While it’s difficult to gauge how much competition the new structural changes will bring to the market, what’s certain is that operators will have to innovate much more than in the past to try and increase the amount their subscribers use their mobiles while travelling in the EU, and also to ensure they don’t churn to rivals for roaming services.

The problem for operators is not that they haven’t innovated at all on roaming tariffs, it’s that they haven’t innovated enough. There have been relatively bold moves by operators to both reduce the amount they charge for roaming services and to innovate on how they price them. Each of the major pan-European operators have reduced some of their roaming prices below the regulated rates in recent years, and some, such as Orange, have introduced innovative applications that allow users to monitor their usage while abroad – a move designed to increase transparency on roaming behaviour to encourage greater use. Most recently (a day after the European Parliament vote), Telefonica announced that all its European subscribers will be able to use 25MB of data while roaming in the EU for as little as €2 a day – significantly less than the new initial €0.70/ MB regulated price.

What’s now clear is that operators need to be more bold and creative in the way they approach roaming. They need to build on the steps they have already taken and price services more compellingly and in new user-friendly ways to stimulate usage to offset reductions in prices. While hard facts on the elasticity of roaming are sketchy and to a degree inconsistent, there is nonetheless sufficient evidence to suggest that reducing prices in the right ways and effectively communicating these reductions does lead to an increase in roaming usage.

It’s sometimes the case that operators’ roaming departments innovate on pricing and tariff structures but organisational impediments prevent these innovations from being put into practice. Where this is the case operators need to remove these barriers to allow innovation on roaming tariffs to take effect – for the simple reason that revenues are now more than ever at stake.

Operators now face a choice – either price roaming services at or just below the new regulated rates, or, like Telefonica today, take bold steps to align their pricing with consumers’ expectations. Operators have for too long held on to the view that roaming is a premium service and so should be priced accordingly. They have lost this battle. New roaming service providers will come to the market as a result of the structural changes – and they will price services significantly below the new regulated ceiling and in new user-friendly ways. It’s time for operators to move forward with compelling and innovative roaming tariffs and applications – before rivals seize their opportunity and do it for them.

Orange is partnering with water services specialist Veolia Water

Orange’s new roaming tariffs, launched at the Mobile Wold Congress in Barcelona today, are a good example of the type of new approach operators need to take to stimulate use of mobile services while abroad. They succeed in meeting the main requirement mobile users have when they travel abroad: will it cost an unjustifiably high amount to use my mobile services when I travel? Operators have yet to arrive at a conclusive approach to allow consumers to answer this question, but they are beginning to experiment with different approaches that should point the way to a solution.

Orange’s new tariff is innovative in that it offers roamers a bundle of mobile services for a set fee. For example, Orange France customers will be able to purchase a roaming bundle that includes 10 minutes of voice, 10 SMS’s and 10 MB for approximately €4-€5 on a daily basis when travelling in the EU. This will be available from June onwards.

While it remains to be seen how popular this bundled approach will be with customers, it is a step in the right direction for operators trying to stimulate roaming usage beyond the old price-per-minute/ SMS/ MB approach. Experimenting with different pricing structures will help operators see what works and what doesn’t, giving them much-needed insight into the link between price and use of mobile services while abroad. While pay-per-use tariffs work in-market, they haven’t succeeded in stimulating use of mobile services while abroad to levels comparable to home use, at least in the consumer market.

Meanwhile, Orange’s “Orange Travel App”, which was launched in France in June and will be expanded to other countries during the year, is an effective way for roamers to stay aware of how much they have used their mobile while travelling. Through awareness of mobile use roamers are likely to use mobile services more rather than less – as long as they know how much it is costing them. Other operators, especially the large multi-nationals can be expected to launch their own roaming apps as the year progresses.

The majority of pan-European operators are now innovating on roaming pricing to try and increase usage to offset regulatory-led wholesale and retail price cuts. The link between price decreases and increased roaming usage is difficult to quantify, not least because of the effect of the economic downturn on travel. But Orange’s bundled approach, combined with the Orange Travel App provide a solid foundation for Orange customers to use mobile services more often when they travel.

