tag:blogger.com,1999:blog-17500930.post8268271850353807850..comments2024-03-20T22:57:03.923+00:00Comments on Dean Bubley's Disruptive Wireless: iPhone non-exclusivity in Italy - it's all about prepaidDean Bubleyhttp://www.blogger.com/profile/05719150957239368264noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-17500930.post-11380095850948367942008-06-10T21:13:00.000+01:002008-06-10T21:13:00.000+01:00the only problem with iPhone: Internet access! In ...the only problem with iPhone: Internet access! In Italy contract for 3G unlimited access cost at least 150$/mo. <BR/><BR/>Usally charges for internet is going in 15 min session (no matter wat you do, one email check or update a tile of google map), and you can have around 50 hours/mo for cheap. i.e. 200 sessions)<BR/><BR/>I think you got the idea? 1 email check per hour, you wasted half of your internet traffic, then you starting to pay 10$ per Mb. (or 1.5$ per email chek)<BR/><BR/>Until last minute, i had a hope that IPhone will be sold in Italy with 50euro/mo unlimited internet access contract.<BR/><BR/>Expat in Milano.<BR/><BR/>P.S. Withoot Internet access, its just fashion accessory, its so italian. :(Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-357793398308656132008-05-25T01:12:00.000+01:002008-05-25T01:12:00.000+01:00Dean,I believe u are correct as regards the USA an...Dean,<BR/>I believe u are correct as regards the USA and prepay.<BR/>Over here (been UK based so know both sides of the story) in the US prepay is low-end, low features, cheap phones and poorly marketing.<BR/>"consumers" over here are just not educated in that respect and the telco's are happy getting (norm of $50/m) regular fees from 90%+ of their user base. Why change a good thing?<BR/>They have a strangle-hold on the market place and have got a wake-up call with the iPhone slapping in the face but the majority of the population are stil just all about voice calls. Uptake in SMS is sloooow starting 2 happen.<BR/>There's many reasons why the market here is 2-3 yrs behind Europe.<BR/>The call charging (u pay 4 incoming calls) is a big issue<BR/><BR/>My 2c<BR/>LalThe Lalhttps://www.blogger.com/profile/14603940704800084635noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-36772461263550707062008-05-10T15:57:00.000+01:002008-05-10T15:57:00.000+01:00While quad-play is not that popular in Europe, tri...While quad-play is not that popular in Europe, triple-play is beginning to. Mobile only players like Vodafone had to go into the broadband market as well (alone with VoIP phone line).<BR/><BR/>You may talk about kids SMS's in class or people screening calls (and SMS the less popular friends). For me, I simply don't believe that pricing is not a factor for 300 million Americans talking 700-800 minutes on a mobile phone per month vs. 400 million Europeans talking 200 minutes on a mobile phone per month.<BR/><BR/>Take away the kids and the gadget geeks, I think that the rest of the Europeans would like to talk a lot more if they can afford to.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-71408041166678387992008-05-10T09:49:00.000+01:002008-05-10T09:49:00.000+01:00All very interesting, but it only goes to describe...All very interesting, but it only goes to describe how US middle-class families buy their comms services.<BR/><BR/>But lots of underlying drivers are very different to middle-class behaviour in the UK, or Italy, or South Africa, or Japan, or Russia, or Germany and so on.<BR/><BR/>There's virtually no obvious demand for quad-play in much of Europe, for example. Much of that relates to the hsitoric preference of digital TV via satellite or free terrestrial rather than cable. (There isn't cable in much of Europe).<BR/><BR/>There are also cultural differences about the way people prefer to pay for goods & services (cash, card, direct debit, cheque etc) which impact behaviour. Sure it changes over time, but its largely unrelated to income.<BR/><BR/>Same with prepay - often tariffs are *more* expensive per-minute than contracts. Coming at prepay from the notion that it's for people who can't afford contracts is a very US-centric view. Italy *proves* it to be wrong - it's not as if 90% of the population lives in poverty!<BR/><BR/>It also comes down to how services are marketed - a quick look at Italian mobile operator websites shows that they compete based on price per minute / price per SMS rather than # of minutes per month. It doesn't look too expensive to me at first glance.