Mobile operators: Increased competition brings opportunities for mobile VoIP
I just read the Q2 2008 results from Germany’s o2.
The average customer in Germany on O2:
- Voice 144 Minutes (plus 9 percent)
- SMS 829 (plus 12 percent)
Turnover development (weakening due to prepaid erosion) Contract customer: Euro 29.30 (plus 17 percent) - 6.7m customers - customer growth (17 percent) Prepaid Customer: Euro 6,10 (minus 9 percent) - 6.8m customers - customer growth (18 percent)
Total ARPU / customer (pre and postpay) / month: Euro 17,60 (minus 16 percent) (compared to Q2 2007)
My analysis:
While VOICE and SMS are growing quarter by quarter (annual growth between 10 - 12 percent) the business is under very strong pressure from price erosion in the prepaid segment. Contract customers are moving heavily to prepaid (mix now 50 / 50) (confirmed to me by CEO of Carphone Warehouse Germany). Therefore strong revenue and margin cannibalization from prepaid discounters for all mobile players (o2 is offering 9 euro cent / min), T-Mobile 8 euro cent / min which is about the termination rates in Germany. O2 discounters are Fonic, e-plus simyo, T-Mobile Maxxim, Congstar, Vodafone Bild, all of them at 9 cent / min except now Maxxim with 8 eurocent / min.
Clearly money is still being made as the small print reveals that special numbers like 018 (service numbers) are charged at very high rates, (example 69 cent / min at Maxxim) as well as very very high rates for prepaid for international Calls. We think this is a great opportunity for Truphone to act as an add on to millions of prepaid customers who don’t want nasty surprises when calling international. My personal experience has been that truphone saves 80-90% on international calls.
Conclusion:
While voice and SMS is dead (turnover wise), it is growing in actual volume at very healthy levels (not to dissimilar to the napsterisation of the music industry). Once a product goes free the volume explodes. See truphone to truphone usage (see what happens when you convert your near field into truphone customers, voice minutes and SMS goes up dramatically). If all your near field uses truphone (within your companies, your family and friends) your call pattern changes dramatically, plus productivity increases within corporations and individuals due to the added benefit of quick and simple person to person communication globally.
truphone is crystalizing itself as the global telecom operator of choice (for individuals and corporations) for the next century. The next century will be a support driven economy versus the managerial economy of the 20th century (mainly build via the models of entrepreneur Ford and managers like Sloan). So individuals and corporations can adopt by choice a platform like truphone to build a customized AT&T, Vodafone, Deutsche Telekom based solution in the IP domain versus the switched infrastructures of the telecom corporation of the 20th century.
I just read the Q2 2008 results from Germany’s o2.
The average customer in Germany on O2:
- Voice 144 Minutes (plus 9 percent)
- SMS 829 (plus 12 percent)
Turnover development (weakening due to prepaid erosion) Contract customer: Euro 29.30 (plus 17 percent) - 6.7m customers - customer growth (17 percent) Prepaid Customer: Euro 6,10 (minus 9 percent) - 6.8m customers - customer growth (18 percent)
Total ARPU / customer (pre and postpay) / month: Euro 17,60 (minus 16 percent) (compared to Q2 2007)
My analysis:
While VOICE and SMS are growing quarter by quarter (annual growth between 10 - 12 percent) the business is under very strong pressure from price erosion in the prepaid segment. Contract customers are moving heavily to prepaid (mix now 50 / 50) (confirmed to me by CEO of Carphone Warehouse Germany). Therefore strong revenue and margin cannibalization from prepaid discounters for all mobile players (o2 is offering 9 euro cent / min), T-Mobile 8 euro cent / min which is about the termination rates in Germany. O2 discounters are Fonic, e-plus simyo, T-Mobile Maxxim, Congstar, Vodafone Bild, all of them at 9 cent / min except now Maxxim with 8 eurocent / min.
Clearly money is still being made as the small print reveals that special numbers like 018 (service numbers) are charged at very high rates, (example 69 cent / min at Maxxim) as well as very very high rates for prepaid for international Calls. We think this is a great opportunity for Truphone to act as an add on to millions of prepaid customers who don’t want nasty surprises when calling international. My personal experience has been that truphone saves 80-90% on international calls.
Conclusion:
While voice and SMS is dead (turnover wise), it is growing in actual volume at very healthy levels (not to dissimilar to the napsterisation of the music industry). Once a product goes free the volume explodes. See truphone to truphone usage (see what happens when you convert your near field into truphone customers, voice minutes and SMS goes up dramatically). If all your near field uses truphone (within your companies, your family and friends) your call pattern changes dramatically, plus productivity increases within corporations and individuals due to the added benefit of quick and simple person to person communication globally.
truphone is crystalizing itself as the global telecom operator of choice (for individuals and corporations) for the next century. The next century will be a support driven economy versus the managerial economy of the 20th century (mainly build via the models of entrepreneur Ford and managers like Sloan). So individuals and corporations can adopt by choice a platform like truphone to build a customized AT&T, Vodafone, Deutsche Telekom based solution in the IP domain versus the switched infrastructures of the telecom corporation of the 20th century.
