Orange and T-mobile merger: it’s official (finally)

The Orange, T-Mobile merger is now official. And hardly surprisingly, Orange have emerged as the dominant partner, with UK boss, Tom Alexander announced as the new CEO. It is hoped that the merger will create savings of over £400m per year by reducing the number of base stations, rationalising stores and network operations. The merger will create the UK’s largest network by subscribers, coverage and just about anything else you care to mention.
At the moment each brand will retain it’s own name, but there is heavy speculation of a complete merger within a few years. What will be the new name? Torange? Morange? Orange-Mobile? Continuing a fruit based theme (not that Orange is supposed to be associated with the fruit, only the colour), how about Tangerine?

More on the merger here.

And after behavioural targetting we have …

… mobile network behavioural targetting.

There’s been quite a bit of press this week about Google starting to use behavioural targetting in their advertising. If you’re not familiar with this, the concept is simply that Mr Google will use cookies to track the sites you visit and then serve you relevant advertising. Of course Google who’se policy is ‘Don’t be evil’ have assured users that there is nothing sinister and that they will not store sensitive site visits, nor store any personal information.

Understandably, many users are concerned at yet another breach of privacy. Perhaps in the grand scheme of things, Google’s behavioural targetting is only a small example of breaches of privacy. Maybe we should be more worried about governments and living in the most watched societies ever?

The concern over Google will pale into insignificance when the general public realise that mobile network operators are working on their own version of behavioural targetting.

In terms of gaining information, network-based behavioural targetting offers some distinct advantages over the Google version. The networks know where you are. (And they know where you live). They know that you spent last Friday night in Hoxton and that you go went on trips to Paris and Barcelona. Their justification will be that the adverts can be better targetted to the individual and that individual will benefit because information will become more relevant.

Unfortunately few people trust the mobile networks. Unlike Google their moto seems to be ‘Do be evil. And why don’t we charge the customers as much as we can whilst we’re at it.’ It is hard to image how the networks will run their behavioural targetting responsibly and easy to image that they will alienate the mobile user further.

Fortunately network behavioural targetting is a few years away. It seems that only government regulation will prevent any evil behviour, so lets hope that there is some stringent legisation in place by the time the networks are ready to chase their advertising revenue.

Roaming data charges capped. About time too.

Never one to do things voluntarily, the mobile network operators in the EU have been forced to cap their outragous roaming charges for data. A new EU regulation means that operators can charge no more than 50 Euro Cents wholesale and 4 Euros to the consumer.

The operators had been warned about the roaming data charges for sometime, but typically ignored it. With the increase of always on smartphone mobile connections, the issue of data costs whilst abroad has become a more apparent problem to consumers. This is an extreme case in point from the Daily Mail.

So its a maximum of 4 Euros. Not exactly cheap (don’t they know there’s a recession on), but at least there has been some acknowledgement that the operators were acting outrageously with their data charging policy.

Will Google and Apple Force the Mobile Networks to Rethink Their Business Model?

For some years now, there has been a major division between the internet and mobile economies. The internet is largely free to user and the mobile isn’t. Google has made an art form of the free model, releasing all kinds of apps, including mobile ones at no cost. On the other hand, the networks charge for almost everything.

As one Orange executive once told me ‘We do not understand any customer unless there is a billing relationship’. In other words, unless the network is charging them for something they are not considered to be a customer. The iphone has moved the mobile smartphone market forwards, by offering a genuinely seemless mobile internet experience. Just like your PC the internet is just ‘there’, it’s always on.

As soon as that happens, adding all kinds of internetty applications – not just games, but maps, weather and so on, become standard. The evidence of the success is from the iphone Appstore and the results which show that Apple’s users access the internet considerably more than others. Whilst Apple’s entry into the phone market has been to produce a great handset and beautiful operating system, Google’s entry has been less glamorous, but potentially more significant.

Google started by building some excellent mobile applications – for example maps and email – and has now launched it’s own OS. And now everyone’s doing it! Expect 2009 to be the year of the smartphone and the year of the application store, Microsoft will be launching Bazaar this year. Low cost computer manufacturer Acer are launching their own smartphone and the inevitable application store.

The problem for mobile networks is that the offerings from these companies challenge their traditional billing relationship. Why pay for a call when you can use Skype (available for both iphone and Google phone)? Why use SMS when you can use instant messenger? Why send an MMS when you can email your pictures, or upload them to your Facebook? Why SMS to Twitter when you can send it for nothing with a Twitter app on your phone? Even location services, which were previously the (expensive) monopoly of the networks will be opened up with Google Latitude. Apart from the basic data cost (typically around £7.50-£15 per month), users can do pretty much everything on their smartphones without having to pay for them. The money in mobile will be in paid apps and mobile advertising. So the networks have a dilemma. Do they embrace the new free(ish) world of mobile or carry on regardless and make money while they can? Given their past form, I suspect it will be the latter.