LTE is now the fastest growing mobile network technology ever

Orange’s new roaming tariffs, launched at the Mobile Wold Congress in Barcelona today, are a good example of the type of new approach operators need to take to stimulate use of mobile services while abroad. They succeed in meeting the main requirement mobile users have when they travel abroad: will it cost an unjustifiably high amount to use my mobile services when I travel? Operators have yet to arrive at a conclusive approach to allow consumers to answer this question, but they are beginning to experiment with different approaches that should point the way to a solution.

Orange’s new tariff is innovative in that it offers roamers a bundle of mobile services for a set fee. For example, Orange France customers will be able to purchase a roaming bundle that includes 10 minutes of voice, 10 SMS’s and 10 MB for approximately €4-€5 on a daily basis when travelling in the EU. This will be available from June onwards.

While it remains to be seen how popular this bundled approach will be with customers, it is a step in the right direction for operators trying to stimulate roaming usage beyond the old price-per-minute/ SMS/ MB approach. Experimenting with different pricing structures will help operators see what works and what doesn’t, giving them much-needed insight into the link between price and use of mobile services while abroad. While pay-per-use tariffs work in-market, they haven’t succeeded in stimulating use of mobile services while abroad to levels comparable to home use, at least in the consumer market.

Meanwhile, Orange’s “Orange Travel App”, which was launched in France in June and will be expanded to other countries during the year, is an effective way for roamers to stay aware of how much they have used their mobile while travelling. Through awareness of mobile use roamers are likely to use mobile services more rather than less – as long as they know how much it is costing them. Other operators, especially the large multi-nationals can be expected to launch their own roaming apps as the year progresses.

The majority of pan-European operators are now innovating on roaming pricing to try and increase usage to offset regulatory-led wholesale and retail price cuts. The link between price decreases and increased roaming usage is difficult to quantify, not least because of the effect of the economic downturn on travel. But Orange’s bundled approach, combined with the Orange Travel App provide a solid foundation for Orange customers to use mobile services more often when they travel.

Facebook and mobile operators became best friends at the Mobile World Congress

Facebook and mobile operators became best friends at the Mobile World Congress today, as the social network giant pledged to help do away with fragmented mobile browser standards and to help operators bill for purchases made through internet applications. The move places Facebook at the heart of the mobile community, with the Internet giant acting as a champion for a mobile internet that works better for mobile operators and their customers, and one that operators can monetise more effectively than they do at present. A key challenge for Facebook will be whether it can succeed where operators have so far largely failed, and work successfully with the many different companies in the mobile industry who often have competing technology and business strategies to achieve its ambitious goals.

Facebook CTO Bret Taylor said in his keynote that the company will use industry body the W3C Mobile Web Platform Core Community Group , comprising over 30 major vendors, developers and operators, to try and make it easier for developers to create applications that work across different mobile browsers. On operator billing, Facebook said that it is working with operators including AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI, and Softbank, to reduce the number of steps needed to complete a transaction in mobile web apps.

Operators will be hoping that combined these two initiatives will help developers create popular applications that can work across numerous devices that they can bill customers directly for, thereby taking a cut of the price paid for the application or service.
On an important level, Facebook’s announcements today are as much about the balance of power between mobile and Internet companies as they are about how Facebook can help the mobile industry solve the problem of application stores generating lots of traffic, but little in direct incremental revenue. Mobile operators will hope that working with Facebook could help mobile operators create a new eco-system that over time dilutes some of the power held within the industry by the current market-leaders in the application store space: Apple and Google.

By allowing consumers to negotiate a separate roaming contract to use mobile services while abroad in the EU from the one they have for mobile services at home – while keeping the same number – the EC has freed consumers to seek the best available deal in the market.

