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Monday, March 02, 2009

Nokia and Skype - the masters at game theory

Various mobile operators are allegedly "furious" that Nokia intends to put some form of Skype client on upcoming devices like the N97.

It's not immediately obvious to me whether it's a full two-way mobile VoIP service intended for use on HSPA, or whether it's an iSkoot-type circuit voice dial-around as seen on various of 3's phones (especially the INQ Skypephones and Facebook device).

Either way, it's clear that Nokia has hit something of a sore spot for the operators.

But although various operators seem to be waving sticks and threatening Nokia on this issue, I reckon it's all bluster.

Because if Nokia was *really* serious about VoIP as an important generator of revenue and traffic, it would have done it itself, not partnered with Skype. The possibility of adding voice into Ovi was something I wrote about over a year ago. An Ovi VoIP client could be perfectly integrated with the device, Nokia could even use SMSCs to create a good off-net SMS. I'd also bet that Nokia could create a really good multi-IMSI experience like Truphone's if it chose.

I reckon that the Finns are really, really good at poker.... or at least the more academic discipline of game theory.

The operators know that Nokia is large enough and skilled enough to "go nuclear" with VoIP if it really wanted. Apart from the devices, its relationship with NSN would help on interop testing and optimisation. And it's large enough to acquire a (struggling) operator with pre-existing roaming deals and number ranges.

I reckon we'll see a bit more grumbling about the Nokia/Skype thing - like we did with Ovi and its SIP VoIP capability and others. Nokia will probably add a "delete option" for the N97. But it will happen elsewhere, and Orange, O2 and co. will start to doubt the wisdom of their N97s being under-specced compared to the ones available elsewhere.

Of course, it's not a surprise that two of the most RCS-friendly operators are the ones with the biggest chip on their shoulders about this. What they don't realise is that Facebook integration on-handset is way more of a threat than Skype when it comes to "ownership". I reckon people would churn VoIP/IM provider (or multi-source) much more easily than social network. It's only the relatively small handful of paying SkypeOut users that's the real threat from a revenue standpoint.


Souvignet said...
This comment has been removed by the author.
Souvignet said...

I agree with the analysis.

Nokia could perfectly build an end-to-end mobile VoIP service. Moreover, Nokia already promotes VoIP applications such has Fring (Skype aggregator) or EQO for its Nokia NSeries handsets.

On the other hand, mobile operators are not so reluctant to VoIP and they discreetly test it: Movistar is reported to support the launch of a VoIP MVNO with Barablu in Spain. Orange Spain also supports Másmovil MVNO that just announced a partnership with Fring. More information in this post: http://blog.valoris.com/2009/03/02/mvnos-are-leading-the-take-off-of-mobile-voip-in-spain/

All the noise about the Nokia - Skype initiative is just communication game...

Eric V. said...

"Facebook integration on-handset is way more of a threat than Skype when it comes to "ownership"

I totally agree with your article and the above point, but I don't catch your second one:
"It's only the relatively small handful of paying SkypeOut users that's the real threat from a revenue standpoint"

The point is that there are only a handful of users because
- they have to pay for it
- its PC to mobile calls essentially, and that isn't sexy

The threat with a full blown integration into the handsets would rather be:
- Being a skype to skype call,a call from one user to another wouldn't be a SkypeOut type of thing, but a normal "free" call, with much more than a handful of interested people
- This happenning on the widest possible user base to give it some attractiveness (agreed, there is a delay for diffusion)
- And in the context of unlimited data plans being offered anyway by operators

So maybe I miss a point, but this seems much more than a far fetched threat to me?

Eric V.

Anonymous said...

What is RCS?

Thanks :-)