebook believes it will see an increase in active users.  Last November Nicola D’Elia, Facebook’s growth manager for Africa, said, “The network, unsurprisingly, is seeing the biggest uptake in the African markets with growing data penetration. There is a strong correlation between data penetration and Facebook penetration… Growth will come where we are able to deliver the highest data penetration and in sub-Saharan Africa it is definitely through mobile.”

 The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Spanish Consumers Unite to Lower Rates for Mobile Services

Spain’s Organization of Consumers and Users (OCU) has set in motion a collective purchasing initiative by encouraging consumers to unite in order to negotiate lower rates for mobile services. Consumers can sign up for the auction, to be held on 22 May, through a website set up for the purpose. Consumers will have to provide details of their usage of voice and data services, which will then be used to create 25 profiles for operators to bid on. The consumers will be grouped into two profiles—high-usage and low-usage—and the best average rates for the high and low profiles will be calculated to determine the winning operators. Following the auction, consumers will receive the winning offer that best suits their profile and will have the option to accept the offer or keep their existing plans. The contracts will be for one year, and consumers will have the option to terminate their contracts with no penalty before the year is over. The offers will only be for standard mobile services and will not include roaming, international or premium services. Fixed line services (voice or broadband) will not be included.

Spain, one of the largest mobile markets in Europe, has recently been experiencing massive changes in retail offerings due to the extensive impact of the economic recession. With one in four people unemployed in 2013, Spanish consumers in record numbers preferred to give up their mobile phones or switch to cheaper options offered by smaller players such as Yoigo and Simyo. These players made game-changing moves such as offering unlocked smartphones, while others such as MVNOs Ono and Jazztel introduced converged offers which made the most of customers’ desire to save. Prompted by the aggressive moves of their smaller rivals as well as pressure on their own margins, Movistar, Vodafone and Orange eliminated subsidies on handsets while introducing installment plans for new smartphones and buy-back options for old phones. Orange and Movistar even offer unlocked smartphones. Prices also declined; for example, the average monthly bill for mobile services in Q3 2013 was 10 percent lower than in Q3 2012. Despite these moves, according to a study, 19 percent of Spanish mobile subscribers claimed to be dissatisfied with their mobile service.

Spain, to a large extent, exemplifies the situation in Europe. Incumbents, who invested heavily in acquiring spectrum and rolling out 4G networks, have had their ambitions to charge more for 4G services frustrated due to offers of free 4G services from smaller rivals. Consumers’ reluctance to spend on mobile services has also led to measures to prevent bill shock, such as data caps and alerts, as well as the forthcoming elimination of roaming charges in the EU and in some cases the elimination of two-year contracts. Some of these moves have been initiated by regulators, others by operators.

The OCU’s move to hold an auction to source lower mobile tariffs can be understood in terms of this trend. The question is, how successful will it be? In 2013, the OCU held a similar process to procure lower electricity tariffs for retail consumers. It signed up nearly 500,000 consumers, but only got one energy company, a small player called Holaluz.com, to submit a bid. The auction finally led to savings of €49.00 (US $67.84) per year for the 28,000 consumers who chose to sign up for the winning bid. In the case of mobile services, the OCU hopes to attract 150,000 consumers (it had 48,893 signups at the time of writing). While larger players may be reluctant to participate, the auction may attract participation from the smaller MVNOs that can take advantage of the opportunity to sign up a large number of customers at relatively low cost. So while this auction may not be a game changer, it may be one more step toward an even more competitive market in Spain.


The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Orange Romania Offers New Orange TV Go Add-Ons

Romanian mobile operator Orange has started offering add-ons for customers who want to access the Orange TV Go service on their mobile devices. There are six options to choose from, and the monthly subscription fee varies between €4.00 (US $5.52) and €14.00 (US $19.35). The monthly data allowance included with each plan is either 1 GB or 3 GB, and customers will have access to as many as 75 channels, movies and shows, depending on which offer they subscribe to.

As we have been reporting, operators are constantly trying to create innovative offers that are attractive and affordable for users and open opportunities for additional revenue. These new offers from Orange Romania seem like a good way of expanding its roster of services that require mobile data usage. It appears that the data allowances included in the packages will not satisfy subscribers’ needs, and therefore they will likely purchase additional data to take full advantage of this option. By way of comparison, another operator that recently launched a mobile data bundle designed for specific usage is MTN Ghana. For GHS 5.00 (US $1.77) per month, users get up to 400 MB of mobile data, only for access to three social media platforms: Facebook, Twitter and WhatsApp. Mobile data plans with small amounts of included data that are created specifically for either entertainment or social media platforms very often force subscribers to purchase additional data, and therefore they can be excellent drivers of revenue for operators.