And by granting this freedom from their home network operators the EC will, if the proposals become law, create a whole new market for operators offering EU-only service packages, thereby injecting a whole new impetus of competition in the area of roaming. By effectively broadening the market for mobile services in Europe from one country to all 27 the EC has made Europe a much more attractive market for new types of companies to sell mobile services accessible when visiting any member state.

The steps announced today are the logical culmination of the EC’s long held goal of narrowing the gap between how much it costs to use mobile services at home and while travelling the European Union. As such, they should come as no surprise to the European mobile industry, which, despite some exceptions, have been unwilling to reduce EU roaming rates in line with the Commission’s expectations.

Impact:

The impact of these proposals, if they are put into effect, will be felt most by the large European mobile operators. This is because they generate more revenue from roaming than smaller operators as they have more contracts with large corporations to provide mobile services for employees travelling in the EU.

European operators have been reluctant to stimulate the market for consumer roaming in the EU largely to protect the rates they charge their corporate customers, which, unlike the consumer, are much less price sensitive as they have a much greater need to stay connected when they travel abroad.

With the new proposals to allow consumers to negotiate a separate contract from the one with their home operator European operators will be forced not just to offer roaming rates at or slightly below the new regulated retail prices, but to compete in the new market for EU roaming services that the EC wants to create. As such, European operators’ roaming revenues will come under increasing pressure.

Outlook:

It remains to be seen how much more the regular consumer will use his or her mobile when they travel in the EU. The mobile industry remains unclear about how price elastic mobile roaming services are and still doesn’t have a clear view on how much additional usage is created when lower prices are in place. This is because the vast majority of European operators have resisted lowering their roaming rates with significant reductions until 2009-2010, and which is the very reason for the heavy regulation from the EC.

The coming years will provide a much clearer view on how much increased usage the lower prices bring about. The burden is now on mobile operators to aggressively market competitively priced roaming services to try and sign up the highest number of mobile users who use their mobile the most while travelling in the EU.

Put simply, a CDMA iPhone would be the best thing that could happen to Verizon Wireless. The operator has suffered through not being able to offer the iPhone, especially among its most valuable subscribers who have either left to join AT&T or grumbled at not being able to own the most sought-after consumer electronics device around.

At the same time, AT&T has benefitted in so many ways from being the sole supplier of the iPhone, evidenced not least in its strong churn figures. Despite not having the best network, AT&T has the lowest customer churn among US operators, at 1.30% at end-March, according to Informa Telecoms & Media.

So, Verizon Wireless would be able to stem the flow of high-end subscribers to AT&T and it could gradually get back the ones it’s already lost by being able to offer the iPhone.

And what would Apple gain from offering a CDMA iPhone?

Manufacturing a 3G CDMA iPhone would not only allow Verizon’s 92.8 million subscriptions to buy the device without changing network operator: globally, there are around 120 CDMA operators, with 466 million CDMA subscriptions between them. This means that subscribers to these CDMA operators would be able to buy the iPhone without changing operator.

But the picture isn’t as simple as that. The global market for a CDMA iPhone is not as healthy as the top-line figures suggest. The majority of CDMA operators are in emerging markets where demand for the iPhone is already being met by the WCDMA version.

How many CDMA subscribers in say, Venezuela, aren’t buying an iPhone just because it’s not CDMA?  I’d say, very few: the vast majority of global CDMA subscribers just don’t want, or can’t afford, an iPhone. Verizon Wireless is in a unique position in the US, because the perception that its network is much better than rivals doesn’t arise in other markets, where network quality is less differentiated from operator to operator.

And on top of this, many of the top ten CDMA operators, which between them account for 77.5% of total CDMA subscriptions, are looking at next generation network futures that don’t include CDMA.

CDMA iPhone complexities

Commentators who write about the supposedly imminent CDMA iPhone, and Verizon customers who will it into existence, overlook the complexities involved for Apple in manufacturing a CDMA iPhone.

