At a great panel discussion at the Mobile Internet Forum in Vienna, representatives from three operators gave us their opinions on how MNOs can really generate profit from traffic on 3G Networks. Carlos Fernández Casares, Mobile Data Services Marketing Director, TELEFÓNICA ESPAŇA, along with Oliver Schmitt, Head of Mobile Internet & Content, O2 GERMANY and Yesim Gurdere Erman, Head of Mobile Internet Services, AVEA. The panel was chaired by Gavin Gibbons, Executive Product Manager, Mobile, BBC FUTURE MEDIA & TECHNOLOGY.
Gavin: Two comments from mobile operators really stood out from yesterday. 3 said that there’s no money to be made from access, while T-Mobile said that traffic is the main source of business. So what advice would you give to people getting into 3G?
Oliver: I would say that now is the right time to get into 3G. Everything is in place. The technology is ready, and there is enough capacity for services.
Carlos: My advice would be to let your proposition lead the technology. Do not let the technology lead proposition. For example, when Telefonica started launching 3G, there were no devices or coverage in the market. Now it’s a much better landscape.
Yesim: My advice is to look to the three critical areas. Speed is critical, coverage is critical and pricing is critical. In Turkey we have had the advantage of watching the market develop… and we have had no coverage ourselves. Now we need to build our network, and we’ve learned some things. For example, unlimited browsing on a flat rate is the best option for carriers.
Gavin: What’s happening now that’s having an impact, and where do you see it going over next 12 months?
Carlos: The economy in Spain is very bad. As operators we are suffering, but we are suffering in voice rather than data! Mobile data connectivity is growing. Mobile internet is growing faster than we thought. If the economic situation was not as it is, the data boom would have been much larger. Even so, we are still growing. If it wasn’t for the crisis, we would have seen exponential growth this year.
Gavin: What are customers going to be doing? What’s the right response to the economy? Batten down the hatches, or invest more?
Oliver: Germany has not been as badly hit as Spain yet, but we see customers are still phoning and using data. Customers want to save, but the way they save is by not buying smartphones and new handsets. So it’s harder to do good data services because the handsets aren’t out there. O2 Germany is continuing to invest. We must make the services better so that more people will want to get a better experience on the mobile web
Carlos: Telefonica will continue to invest.
Yesim: Attracting high-value customers is critical. Even through the crisis, our data expansion is going very well. First we want to attract premium users to 3G. Once you have attracted high-value users, other users will follow.
Gavin: We’ve been talking a lot about various data plans, but there’s been little talk about giving better service for a higher price. How will the operators go after high-value customers?
Carlos: Telefonica will be introducing a high-quality tarriff for those who want a premium service – which includes higher speeds.
Oliver: Since we have abandoned limiting downloads and data transfers, we have had to put speed caps in place. We can sell higher speed limits for higher prices. After we changed from data limit to speed cap, our data plan sales went up by four. With a speed cap you take away the risk from the customer that are inherent in data caps, like bill shock. There is huge potential in traffic revenue, hundreds of millions of euro. Right now there are very few people who actually make proper use of the mobile Internet, but there so many who would happily pay in order to do so, if only it were easy.
