View Full Version : Symbian OS Bypasses Revenue Streams 'Shock'


Ewan
31-05-2004, 09:45 PM
Mako Analysis have decided the openness of the Symbian OS is a 'bad thing' for operator revenue (The Register reports (http://www.theregister.co.uk/2004/05/31/symbian_operator_revenue/)). The fact that users can bypass the offerings of the Networks and go for their own installed products, apps, ringtones and themes will potentially deprive the network of revenue.. God forbid that a User can make an informed choice instead of having to rely on T-Zones or Vodafone Live...

Dusty
01-06-2004, 09:21 AM
Hi,

(I just saw this story before coming here, & wrote a rant about it to a friend, so I'll reproduce it here)

I can't believe that people actually get paid to write reports like this: specialist subject: "The Bleedin' Obvious", or what?

Yes! Shock horror! People who've paid the extra money for smartphones over
normal handsets will locally install apps to them, rather than being
continually milked by the network operators for things like low-quality
locked digital music streaming & artificially fenced-in web browsing. To
someone like myself that's been using Nokia Communicators for a good few
years already, that's totally unexpected & outrageous... ;)

I also can't see why they're unduly demonising Series 60 over other
flavours of Symbian, PalmOS, PocketPC, or even Linux. Although I concede
that S60 is currently the most popular platform, it's functionality in
this respect is no different from its rivals, so why single it out for
punishment?

Most consumers are perfectly happy with Series 40-type 'smart enough'
phones anyway, so the ringtones, etc. revenue stream's maintained there.
S60's just too complex for a lot of users, & overkill for most.
Business or alpha-geek types with S60 or cleverer devices are probably
going to do local installs anyway, or simply switch to non-phone PDAs for
mission-critical mobile apps if pressured against handset flexibility by
the networks.

So, are they advocating some form of feature blocking on the handsets the
networks sell, removing smartphones from shelves, or what? Any network
operator that sticks an artificial fence around their handset offerings is
going to be at a disadvantage, & rightly so - the consumer's paid for the
phone, they should be allowed to use it to its full potential. It'd be
like an ISP saying that their customers can only use your computer with
their broadband service if the customers aren't allowed to install programs from
CD-ROM - totally unreasonable. The network subsidies on the phones will
still be offset by voice revenues, as always, & some people will always
want to use their mobiles as wireless laptop modems. If the operators are
still smarting over having paid over the odds for a 3G license, well,
that's their problem, & not the fault of their customers. The consumers
don't owe the network operators a damned thing, other than the revenue for
the network facilities they use. Attempting to hobble the handsets is
simply lazy thinking that'll needlessly alienate the consumer segment with
enough money to afford smartphones in the first place. And suggesting that
an operator simply deliberately avoids offering such smartphones is
clearly stupid too - if the devices aren't available from one operator,
they will be from another.

Meanwhile, in other news, Foobar Consultancy (PLC) have published a
damning new report warning that "the sky is blue"...

Unreg1234
01-06-2004, 12:49 PM
I see where u r coming from but its clearly an article targeted at their cusomters (operators etc) not the mass public. I work for an operator and have to say that all of what they are saying rings true and its something that we are looking into at the moment but dont have an answer for. This is the first external piece i have seen that highlights the problem. being aware of a problem and having the board level momentum to do something about it are two different things, when an article comes out like this one, the board pay attention and things change, its a good thing. It helps us (the operator) get our house in order and head off something that could lose us millions in the long run. we have paid a fortune for licences and networks so need a way to make the money back, if we turn into a simple pipe we will never make the money back and then confidence in the sector as a whole slips and all wireless share prices slide. Seeing the big picture?

Ewan
01-06-2004, 01:21 PM
Indeed, there is a bigger picture, but it wasn't your customers who decided to pay billions for 3G licences, it was the telco's. Here's the rub, if you have an informed customer base, are hey going to buy a device that is closed to only your network (ie the revenue streams talked about above) or one open to them puttingon what they like?

If, ultimately, I own my phone, then I believe I should have no restrictions placed on that phone. Why should you, as a network, decide what is on my phone, especially if I have bought it offline?

Yes, networks should make money. But denying the ability to connect to my own mailbox, as opposed to a dedicated netwok POP3 maibox (cf Hutchinson Telecom's "3" operation) will stop me signing up with your network. As would locking me into a Walled Garden of websites, rather than a 100% Open Wap/XHTML browser.

