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Drifting off

Cannes, February 2005; remember that? 3GSM World Congress visited the Côte d’Azur for the last time and Siemens decided to mark the end of an era by hiring a Greek passenger ferry and mooring it out in the bay. An enormous Siemens logo painted on the flanks of the ship gave the firm great brand exposure but the experiment was not wholly successful.

July 5, 2013

10 Min Read
Drifting off

By The Informer

Cannes, February 2005; remember that? 3GSM World Congress visited the Côte d’Azur for the last time and Siemens decided to mark the end of an era by hiring a Greek passenger ferry and mooring it out in the bay. An enormous Siemens logo painted on the flanks of the ship gave the firm great brand exposure but the experiment was not wholly successful.

For a start it soon became clear that, once you were on the huge boat, you were no longer captain of your own destiny.  You either had to wait for one of the infrequent launches to take you back to terra firma or leap over the hand rail like an extra in Titanic and swim for freedom. The press were wary. Customers were wary. The Informer rather suspects most of team Siemens were wary, too.

But the defining failure of the exercise was that not even Siemens was in control. One morning, the delegates sauntering along Boulevard de la Croisette noticed, as they squinted out to sea, that the Siemens ferry had disappeared.

Rumours shot round the event that it had sunk and industry execs stood shielding their eyes from the sun as they scanned the horizon for bobbing survivors, clinging to demo equipment. In fact, during the night, conditions on the water had forced the captain of the good ship Siemens to move the vessel further out to sea, and with it the vendor’s leftfield event marketing strategy.

This week it was announced that the Siemens ship is to be scuttled as Nokia will buy the German firm out of their 50/50 network equipment joint venture for $1.7bn. This has been long on the cards and Siemens has been awaiting its departure with the same gnawing impatience as one of the captive visitors to its vessel in Cannes eight years ago.

The transaction is expected to close during the third calendar quarter of 2013 and will turn the infrastructure company back into a wholly owned subsidiary of Nokia while the Siemens name will be phased out of branding.

Stephen Elop, President and CEO of Nokia, said: “With its clear strategic focus and strong leadership team, Nokia Siemens Networks has structurally improved its operational and financial performance. Furthermore, Nokia Siemens Networks has established a clear leadership position in LTE, which provides an attractive growth opportunity.”

The decision actually brings about the rebirth of Nokia as an equipment brand and a handsets to network supplier in the mobile industry. That’s an interesting oddity but it’s not clear that it brings any inherent advantage. The Informer suspects that Nokia would have been more than happy to continue as a partner and bought Siemens out only because the alternative was a substitution in which it would have had little say.

For now the firm is still Nokia Siemens Networks, though, and it was under this name that it announced an expansion deal this week with Saudi operator Mobily worth $325m.

More upbeat about the nature of partnership this week are Vodafone and UK retail heavyweight Sainsbury’s, which announced the formation of a new MVNO. Sainsbury’s operates more than 1,100 supermarkets in the UK and has diverse offerings across online retail, energy provision and banking and financial services. The new brand ‘Mobile by Sainsbury’s’ will launch later this summer.

In one of the drawers in the Informer’s kitchen is some foil that is branded ‘Foil by Sainsbury’s’ and every time he gets some out the Informer is struck by the faintly ludicrous branding. As if there is some kind of Sainsbury’s-ness about the foil that should make it different to foil that is ‘by’ somebody else. Especially given that the supermarket doesn’t make its own foil.

Certainly it is hoping that the mobile services that are ‘by’ Sainsbury’s will feel different to those that are by everyone else, Vodafone included. Luke Jensen, Sainsbury’s group development director said: “Our customers trust us to provide top quality products and service at fair prices, and Mobile by Sainsbury’s feels like a natural extension of our brand as well as a great way to reward our customers.”

So long as those customers aren’t using their phones at the checkout. In a lovely bit of timing the MVNO launch coincided with Sainsbury’s having to issue an apology to a customer who was refused service in one of its stores until she ended a mobile phone call. A member of staff told the customer that it was company policy not to serve people who were talking on their phones because it is rude.

Sainsbury’s denied that this is the case but perhaps it could install jammers at its checkouts that stop people using Mobile by Sainsbury’s handsets while doing the far more important business of Shopping with Sainsbury’s. The customer was offered a £10 voucher but has pledged to take her business elsewhere.

Vodafone was engaging in a bit of handbags with UK competitor and LTE pioneer EE this week, over advertising at last weekend’s British F1 Grand Prix. The firm’s sponsorship on McLarenMercedes cars driven by Jensen Button and Sergio Perez carried the words “Ultrafast 4G”, something which Vodafone has yet to launch in the UK.

A Vodafone spokesperson told Marketing Magazine that EE’s head of brand and communications, Steven Day, had demanded that the offending words be removed. But this was “sponsorship, not advertising” the firm said, meaning that it was creating awareness rather than pitching an existing product.

It’s all Double Speak. Or, if you’re EE, “Double Speed”, which is the catchphrase the operator is attaching to its beefed up LTE service following this week’s switch-on of another 10MHz of refarmed 1800MHz spectrum, which gives it 20MHz of contiguous LTE1800 goodness.