 

“By giving just a little bit of strongly desired content, whether entertainment such as mobile TV or music or access to popular social media platforms, operators can have an impact on their customers’ data usage habits. This specific marketing technique tends to make subscribers more dependent and increase the amount of time during which they want to stay connected to mobile data. As users become more data-hungry, they will likely purchase additional amounts.”

Edyta Krzton, Senior Analyst at Tarifica

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Maroc Telecom Launches Free Hotspot Service

Moroccan fixed and mobile operator Maroc Telecom has launched an internet-access solution called WifiPub that allows users to access the internet at various hot-spots located in public places such as hotels and restaurants. Connection is free, but users must watch an advertisement lasting about 10 seconds before the internet session can begin. The service also offers data-mining applications for advertisers, giving them the ability to locate users, determine purchasing profiles and obtain real-time reports on the whereabouts and number of visitors. 

With interactive ad revenues on the rise worldwide, funding internet access through ads makes a great deal of sense. In addition, public WiFi has a value-added aspect for advertisers, namely the data-mining capacity which allows them to more effectively target potential customers. Again, free access to data can be a very effective driver of internet-based commerce and a boon to both operators and their partners in terms of eventual revenue.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Amazon’s Smartphone Likely to Come with AT&T Sponsored Data

The high-end smartphone that internet giant Amazon plans to launch later this spring will likely come with sponsored LTE data from U.S. operator AT&T, according to reports. While few details have been released, the plan, which will be called Amazon Prime Data, would allow AT&T customers to stream Amazon’s content—TV, movies and music—over their Amazon smartphones, without it counting against their LTE data allotments. While Amazon’s upcoming smartphone is rumored to have many game-changing advanced features such as a 3-D effects and gesture-based interface options, the real draw for users may well be the free data for access to Amazon’s high-data-consumption branded entertainment offerings. Amazon has followed this strategy before: It has always offered free 3G data for its Kindle readers, and in 2012 it offered 250 MB of LTE data per month for the Kindle Fire HD device for an annual fee of $50. In short, the company realizes that access to data is what the its content business hinges on, and it is willing to do a deal with a major mobile operator to get it. Providing consumers with data opens the door for Amazon—and other similar internet-based entities—to charge consumers for the actual content. From the point of view of mobile operators, this development, if it actually goes through and proves successful, would constitute yet another piece of evidence that partnering with large entities like Amazon will be an increasingly attractive option for revenue generation. And considering that the FCC, a U.S. regulatory agency, is expected to soften its net neutrality restrictions in the new rules that will be announced on 15 May, the climate is likely favorable to the proliferation of special-access data arrangements between operators and content providers.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Powerful Insights into the Pricing Strategies of Mobile Operators

Competitor Intelligence Graphic 2013

Tarifica’s Competitor Intelligence Report is a comprehensive quarterly report that provides powerful and clear insights into the offerings and pricing strategies of mobile operators, serving as an invaluable guide to trends in operators plans, prices and offers. Tarifica can produce this report on more than 300 mobile operators it tracks worldwide.

The Competitor Intelligence Report tracks and graphs every consumer and business offer from a selected mobile operator, examining all of its plans by price, service features, device type and other metrics.  In addition to the numerical and graphical data, each report includes an Executive Summary containing Tarifica’s analysis of noteworthy trends and developments in the operator’s offerings.  These insights are combined with the data to provide a deeper understanding of the factors driving the numbers and the strategy/thinking of each operator.

Plans and prices are presented in local currency — so there is no need to perform any conversion.  Subscribers receive four quarterly reports.  Each report contains data from the previous four quarters, resulting in a trend analysis covering a total of seven quarters in an annual subscription.

Each subscription includes access to the Tarifica Analyst responsible for producing the report. This analyst is available to interpret the data and to answer any follow-up questions.  In addition, every report is accompanied by Tarifica’s current rate file for the operator, which provides in-depth details on each of its plans and can be used to dig deeper into the data for more analysis. 

Each Competitor Intelligence Report is an exhaustive study that covers the full scope and evolution of a mobile operator’s consumer and business offers, providing operators, regulators and other industry participants with actionable intelligence on the competition.

Each Competitor Intelligence Report answers critical questions about a mobile operator, including:

 Competitor Intelligence Graphic 2013

¨ How many plans of each type are offered (Consumer/Business, Prepaid/Postpaid, Device Included/No Device, No Data/Data Only, etc.) and how is this changing?

¨ How does the operator price all of its current plans and services and how have these evolved?

¨ What new services are being rolled out and how extensively?

¨ How many device-specific plans are being created/modified and for which devices (e.g., Smartphone, Tablet, USB Modem)?

