Tag Archives: Telcos

Wikipedia Founder Jimmy Wales Talks Ethical Telcos

Jimmy WalesJimmy Wales is a man that hardly needs an introduction.

As co-founder – and self-titled ‘constitutional monarch’ – of Wikipedia, the fifth-largest website on the internet and by far the most visited not-for-profit, Wales is assured his place in history alongside the likes of Gates and Zuckerberg.

But, unlike many of his peers, Wales’ less commercial focus means he’s not a billionaire, although he does count former prime minister Tony Blair among his friends.

In January, Wales became the director of The People’s Operator, an MVNO that donates 10 per cent of each person’s bill directly to a charity of their choice, with a further 25 per cent of the company’s overall profit going to its charitable foundation. The business runs on EE’s network in the UK and although many are concerned about the future of the telco industry, Wales is very excited about his new role.

“People often pitch me things that are somehow worthy or noble in their objectives but don’t have a practical way to achieve them,” he told Mobile Marketing. “Others just pitch on things with safe business goals. I got excited because The People’s Operator seemed to be both – and it has the potential to raise a huge amount of money for good causes.”

Asked about the threat to telcos from the growth of OTT providers, for example, Wales simply said the MVNO model ‘looks good to me’. “It’s a long-standing, stable business model. Obviously it will always have internal quirks, like the fact that you’ve got to work with mobile operators, but it’s a great business. The telcos seem very interested and very excited to work with us – so far, so good.”

Global movement

The for-profit operation based in Tech City is online-only and keeps costs down by spending little on offices and marketing, enabling it to commit to making charitable donations. So where is it planning to find its customers? “We’re going to be a global business so we have to be in as many places as possible,” Wales said.

“Our concentration is online, viral marketing and word of mouth, which won’t really work if we happen not to be in country and someone wants to sign up. We want to give people as many opportunities to participate as possible. First off, the US is obviously a big target and then Europe generally.”

Wales explains that around 2m users donate to Wikipedia every year. But with around 540m visitors every month, that means just 0.03 per cent of those people put their hand in their pocket. So is he really convinced that customers will vote with their cash for a more ethical operator?

Tech for good

“The People’s Operator is part of a much broader trend. Customers are really interested in being involved with companies that care where their money is going. The basic pitch is: go with another operator who will spend a big chunk of money on TV ads and billboards – or go with us. In return, we want you to get the word out and get your friends signed up. Wikipedia had its most successful fundraiser ever this year,” he adds.

Wales’ wife used to work for Tony Blair, with the former PM a guest at his wedding, and the Labour Party is mentioned as a ‘good cause’ currently being supported by TPO’s Foundation. Does this mean TPO is a partisan operation? “There are already hundreds of charitable partners and causes that people can support. We’re not specifically tied to any particular view of the world,” he explained.

So is Wales determind to change the entire mobile industry, one that is fraught with everything from privacy breach allegations to objectionable hardware production practices. “We’re definitely going to do our best but as an MVNO we don’t have direct control over lots of things, like supply chains for phones. I’m very interested in some of the things going on right now – like people trying to put together ethical hardware – but realistically there’s not much we can do about that. It’s definitely something we will try and support.”

Self-organise online

Like his work with Wikipedia, which champions free access to online information, The People’s Operator project looks to be another business where technology and politics can meet. Does Wales see it that way? “This is certainly something we’re seeing – an increasing intersection of tech and politics – in lots of different ways that are both good and bad, and this will continue to be the case.

“One of main things that interests me is the ability of people to get together online and self-organise in ways that weren’t possible 50 to 60 years ago. In society, we’re just at the beginning of understanding what that really means.”

Although Wikipedia isn’t for-profit, the smartphone revolution is having a massive impact here. “We’ve seen a dramatic increase in the mobile portion of traffic. Wikipedia and mobile is a perfect match: you wonder about something – perhaps you’ve got a bet with a friend – and you look right there on the spot. Mobile is really good for Wikipedia in the long run.”

Written for Mobile Marketing and first published here: http://mobilemarketingmagazine.com/wikipedia-founder-jimmy-wales-talks-ethical-telcos/#BqyEqXDsqFxQrdQB.99

Smart Pipes or Dumb Monsters: What Can Telcos Do About Death of SMS?

