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European and U.S. Wireless Shows
Different Markets, Different Approaches
By Ken Osowski |
Last month’s 3GSM Show in Barcelona and the CTIA Show in Orlando, Florida underscores just how different the U.S. and European prepaid wireless markets are. In the US., the focus is on marketing. In Europe, it’s on services.
Granted, U.S. MVNO Enablers, or MVNEs, are laboring under the constraints of patent restrictions that prevent them from deploying real-time prepaid services. Typically, there’s little or no overlay of VoIP transport services and economic benefits, or compelling subscriber features. This is, in large part, because U.S. operators can’t participate in real-time call control, so they can’t integrate deep-seated core services such as GPS, which remain the domain of the large carriers.
Some MVNEs do bolt-on modest overlay services – usually near-time billing related features that interface to the carrier’s wireless services, or customer-provisioning features. But by and large, U.S. MVNEs primarily focus their business strategies on marketing, and frequently target specific demographics and subscriber populations: Parents, music-lovers, gamers, economically-sensitive subscribers and specific ethnic populations and subscribers, languages, etc.
The Barcelona 3GSM Show illustrated that Europe is a very different wireless prepaid market, a less-constrained one that’s driving a new wave of VoIP network build outs and subscriber service roll-outs among U.S. and European MVNEs who are tackling the European market. This market is at least as focused on service differentiation and creation of cost savings as it is on demographic-driven business models. It’s implementing softswitch-based gateway networks to arbitrage roaming charges between countries, and innovating new subscriber services as well.
For example, U.S.-based MVNE/MVNO, and international operator, Voyport, is building out VoIP call transport capabilities that can allow U.S. MVNEs to offer more affordable and profitable European services. This allows U.S. MVNE business partners to potentially explore the compelling opportunity to leverage and arbitrage against international roaming charges. Potential partner MVNEs should look carefully at the profiles of their subscriber bases, and evaluate the compelling opportunity to provide subscribers with a service bundle that could meet both domestic and international mobile communications needs with a single service provider relationship and a single, convenient handset. Right now, this may involve swapping SIM cards as users travel from country to country, but it’s an example of how Europe’s high roaming charges are creating opportunities to knock transport costs down from 99 cents a minute to around 15 cents, and for many MVNEs this is clearly a potential service product worth looking at.
For business subscribers and other consumers with International ties, the improved economics and the convenience of a single DID, voicemail service and auto-attendant are extremely attractive.
Just as in the wireline market, VoIP transport ultimately acts as an economic “T cell” that latches onto arbitrage opportunities, providing users immunity from prevailing high-priced services and then driving prices down in an inevitable competitive cycle. At the same time, VoIP creates new opportunities for layering services and services to differentiate.
3GSM Barcelona featured a number of new European subscriber-oriented services based on the MVNE’s ability to participate in call control. Many of these are subscriber-oriented and practical - even vertical - in nature. For example, one MVNE is implementing new subscriber conferencing features and a customized interface that significantly reduces the amount of complexity and pain involved for business users to initiate and conduct large-scale audio conference calls on cell phones.
Both markets have many common traits: teenagers and young adults all around the world love ring tones, music-driven attendant features and new handsets that support entertainment and enhanced collaboration such as gaming. And CTIA and 3GSM both confirmed that feature innovation is the only sustainable advantage.
Please keep emailing your questions and comments to me at
Keno@pactolus.com
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