Europe's mobile operators are retailers, not software developers - Mobile World Live

Europe’s mobile operators are retailers, not software developers

20 SEP 2010

It looks like Europe’s biggest mobile operators are again thinking about how they can gain a strategic foothold in the mobile device market. French newspaper Le Figaro reports that Stephane Richard, CEO of France Telecom-Orange, has invited the heads of Deutsche Telekom, Telefonica and Vodafone to discuss the possible creation of a common software platform for mobile devices.

It is not clear what has prompted Richard to act now or why this effort should be any more successful than other operator-backed efforts in this area, such as the investments by some European operators in handset operating system developer SavaJe and their support for the not-for-profit LiMo Foundation’s efforts to develop an open operating system for smartphones. The Le Figaro report says Richard believes Apple’s iOS and Google’s Android operating systems have become a “Trojan horse” for these companies to establish their own relationships with mobile customers, but that is hardly a new revelation.

Presumably, Richard is looking for a more far-reaching platform than that being developed by the Wholesale Applications Community (WAC), which is championing the technical enablers needed to allow widgets and web applications to run across many different devices and different operating systems.

But if Europe’s largest mobile operators wanted to go deeper and create their own operating system or distinctive device platform, they need to ask themselves this question: Have they got or can they get access to the software expertise needed to compete with the legions of coders at Apple and Google? What makes them think they can be successful where Microsoft, the world’s largest and most profitable software company, has mostly failed? Europe’s mobile operators have yet to show that they have the coding skills and the usability expertise necessary to challenge Google’s and Apple’s suites of software and services. To date, their track record in this area has been patchy at best. For example, Vodafone 360, Vodafone’s latest software and web services play, has come under fire for technical glitches and usability issues.

The PC still rules, okay?

Another fundamental problem for European (and North American) mobile operators is that the PC is still the lead Internet access device for most of their customers and they have relatively little influence in the PC-led Internet, where Google, Apple and, now Facebook, have an iron grip. In the GSMA’s list of the top ten most visited sites by UK mobile phone users, published in February, Google and Facebook occupied the top two slots. In other words, in Europe and North America, the big guns on the PC-based Internet are still calling the online tune and the mobile industry has to dance to that tune.

Still, there should be scope for mobile operators to play a much greater role in the device ecosystem in Asia, Latin America and Africa. In less affluent countries, the mobile handset is the only Internet device most people have and iTunes has little traction. Having already customised Android to create its own distinctive handset software and roll-out its own app store, China Mobile is now reported to be preparing to launch its own search engine to compete with the dominant search provider in China – Baidu. With 556 million customers and its own suite of well-established mobile data services, ranging from Fetion instant messaging to Wireless Music to Mobile Video, China Mobile appears to have the heft to compete with the biggest guns from the PC-based Internet. Similarly, the success of Safaricom’s M-Pesa platform means the Kenyan mobile operator is well-placed to become a leading light in the development of the Internet in East Africa.

Back in Europe and North America, mobile operators should probably focus on supporting the work of the WAC, while ensuring the developer ecosystem can tap the operator assets that the web players can’t easily replicate. These assets include their billing systems and their customer services operations, particularly their retail chains. By mixing their online and offline assets in a smart way, mobile operators could offer the mass-market a more compelling app retailing experience than most of the web players. In essence, mobile operators need to think like retailers, not software developers.

 

David Pringle

This article was first published on the GSMA’s Mobile World Live portal. David moderates discussion forums on the site and is a freelance media and investor relations consultant.

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members

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