Teen TextingOTT messaging exceeded the number of text messages sent in the UK last year by more than 15bn.

According to Deloitte estimates, the number of instant messages sent in the UK reached 160bn in 2013, growing from 57m in 2012. Meanwhile, the number of text messages sent dropped from 152bn in 2012 to 145bn in 2013.

This represents the first time that the number of texts sent has dropped. In 2014, the company believes that more than 300bn IMs will be sent, compared to just 140bn SMS.

But, in spite of the impressive growth of OTT messaging, with a growing range of global contenders, SMS still represents a huge share of revenue. In 2014, it will generate revenues of £60bn, equivalent to 50 times IM revenue. And Deloitte says it expects text messaging to continue to generate significantly greater revenues until 2018.

Scott McKenzie, director of Coleago Consulting, which advises the telco industry said he is surprised that SMS revenues aren’t going to fall faster than this. He now believes that the market has to aggressively go after mobile data if it wants to survive, to embrace that they’re going to be a ‘smart pipe’.

“The telcos are just becoming broadband internet companies,” he said. “SMS has been a highly lucrative area for them with a high margin, so they’re going to have to figure out how to profitably deliver mobile broadband to everybody. If they don’t cannibalise their own revenue, someone else will do it for them.”

But Jose Romero, VP product strategy and marketing at Movius, which sells new services to the carriers, believes that if this happens, telcos are restricting the kinds of services they can charge for and are likely to succeeded by smaller, cheaper mobile internet providers. He says they have to innovate.

“Some of these companies are in desperate situation where their business is starting to tank and if they don’t do something now – they will lose their business – specifically in developed markets,” he said. “They are hurting really, really bad from the loss of SMS revenue but they are quickly becoming an internet pipe that doesn’t generate much money.”

He says the large telcos need to speed up decision-making, stop doing ‘me too’ innovation and not be afraid to be first to market. “Carriers can actually compete in the area that they are very strong at – innovative voice services with high reliability – there is still a lot more money to be made from existing voice infrastructure so why don’t they do that?” he said.

Options that telcos are already exploring include offering different user profiles for ‘work’ and ‘home’ phone use on a single handset, and creating better roaming offers so people aren’t afraid to use talk minutes abroad. But Romero also highlights that Google now offers its users the opportunity to choose their default messaging client when they buy a new phone – picking either their carrier or an OTT provider – and this could easily be offered for voice too.

“If the carriers don’t innovate in the next two to three years, the OTT players will take over,” he said. “These companies can even go into other areas that they’re not comfortable with – they’ve got to look for new ways to become relevant or they will lose market share.” He points to AT&T’s presence at CES, tackling areas as broad as connected cars and healthcare.

But both men agree that telcos shouldn’t try and beat OTT providers at messaging. “Their experience of delivery of apps is pretty woeful,” said McKenzie, ” and there are millions of great apps out there already. But these messaging apps don’t actually generate a massive amount of revenue. And apps can change, WhatsApp could be replaced by something tomorrow.”

Both hightlight the failure of telco JV Joyne, a rich messaging app aimed at taking out the OTT market. “The project was five years late because they couldn’t agree on standard and took forever to get the thing off ground,” McKenzie said.

Understanding consumer behaviour to assess individuals’ needs, as well as offering good value packages and different levels of service for different types of customer, is key, he says. “It’s in their interests to have efficient customer service, which lower costs and reduce churn rates. The mobile market is going to get a lot more competitive in the UK.” Some companies are already adjusting pricing to make OTT less attractive, he highlighted, while T-Mobile in the US hosted an ‘uncarrier’ event at CES last week in a bid to differentiate itself.

McKenzie believes that in-market consolidation ‘makes a lot of sense’ and it has already been done across the world. But competition authorities are increasingly wary of the negative effect this may have on consumers. Private equity firms, outside operators and investors from Asia were also identified as potential entrants into the UK telco market.

But Romero doesn’t like consolidation, saying this could perpetuate the problems telcos already have. “It is something that is going to happen very quickly here. But it’s just going to create these monster operators and again – if they don’t innovate – they just become a pipe.”

Written for Mobile Marketing Magazine and first published here: http://mobilemarketingmagazine.com/smart-pipes-or-dumb-monsters-what-can-telcos-do-about-death-of-sms/#TjDpe7OzL841uqVX.99