Can you see the big picture as the user sees it?

Unreg1234
01-06-2004, 01:55 PM
Yes i know what you are saying as obviously its a freedom of choice issue but there are a couple of other things to consider; the operator heavily subsidises the devices into the market and then has no say over what happens to them, if you look at other subsidised products such as SKY digi boxes there is 100% control by SKY over what channels you can access on there. Conversely if u take DoCoMo who do not subsidise their phones they have a huge amount of control over them. Vodafone are heading in the same direction with a greater emphasis device control.

Additionally , as you will know some of the apps that get loaded onto phones are a little unstable to say the least and if the user manages to screw something up or lose settings or whatever they ring their operator to fix it.

If we wind back to the original point of the article we are talking about a B2B company who's priority is to make their customers aware of any potential opportunity or threat, its not targeting consumers.

Dont get me wrong i think having an open OS is great but basic economics dictate its a fool who supplies its customers with the tools to bypass their own revenue streams wouldnt you agree?

Bassey
01-06-2004, 03:14 PM
I think this boils down to the difference between subsidised handsets and sim free.

If I buy SIM free at 500, I expect to be able to use it as I wish with my provider, who will, in turn, charge me full whack for the privelage.

If I pay 100 for the handset through my provider, get 100's of minutes and texts thrown in etc, then the service provider has every right to restrict what you can access in order to make their money back.

We can already see signs of this happening, with firmware upgrades being restricted to SIM free P900's. I can only see this being extended. As long as the networks are up front about the services availble to subsidised handsets AND don't restrict SIM free handsets as well, then I have no problem with it. It is then up to the consumer if they want to pay full whack for a full service, or less for a restricted service. You get what you pay for!

If, however, the networks decide to restrict SIM free, when you've already gone out and paid several times the subsidised price, then that is a different matter entirely.

Ewan
02-06-2004, 03:10 PM
Chris Davies a Mobitopia has a view the networks should read (http://www.mobitopia.com/20040602.html#165715). And we all should too!

Dusty
02-06-2004, 04:55 PM
That Mobitopia article's pretty good, I think.

Yeah, I wasn't having a direct go at the people who work for the operators, or indeed any operator in particular (I specifically avoided mentioning 3, for example). It's good to hear their side too. I know that network operation is a cut-throat business, & in Europe, the operators get flak from the customers & government regulators on one side, & pressure from the big handset makers on the other. I do think that this discussion has raised some interesting points from both sides.

However, I still tend to feel that any mobile network operator that needs an external consultancy to tell it that people who pay more for smartphones will tend to use them in the way that they were designed to be used needs to look more carefully at its management. TBH, I was actually a little surprised that the networks immediately offered N-Gage subsidies on its introduction, when it was fairly unclear to me that telephony was the primary function of the device. I suppose that that could partly be attributed to pressure from Nokia, though?

In the interests of fairness, I should clarify my position as Devil's Advocate to the networks. I'm currently in a country that doesn't have network operators that offer subsidised handsets at all, so I freely admit that I have a particular view on this: I can basically do what I like with my phone, & am used to that, although I've paid more up-front for the ability. If a network's less than ideal here, I can just switch to another, without having to buy myself out of a contract. I suppose that the UK, etc. way offers more options, so it's better, & I should maybe cut their operators some slack. I travel a fair bit though, so the odds are that I'd still buy a SIM-free phone so that I can switch cards between countries, rather than pay international roaming charges on a locked handset.

I would also still argue that the handset subsidies offered in other countries are to tempt potential customers into signing up to a contract which will more than pay for the difference in locked/SIM-free phone prices over the course of that contract. Sure, a cheaper handset up-front is nice to get as a customer, but the networks don't subsidise them out of sheer altruism - they do it to get a captive customer. I'd argue that (at least for me), in addition to holding me to a fixed-length contract, hobbling a smartphone's capabilities would negate the point of getting that smartphone. If (as some stats suggest) smartphone users actually run up bigger bills (I know I do - HSCSD is lovely, but it costs a mint!), then that'd really be killing the golden goose. However, I would also concede that anyone who signs up to a contract that does limit their phone knows what they're buying into from the start & paying less for it as a result. So, I suppose that that's fair enough, provided all parties are clear in their expectations from the outset. You pays your money, & you makes your choice!