¨ How is the operator designing data only plans? For instance:

− Data Allowance

− Connection Speeds

− Price per GB

¨ What types of bundles are being designed, how are they being priced, how has this changed and what is driving these changes?

¨ What types of plans are being emphasized/deemphasized?

To Contact Tarifica's Research Team:  http://www.tarifica.com/contactus.aspx

Telefónica Launches Mobile Ad Exchange

Spanish telecom giant Telefónica has partnered with the investment and advisory firm Blackstone GSO Capital Partners to launch Axonix, a mobile advertising exchange platform. Telefónica’s CEO of Digital Service and Innovation, Stephen Shurrock, said, “We’re proud to be the first telecoms company in the world to own and power a mobile ad exchange platform.” The platform will be powered by MobClix, a programmatic advertising platform, which was recently acquired by Blackstone. The new firm will operate independently of Telefónica and be based in London. The move will allow the operator to compete for the ever-growing mobile advertising sector, projected to grow 50 percent each year to reach US $45 billion per year by 2016. Telefónica has over 323 million mobile customers across 24 countries.

The creation of Axonix is Telefónica’s latest and most aggressive move to tap into more diverse revenue streams and avoid the fate of becoming a “dumb pipe.” In entering mobile ad sales, Telefónica is joining a crowded and competitive marketplace. The leading players, Google, Facebook and Twitter, are household names, with high levels of programming expertise and proven track records of innovation. The growth potential for mobile advertising is as clear to these actors as it is to Telefónica, and they will fight to keep their share.

As it tries to overcome these challenges, Telefónica has three significant advantages. First is its huge user base with verified demographic information. Unlike with PCs, where significant personal information is gathered through cookies, mobile ads tend to employ algorithms that use site visits and preferences to estimate demographic information. Simon Birkenhead, who has been chosen to run Axonix, said, “This is really going to be quite a leap forward for programmatic for mobile because currently mobile advertising suffers from a lack of good quality data for targeting. Yet programmatic media buying is totally reliant on data for it to work.” Second, due to its significant presence in Latin America, Telefónica’s operations pair well with the highest-growth areas for mobile advertising. Unlike North America and Europe, Latin America and Africa are poised to be filled with mobile-only internet users. Third, while Axonix’s platform will almost certainly be used initially for Telefónica’s subsidiaries (the company’s deal with mobile ad platform Amobee is up for renewal this year), it can leverage Telefónica’s relationships with other operators for growth. As a giant in the industry, Telefónica has relationships with virtually every major player, and we expect the team at Axonix to rely on these to help it push the platform as a mobile ad marketplace for other operators.

As we have written before, working to increasingly monetize subscribers’ demographic information without creating the perception of violation of customer privacy is an excellent way for operators to combat declining ARPU. It now appears that Telefónica is heavily invested in making this strategy work.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Smart Launches New LTE Plans and Tablets

Philippine operator Smart has launched two postpaid LTE plans. The LTE Plan 999 includes 3 GB of data per month, while LTE Plan 599 comes with 1.5 GB per month. These plans are available through a SIM-only subscription with no lock-in period. The operator has also launched the Huawei MediaPad 10 Link LTE tablet and the Asus Nexus 7 tablet for its LTE plans. Smart is living up to its name by offering these tablets in tandem with new plans, because LTE use and LTE adoption are driven by the presence of LTE devices. This strategy, which encourages customers to use more data by providing them with the technological means to do so, is very solid. If an operator is going to invest in high-speed networks, it should place compatible devices in the hands of as many subscribers as possible, to ensure the investment pays off in data-use revenues.  The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

AT&T and The Chernin Group to Invest $500 Million in OTT Video

U.S.-based telecommunications giant AT&T and The Chernin Group, which produces and invests in media and entertainment, have announced that they will enter into a partnership to jointly pursue opportunities in the video-on-demand and streaming content sectors. The companies stated that together they will invest $500 million to acquire and launch such OTT services, which will have both ad-based and subscription-based business models. Further specifics of the deal were not provided, nor was the launch date specified. AT&T chief strategy officer John Stankey said, “AT&T and The Chernin Group are combining our skill sets to address the growing consumer demand for accessing content how and when they want it. Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space.” Peter Chernin, chairman and CEO of The Chernin Group, said, “AT&T’s massive reach on those platforms across mobile and broadband and their commitment to the online video space make them the perfect fit for this venture with us.” The need to transcend the “dumb pipe” role applies to the fixed line sector as well as to the mobile. AT&T has been looking to gain traction in the video-content space for some time now; a previous attempt—also in partnership with TheChernin Group—to acquire Hulu last year failed when the video content provider’s parent companies chose to retain their shares in the business. This time, the two companies are evidently hoping that a large amount of ready money and a flexible attitude toward possible diverse acquisitions will enable them to make headway in the rapidly growing OTT video universe. To this endeavor, AT&T can bring its large footprint (16 million broadband subscribers in 22 states) and high-speed networks. Simultaneously with this new partnership, the operator also announced that it will expand its “last-mile” fiber-to-the-home (FTTH) network to 100 more U.S. municipalities in 2014, include 21 major metropolitan areas such as San Francisco, Chicago and Cleveland. FTTH is intended to provide the broadband speeds that are optimal for the delivery of VOD and streaming video. This joint venture could allow AT&T to compete with large cable companies by offering increasingly popular kinds of non-traditional video entertainment to content-hungry customers.