This makes the UK network faster than the LTE networks of the US and Japan, said Olaf Swantee, EE CEO, and on a par with the best networks in South Korea. The enhanced service will be available in 12 UK cities initially. While speeds of 150Mbps have been achieved in EE’s labs, the average speed for users will be between 24 – 30 Mbps, Swantee said.

In a nod to operators in the US market, which has more than half of the world’s LTE subscribers, EE is also introducing shared pricing plans enabling users to spread data consumption across devices or a group of people such as family members. Up to five devices can be connected to a single tariff with a supplementary cost starting at £12/month for SIM only and £22/month for an additional smartphone.

In a bid to stimulate greater uptake of cellular services for tablets, these devices can be connected at £5/month SIM only and £26/month for a new tablet. The firm claimed typical savings for a family of four could run to more than £900 over a two-year period.

“It’s now common for people to be using a PC, a smartphone, a tablet and perhaps other devices too. But apart from smartphones, the rate of attachment of these devices to the mobile network remains low in the UK,” said John Delaney, Associate VP for mobility at analyst firm IDC. “This suggests that people are being put off by the need to buy a separate mobile subscription for each device they want to connect to the mobile network.”

At the press conference EE showed a video in which one of its LTE customers, a photographer, spoke with great enthusiasm about the regularity with which he is now able to beat his competitors to the deal thanks to the swiftness of his LTE service. At the end of the video he said he wanted to keep the brilliance of LTE a secret so he could be the only one who had it. Which, of course, is the only way he’d be able to maintain his dazzling customer experience.

He could always climb up Mount Everest to send his photos. There shouldn’t be too many users up there clogging up the LTE-TDD network that ChinaMobile has installed with the help of Huawei. Why? Because it’s there. The vendor described it as “an important milestone in global LTE-TDD deployment.”

Back to Vodafone and the company has not been having the easiest time of things in India for a while now. As well as its long-running tax dispute there are also issues around the renewal of its licences in Mumbai, Kolkata and Delhi. Local reports this week suggested that the firm has offered to bay Rs40bn to settle that particular problem.

Foreign ownership in India has been tricky historically, with the government requiring overseas investors to partner with local firms. But this week India’s Telecom Commission endorsed plans to allow foreign firms to take full ownership of Indian mobile operators. Currently, the level of foreign direct investment (FDI) permitted stands at 74 per cent.

One partnership that seems to be off the cards altogether is that proposed between Hutchison and TelecomItalia about a potential tie-up in the Italian market. Hutch has been making consolidatory moves recently, in Austria and Ireland, but discussions with TI have been faltering for some time.

This week one of TI’s board members told Reuters that talks had “definitely finished”.

That might be over but, for Mozilla, the mobile journey has only just begun. The open source software provider this week released details of the first Firefox OS smartphones prior to their commercial launch.

The Alcatel One Touch Fire and the ZTE Open will be launched by European operator groups DeutscheTelekom and Telefonica, in Poland and Spain respectively, in the coming weeks.

In a blog post, Mozilla was keen to point out one particular concept within the Firefox OS; an app search that “transforms the phone to meet your needs at any moment”. Users can swipe their phone, begin to type what they are interested in and the phone’s user interface will adapt instantly based on the user’s needs, the firm said. It explained for example that a search for a music artist will return results to buy or listen to a song, or buy concert tickets from that artist instantly.

In addition, the Firefox handsets will include built-in Facebook and Twitter social features, maps with offline capabilities the Firefox Web browser and Firefox Marketplace.

José María Álvarez Palette, COO of Telefónica said that consumers should not be locked to any one system but should “have the choice to consume the content they want and the flexibility to be able to take it with them when they change devices”.

In other handset news, the bad times continue for Blackberry. The firm posted a loss of $169m for Q2 this year, with a subsequent drop in share price carving $2.1bn from the company’s value. That loss is on revenues of £3.1bn for the quarter, which is up almost ten per cent year on year. But the cost of sales was up four per cent as well.

“During the first quarter, we continued to focus our efforts on the global roll out of the BlackBerry 10 platform,” said Thorsten Heins, president and CEO of BlackBerry. “We are still in the early stages of this launch, but already, the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving themselves to customers to be very secure, flexible and dynamic mobile computing solutions.”

Secure, flexible and dynamic mobile computing solutions they may well be. But profitable they ain’t.

At least the numbes are real. This week Algerian operator Djezzy coughed to the fact that it had been unwittingly overstating its customer base by 1.4 million subscribers. Oops.

Djezzy is the subject of a drawn out saga that centres on the Algerian government’s desire to part nationalise it through the acquisition of a 51 per cent stake from Vimpelcom. The government indicated its intention to get a fresh valuation of operator in May this year and this latest development probably strengthens its hand somewhat.

Finally this week a plea to everyone out there in vendor PR land: Press releases about contract wins that don’t include the name of the operator who has purchased your product, no matter what tier they’re in, are about as much use as Teflon toilet roll.

This can be ably demonstrated by the removal of the name of the vendor, as well as the name of the operator.  Observe: A BSS vendor has sold its product to an operator. See? I know it’s not your fault, but there’s nothing we can do with it!

Take care

The Informer

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