Apple would essentially need to redesign the current iPhone to incorporate CDMA technology. It would need a separate new team to do this. A CDMA iPhone would require dedicated supply and production lines. Apple would need to strike a completely new set of agreements for CDMA intellectual property, and with a new set of rights holders. It would also require new solutions to enable certain iPhone features, such as Visual Voicemail.

The bottom line is that a CDMA iPhone would have a higher bill of materials than the WCDMA version, meaning that CDMA iPhone margins would be much lower. And unlike with the WCDMA version, margins wouldn’t significantly improve down the line because CDMA operators, especially in developed markets, are turning their backs on the technology in favour of LTE, or in some cases, WiMAX.

The approach required to launch a CDMA iPhone would go against Apple’s phenomenally successful strategy of producing high-margin, high volume products that differentiate on design, software, usability and the unique application of existing technology.

Some forecasters have estimated that a CDMA iPhone would bring in an extra US$7 billion in revenues for Apple, based in part on Verizon signing up eight-nine million iPhone subscribers a year. This forecast rests on the assumption that there are eight-nine million potential Verizon iPhone customers not churning to AT&T because of allegiance to Verizon. That seems like a very high number to me.

I think that the only way Apple would produce a CDMA iPhone would be if Verizon invested heavily in the manufacture of it, assuming much of the financial responsibility for developing and setting up production of it. This could make sense for Apple because it would be able to leverage Verizon’s help to roll the CDMA iPhone out in other markets. Although I argue that pent-up demand for a CDMA iPhone outside the US is small, globally, a CDMA iPhone could provide a boost to global iPhone sales.

But this potential upside doesn’t take into account the potential downsides for Apple. A CDMA iPhone would massively increase Apple’s exposure to potential product failings and shortcomings. Even for the high volume WCDMA iPhone these have been more frequent than Apple would like, although as yet they have done nothing to blunt consumer appetite for it.

Perhaps a CDMA iPhone isn’t in the cards, and the iPhone Verizon is rumored to begin selling in January is the LTE version. This makes sense, but not in the near term. It’s highly unlikely Apple would make an LTE iPhone until LTE networks are mass-market and other handset manufacturers have ironed-out the inevitable problems the technology will have. Remember, Apple didn’t launch a 3G version of the iPhone until mid-2008, long after the first 3G networks were launched. Apple will surely wait for others to make the first expensive mistakes with LTE.

All this means that Verizon could have to wait until 2012-2013 to offer an LTE version of the iPhone.

But Apple is used to breaking new ground, including its own, and is perfectly capable of making a CDMA iPhone if it considers that it makes enough business sense to do so. The CDMA iPhone depends on Verizon’s ability to persuade Apple to do just that – break new ground and enter into an extremely close partnership that goes far beyond being just a buyer of Apple products.

If Verizon fails to do this, and convince Apple it will be a better close partner than accident prone AT&T, it will have to continue suffering when the latter’s iPhone exclusivity ends, and more US operators start selling the device – but still not it.

Flash Player 10.1 is supported on devices based on Android, BlackBerry, webOS, future versions of Windows Phone, LiMo, MeeGo and Symbian OS

US software vendor Adobe has released the latest version of its mobile platform, Flash Player 10.1, in a move that draws clear battle-lines between different approaches to creating and selling smartphone content.

Apple has prevented Adobe software from running on its iOS platform, which powers iPhones, iPads and iPod Touch devices, and Adobe will be hoping that momentum gathers behind its latest Flash release to undermine Apple’s walled-garden approach to content and also its favor among developers.

Flash is popular among developers, but Apple says the software slows down its operating systems and is a drain on battery life. Because Apple doesn’t support Flash, any website that features Flash content can’t be accessed on iOS-based devices.

Flash Player 10.1 will be available as a final production release for smart phones and tablets once users are able to upgrade to Android 2.2 “Froyo.” Flash Player 10.1 was also released to mobile platform partners to be supported on devices based on Android, BlackBerry, webOS, future versions of Windows Phone, LiMo, MeeGo and Symbian OS, and is expected to be made available via over-the-air downloads and to be pre-installed on smart phones, tablets and other devices in the coming months.

Adobe will be hoping that support for Flash 10.1 will be strong enough to undermine Apple’s dominance in the smartphone application space.

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The catalyst is new license awards, which are set to radically change the competitive dynamics in some markets, and for different reasons than they did in the past.

Whereas 3G-spectrum auctions changed the competitive landscape by bringing in new entrants and thus expanding the number of players, 4G-spectrum auctions are likely to see a contraction in the number of networks built, and in some instances the number of operators, especially in developed markets.

And in markets that don’t see a decrease in the number of players, many will see fewer 4G networks built as a result of close cooperation between operators.

In the US, for example, T-Mobile is talking to cable companies and WiMAX provider Clearwire about a possible joint venture to enhance its spectrum position. T-Mobile USA is the smallest of the large nationwide US operators – it controlled just 11.63 per cent of the market at end-2009, according to Informa Telecoms & Media research – and lacks the scale of its big rivals.

Unlike bigger rivals AT&T and Verizon, T-Mobile USA does not have 700MHz licenses for building an LTE network, and it is not counting on the FCC’s national broadband plan to fulfill its spectrum needs.

Germany offers a similar story of small players banding together to offer 4G to better compete with large rivals. Many expect that the country’s two small players, Telefonica-owned O2 and KPN-owned E-Plus, will either merge or combine their network assets into a joint venture because they don’t have the resources to build their own LTE networks.

But whether or not they merge, the market won’t see any new entrants come into play. T-Mobile, Vodafone, O2 and E-Plus are the only four applicants in the country’s forthcoming auction of licenses in the 800MHz, 1800MHz, 2000MHz and 2600MHz bands.

Other crowded markets where small players battle against much larger rivals are also almost certain to see consolidation around spectrum awards for LTE. The UK is one of these markets, where 3G new entrant 3 is likely to be acquired by Vodafone or, less likely, Telefonica.

In countries where LTE spectrum has already been awarded, there has been scant interest from new entrants, and governments have reaped meager amounts from awarding new licenses. Finland saw no new entrants after it awarded LTE licenses; Norway (Craig Wireless) and Sweden (Intel) saw one each.

And pointing the way forward for operators in other countries, Telenor and Tele2 have struck a deal to construct a joint LTE network in Sweden, with plans to launch services based on the technology toward the end of 2010.

Although it makes sense financially for operators to combine their efforts to roll out LTE networks, from a competitive standpoint sharing core networks remains an untested proposition. It remains unclear how much differentiation operators can pursue at the service level when they have little room for differentiation at the network level. Moreover, no matter the level of cooperation, network-sharing agreements are notoriously complex and could foreclose on future strategic options, such as M&A. It also remains unclear what effect having fewer competitors offering services will have on the price end-users pay for mobile services.

Regardless of the potentially negative consequences of having fewer LTE networks being built, smaller players in highly competitive markets will be swallowed up by stronger rivals because they are unable to bid on their own for new spectrum. This promises to create an entirely new dynamic in markets where consolidation around LTE spectrum awards takes place.

Before expanding on this claim, let’s look at what the operators said in a little detail.

Both Telefonica CEO Cesar Alierta and Vodafone CEO Vittorio Colao – earlier this month and at Mobile World Congress in Barcelona, respectively – have said that they are thinking about charging Google and other search engines to use their networks.

Alierta implied that it was unfair that search engines were using mobile bandwidth for free while Telefonica’s operations provided the network, product sales, customer care, installation and maintenance for them.

Alierta said that he was sure this situation would change and that search-engine companies would need to start paying for some of the infrastructure, possibly through the introduction of monthly fees in accordance with the amount of data generated by each site.

Colao used his keynote speech at Mobile World Congress to say that search engines such as Google and Yahoo should pay for preferential access to the company’s networks. I’m unsure exactly what Colao meant by this statement, in particular the idea of “preferential access,” but I assume he was considering charging Google et al. a fee based on the amount of traffic they generate, perhaps in return for a prominent placing on Vodafone’s portal.

I don’t think the details are of overriding importance at this stage: The key thing is that Colao wants his firm to get more money from Google than it does at the moment, in a way that corresponds to how much traffic Google generates. According to some estimates, Google generates about 6 per cent of all fixed-Internet traffic. It’s unlikely to be this high in the mobile sphere, but it’s fair to say that Google-owned YouTube would generate much more than 6 per cent of all mobile Internet traffic.

In a further broadside to Google and Yahoo, Colao alerted regulators to the lack of competition among search engines. He said that search engines such as Google and Yahoo, which control 80 per cent of the market, are damaging for users because of the lack of competition, and he asked public authorities and regulators to take a look into the issue.

If Telefonica and Vodafone did start charging search engines for using their networks, it would be a bold new step in the operators’ attempts to profit from data traffic. The question is: Would this ever work?

Vodafone and Telefonica overplay their hand

Regardless of the details of the charging mechanism Vodafone and Telefonica are thinking of, I’m sure that Google won’t be taking these statements very seriously. For now, at least. In principle, the arguments are unsound, and in strategic terms they point to a misreading by the operators of the balance of power between Google and them.

Why? Let’s take the “wrong in principle” argument first: Why should Google pay operators to allow mobile users to access its services? And why should Google – but not the BBC, Spotify, The New York Times, Facebook, HSBC or any other content/service provider – be required to pay operators for access to networks?

Although Google, YouTube and others are more responsible for the congested networks than most, operators recoup their network investments by charging end-users to access their networks to use these services and others like them. That’s the business they’re in. Asking Google to pay to access the Vodafone network is like a TV broadcaster charging a film company to show its films over its network, or Microsoft asking Google to pay for access to Windows users.

The arguments put forward by Vodafone and Telefonica are also unsound in strategic terms. At the moment, Vodafone and Telefonica need the big search engines more than these companies need them. People expect to use Google and other popular Web sites on their mobile phones. The balance of power lies with Google and co., not any individual mobile operator. Unless Vodafone and Telefonica actually block Google and other Web sites from their networks, the majority of their customers will find a way to use them, because that’s exactly why they signed up to data plans in the first place – to use these Web sites while on the go.

I think what’s actually going on is that Vodafone and Telefonica are turning up the heat on Google and other popular content providers to prepare for negotiations down the line over the amount of money these companies pay them, especially for value-added search-generated services, such as advertising. As such, these recent arguments are the beginning of a long battle over not just which party owns the customer, but over who pays what amount to enable that customer to access popular Web sites on the go. There is also the question of who earns money from value-added search-generated services such as location-based advertising, which might use the operator’s technology.

Although Vodafone’s and Telefonica’s arguments are unlikely to worry Google et al. in the near term, it’s an open question whether they can avoid entering into some kind of close partnership with operators with a revenue-share component built in. But there’s no reason to expect that mobile operators will be able to succeed where fixed operators have failed: in getting Internet companies to pay for some of the bandwidth they use.

It’s not just that mobile operators need Internet companies much more than Internet companies need them. It’s the job of mobile operators to build the best networks they can and bill subscribers as much as they can for whatever content they use. Government policy is heading down this path in the US and Europe, and operators risk being out of step with the direction the Internet is going by publicly mulling over how to charge differential rates for certain types of content.

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In recent months handset vendors such as Palm, Motorola, HTC and Nokia have launched new handsets that compare favourably with aspects of Apple’s device. However, notwithstanding the achievements of some handset manufacturers in emulating the iPhone, the mobile industry as a whole is still leagues behind Apple in creating a truly compelling user experience of mobile internet and services.