 The above item appeared in a recent issue of Tarificas' "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

U.S. Interactive Ad Revenues Reach All-Time High

According to a recent report, U.S. interactive advertising revenues in 2013 grew 17 percent over the previous year for an all-time high of US $42.8 billion, surpassing broadcast television advertising (US $40.1 billion) for the first time. Mobile advertising revenues achieved triple-digit growth (more than 110 percent) year-over-year to reach US $7.1 billion. Mobile accounted for 17 percent of 2013 revenues, compared to 9 percent in 2012. Retail advertisers continue to represent the largest category of internet ad spending, responsible for 21 percent in 2013, followed by financial services and closely trailed by automotive which account for 13 and 12 percent of the year's revenues respectively.

That mobile ad revenues more than doubled in just one year is, we think, an astonishing statistic. At US $7.1 billion, the sheer size of the mobile piece of the U.S. interactive advertising pie stands as a challenge to any entity in the mobile space to pick up a piece of it, and the pie is anything but shrinking, so there should be opportunity for all. Much of the revenue now goes to internet search-based entities such as Google, as well as to the developers of the apps that feature ads. But considering the current amount of demand for mobile advertising and its rate of growth in the U.S. and doubtless in other, similarly developed markets, mobile operators should be working hard to find out how to take a piece of this business.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Action on Data Privacy

The European Court of Justice has declared the EU Data Protection Directive invalid. The directive requires communication providers to retain metadata on all calls and internet use for up to two years, in case they are needed for law enforcement purposes. The court found that the collection and access to such data is a “particularly serious” interference with the fundamental right to a private life and protection of personal data. The court also found that the directive did not sufficiently protect against possible abuse or unlawful access to information, that its parameters were too vague, and that it did not require the collected data to be stored in the EU.

Separately, in the U.S., the director of the Federal Trade Commission’s Bureau of Consumer Protection, Jessica Rich, notified Facebook and WhatsApp about their obligations to protect users’ privacy in light of Facebook’s announced acquisition of WhatsApp. In a letter, Rich told WhatsApp and Facebook that both companies must keep the promises they have previously made with regard to customer privacy, and that if they do not, they will be in violation of U.S. law. Furthermore, before making any material changes to how they use data already collected from WhatsApp subscribers, the companies must get affirmative consent. The letter also states that the companies must not misrepresent the extent to which they maintain the privacy or security of user data, and it recommends that consumers be given the opportunity to opt out of any future changes in the ways newly-collected data is used.

While these two actions are quite different, they are both governmental responses to rising concern among consumers over privacy and data protection. One of those concerns, especially since the Edward Snowden revelations, is over the degree to which law enforcement authorities should have access to personal information transmitted via voice calls and internet use. The EU’s change in policy, which had been under discussion since an initial opinion in December 2013, by curtailing metadata collection affirms that public security does not in and of itself justify a large-scale invasion of privacy, and that the risk of abuse outweighs the benefits of collecting such information.

In the case of the U.S., the regulatory body is clearly concerned that Facebook’s more liberal attitude toward data sharing—a natural outgrowth of its advertising-driven business model—will affect WhatsApp, which up to this point has had a rigorous privacy policy. Facebook has stated that it will not release any consumer information stored in its databases to third parties without the user’s permission, but the social network has changed its privacy policy in the past, sometimes without making consumers sufficiently aware of it.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Snail Games Launches Prepaid Service

Chinese game developer Snail Games has launched a prepaid MVNO called Snail SIM. It is being offered at CNY 399 (US $64) for unlimited voice calls across the country for six months and 3 GB of data, according to reports. In December 2013, China approved its first MVNO licenses, for 11 companies. Snail Games is the first of the 11 to launch services. The Chinese mobile market has been getting more competitive for a while now, and the opening to MVNOs should make it even more so.

For a gaming company to enter this space makes a good deal of synergistic sense—gamers are already actively engaged with their mobile devices, so there is a pre-existing customer base for mobile network services. And by selling the data needed to run the games, Snail Games would make money on both ends, proving itself to be anything but slow on the uptake.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx