Telefonica, Orange, Verizon Hope To Win The Next Round In Mobile Content

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Credit: Claudio Gennari

The smartphone revolution, as led by Apple (NSDQ: AAPL), has given us a whole new way to consume mobile content, in the form of apps. The problem, in the view of mobile operators, is that apps largely disaggregate operators in their business model. But operators are not giving up so fast: we’re seeing some new initiatives — NFC deployments, new API programmes, and even proposals to charge based on different kinds of content — that are giving us a glimpse of where operators are hoping to play in the next generation of mobile content.

Orange/NFC: The France Telecom-owned European operator has made a significant commitment to NFC, in such a way that Orange hopes will keep it in the centre of transactions. It plans to deploy NFC-integrated SIM cards for all contract-based subscribers in its European footprint, starting in the second half of 2011.

Orange also says it is working with handset makers to make sure that more than half of the new smartphones it deploys on its network will be compatible with these SIMs. In France, where incumbent Orange is the largest operator and heavily influences how other operators shape their strategies, it is committing to equipping at least half a million of its customers with compatible handsets by the end of 2011.

These are significant steps for a mobile operator, and it seems to be more than a coincidence that they were announced in the same week that Google (NSDQ: GOOG) started to sell its own NFC-enabled Nexus S handsets (with the NFC not on the operator-controlled SIM card) in Europe. By putting the NFC onto the SIM cards, Orange hopes to play a bigger role in how customer information is managed.

Telefonica/BlueVia: The Spain-based operator Telefonica (NYSE: TEF), which has extensive operations throughout Europe as O2 and Latin America, is launching a new open-API program to encourage developers to make apps for its own app store initiatives, which cover 80 million users across its operational footprint. This project is at least a year in the planning — O2 first told me about it last January.

What’s so special about BlueVia? It’s one of the first examples of an operator opening up the inner parts of its network to developers for them to interconnect better with their billing and subscriber systems. This is potentially a big thing, giving apps a lot more functionality and ability to target users better, and it of course means Telefonica gets a revenue share on the services. According to the operator’s presentation, this will be anything from 50 percent for mobile ads to the standard 30 percent for apps.

But Telefonica may have lost a lot of time in getting it established, as Android has flooded the apps market and became the most likely competitor to Apple’s App Store. A spokesperson told me today that the delay in launching was because Telefonica “wanted to get it right,” but in the battle to get developers to create services for app stores, Telefonica may be joining the end of a very long line.

Charging for apps: In the latest chapter of this ongoing debate, operators are starting to look more closely at how they could charge for specific services that are running on their networks, such as the data-intensive YouTube service, or the hugely popular Facebook. Engadget and Wired both picked up on a Webinar from Fierce Wireless that covered this topic, put on by Allot and Openet, traffic and subscriber management companies that count Verizon, AT&T (NYSE: T) and Vodafone (NYSE: VOD) among their customers.

Coincidentally, tomorrow the FCC is due to decide on how it will look upon the idea of net neutrality in wireless networks. So far, it has said that while it supports net neutrality in fixed broadband, for now it believes that operators will be able to meter different kinds of mobile content in different ways, which opens the door to operators putting apps-based charging models into place.

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Thanks for writing on this subject. What about niche app stores?

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