Vodafone Live will rock European mobile market, says Forrester
28/10/2002
Vodafone's launch of Vodafone Live will do more than help the operator grow ARPU, according to Forrester Research, who assert the new offering will help boost i-mode user growth and push Nokia's European market share down.
Vodafone launched its new mobile internet service on Friday, Vodafone Live, in seven European countries. Subscribers will get a custom-designed Sharp GX10 camera phone and access to an exclusive bundle of picture messaging, chat, email, gaming, and content services delivered over GPRS. With Vodafone Live, Europe's largest mobile operator aims to steal affluent young adults from rivals and raise its average revenue per user.
According to Forrester, Vodafone Live's integrated devices, services, and always-on GPRS data transport form the killer cocktail needed to ignite mobile internet usage in Europe. The impact will be fourfold, says the group - i-mode sales will surge, T-Mobile and O2 will wait for 3G, Nokia will lose market share, and Vodafone Live prices will drop.
Vodafone Live is a functional equivalent to the integrated i-mode services imported from Japan by KPN in the Netherlands, Germany, and Belgium. Michelle de Lussanet, Senior Analyst with Forrester Research, "Vodafone's large-scale marketing assault will raise awareness for what consumers perceive only as cool mobile services delivered to snazzy, colour-screen phones - driving customer gains not only for Vodafone but for i-mode providers KPN, Bouygues, and Telefónica as well. Japan saw the same effect in late 1999 when KDDI and J-Phone launched their mobile internet services ezWeb and J-Sky, respectively, raising awareness that helped first-to-market NTT DoCoMo triple its i-mode subscriber numbers in six months."
What about the three Pan-European operators that haven't launched integrated mobile internet services yet? Orange recently launched the SPV Microsoft smartphone into the consumer market, capable of taking pictures, email, IM, and browsing - which says Forrester gives it a credible but less tightly integrated offering. T-Mobile and O2, however, say the group have shared no comparable plans. "We believe that neither operator will blow its marketing budget so close to Vodafone's launch of Live and will instead wait to leapfrog their competition with an offering based on UMTS technology in late 2003," de Lussanet adds.
"To win the Vodafone Live contract, Sharp gave up all control of the handset it delivered: The GX10 supports Vodafone's content standards to the letter, sports a dedicated "Vodafone Live" button, and comes emblazoned with a Vodafone logo. NEC and Samsung agreed to the same subordinate role to win a contract from Hutchison 3G for 2m UMTS handsets. As operators look to dictate phone features and standards, incumbent manufacturers like Nokia that refuse them will suffer: Forrester believes that continued resistance to operators' commands will pull Nokia's European market share toward 30 per cent in Q4 2003, down from 36 per cent today," continues de Lussanet.
Forrester considers that Vodafone Live costs too much for the twentysomethings it targets: Phones start at E299; usage fees include E5 per month for the smallest bundle of data transfer, E1.50 euros per ringtone downloaded, and E5.00 per game downloaded. "By the end of the year, we expect Vodafone to slash prices to levels that match its i-mode competitors - KPN charges only E49 for the handset, down from E199 euros at launch eight months ago, and E2 per month buys KPN's i-mode users unlimited ring-tone downloads," concludes de Lussanet.
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