While it’s clear for handset vendors what they have to do to close the gap on Apple in the smartphone space – produce something that’s as good as the iPhone – operators are still struggling how to replicate the level of experience Apple has created for high-spending mobile users.

Mobile operators have long been guilty of burying their collective head in the sand when it comes to assessing the success of their mobile data efforts. For five or so years, countless operator CEOs would stand up at conferences and tout the success of their closed mobile portals.

This would probably still be going on today had Apple not forced them to admit the reality: the experience they were creating was appalling. It finally became clear that the success of these portals the CEOs said for so long was just about to happen was never going to happen. No wonder data about uptake and usage of mobile portals was always so hard to come by: had this been made public investors would have taken their money from the industry in droves.

But the iPhone changed everything in the mobile industry, not least forcing executives at operators to admit that they didn’t have a clue what they were doing with advanced mobile services.

Which brings us to this month. At the FT conference held in London, I was amazed to hear almost every single speaker, including senior figures at Vodafone, France Telecom and Deutsche Telekom, state that, essentially, they were still looking for the right approach to mobile services.

Each one of these speakers cited the iPhone experience as the benchmark they were all looking to emulate. And with the exception of Vodafone and its 360 initiative, none of the speakers had much of an idea about what their response was going to be to the iPhone.

And Apple wasn’t even at the event. Come to think of it, Apple hasn’t been a speaker at any major mobile event that I can think of. What’s incredible is that Apple hasn’t needed to come and find out from the mobile industry what the latest themes and trends are. It’s created the biggest shift the industry’s ever seen itself.

And I wouldn’t like to bet against Apple or another company outside the industry creating the next major shift, because on the evidence of this week, it’s not the senior executives at the mobile companies who have the slightest idea what this is going to be. And this by their own admission.

But I think this admission of ignorance is hugely positive. For once, the mobile industry is saying: we’re not making the most of the technology (mobile broadband) available to us, and we need help to do so.

Aside from the iPhone, the overwhelming theme of the conference was partnerships. This was also something of a first. One after the other, the speakers stated the need to become genuine partners with Internet companies to capitalise from the mobile broadband technology opportunity. Most admitted their past failings in this.

The great advantages operators have, and it’s almost the only ones they have, is that they own the networks and they bill the people who use them. Aware of this, Michel Combes, CEO, Europe region, Vodafone Group, spoke about being a ‘smart pipe’ for other companies to sell their services through. Combes said that Vodafone was aiming to be the best operator partner to work with for companies outside the industry. Vodafone, among others, has now thoroughly embraced this stance – a massive turnaround from two to three years ago.

Operator executives should be commended for admitting that they’ve been bad partners to companies outside the mobile industry. Now they’ve gone to the other end of the spectrum, and are tripping over themselves to be the best partner to outside companies that have popular services to sell in the mobile space.

The big question now is: will this new attitude create tangible benefits to operators?

One other theme that dominated the conference was application stores. Companies are tripping over themselves to make application stores, and I question the wisdom of doing this. Each of these companies is, of course, following the path created by Apple in the hope that making a comparable store will lure users away from the iPhone

But I think this is ill-conceived and misguided. People buy the iPhone not for the Application Store. They buy it because it’s the best designed and made device on the market, the one that also offers the best mobile internet experience, the best media player and a great email service. Oh, and you can also play some of the best hand-held games and do a host of other things too. But the latter are just compelling extras to the rest.

The Application Store has been great for software developers, but whether it will be equally as positive for device vendors and operators is another question. I find it hard to see people buying a device mainly because it’s got a great application store. The application store is just one small part of the puzzle.

No doubt the day will come when a new device offers a whole new experience that makes Apple’s look old-hat. But given the vision Apple has manifested in the past, and the dearth of new ideas coming from within the mobile industry, I wouldn’t be at all surprised if this new vision didn’t come from Apple itself, or another that is similarly outside the mobile industry.

Operators won’t be completely dis-intermediated by Internet companies in the future. But they will have to accept sharing much less of the pie than they would like.