<BR/><BR/>Your car example is a great one to illustrate differences in behaviour. Each country is very different for a variety of reasons - nationalism, taxation, brand perception, family size, use of public transport. Many wealthy people in London don't have cars at all, and you wouldn't have an Accord unless you were over 60yo or an illegal minicab driver.Dean Bubleyhttps://www.blogger.com/profile/05719150957239368264noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-90471078526586958142008-05-09T19:45:00.000+01:002008-05-09T19:45:00.000+01:00Some kids may like to SMS during class (i.e. can't...Some kids may like to SMS during class (i.e. can't talk on the phone during class), some people likes to screen phone calls (and like to SMS people they don't want to talk to), some people thinks that SMS is cooler than old fashion voice conversation, some countries might take years to give you a landline or have "ID registrations" if you get a phone number requirements...<BR/><BR/>I am saying that the economic "middle class" rules in the market place. If the economic "middle class" thinks that contract mobile tariff rates (and intra-EU roaming rates) are too high and they need to do prepaid/SMS/price arbitrage --- then that's the problem.<BR/><BR/>In the US, the middle class wants quad bundling --- home phone, mobile phone, broadband and tv --- so that's where the whole business model is going. The middle class also wants a reliable 4 door mid-sized sedan --- which is why the Honda Accord and the Toyota Camry rule in the US.<BR/><BR/>One unified bill per month and a couple of dollars per month in bundling discount --- that's what move the market.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-45364746083256525542008-05-09T17:43:00.000+01:002008-05-09T17:43:00.000+01:00One other thing: When people switch from prepaid t...One other thing: <BR/><BR/>When people switch from prepaid to contract, it's not because they're now earning more - it's because they can *save* money.<BR/><BR/>They realise that they've been spending £50 a month on top-ups... when they could have got a contract for £30 instead. It's just that buying 5x£10 during a month top-ups *feels* like paying less than getting a single £30 bill thruogh the post.Dean Bubleyhttps://www.blogger.com/profile/05719150957239368264noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-76363522614995906982008-05-09T17:41:00.000+01:002008-05-09T17:41:00.000+01:00Anonymous - sorry, but I have to say you're talkin...Anonymous - sorry, but I have to say you're talking nonsense mostly. <BR/><BR/>You seem to find it difficult to believe that other peoples' behaviour & preferences can vary for reasons other than economic ones. In developed markets (ie most of W Europe, bits of everywhere else), prepay is a *conscious choice* , not a forced one. <BR/><BR/>> to carry a second phone so that they can have free incoming calls<BR/><BR/>First point: all incoming calls are free, on any phone, in most of the world except the US. <BR/><BR/>Some people want a separate phone & number so that people can call them - plenty of people have highly asymmetric calling patterns (eg Pizza delivery). There's no point these people having a contract for outbound calling as they don't do any.<BR/><BR/>Second example - a classic use of prepay is someone who wants a "spare" phone for emergencies (lost/stolen phone etc).<BR/><BR/>Third: The "SMS is cheaper than voice" argument was certainly true about 10 years ago. But today most SMS use is because it's evolved to be the preferred user experience. Most teenagers don't *want* to phone each other, even if they've got 10000 minutes, it's uncool. <BR/><BR/>Many people send 100, 200 or more SMS *per day* , using it almost like IM (but subtly different to that too). That's why you get contract tariffs like 100mins + 1000 SMS.<BR/><BR/>There's a whole psychology around SMS that's developed - so for example some people would *never* phone someone to suggest going on a date - that's seen as tacky & desparate. Phone calls are for old fogeys. (As are emails). <BR/><BR/>No, my blog doesn't attract "people who do tariff arbitrage as sport", it's aimed at people in the mobile industry, not average consumers.<BR/><BR/>Your kids example again just illustrates how different the US market is from that in Europe. The concept of the "family plan" is pretty irrelevant *because* kids can get their own prepay accounts without needing bank accounts or ID.<BR/><BR/>And that's the final point - in many countries, prepay is totally anonymous. No need to register, no need for ID, no need for credit checks, just buy a SIM card over the counter, top up with cash, and you're live. It's easy - and that's why it's popular. (And yes that's also why it's popular for a minority of people who are criminals)<BR/><BR/>So parents can give their kids pocket-money as usual, and it's up to them whether they spend it one mobile top-ups or entertainment/clothing/whatever.<BR/><BR/>All that said, yes, voice tariffs in Europe are comparatively high in many cases, especially now given the current €/$ rate. But that's not the main driver for people choosing prepay.Dean Bubleyhttps://www.blogger.com/profile/05719150957239368264noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-67676195080325041352008-05-09T17:06:00.000+01:002008-05-09T17:06:00.000+01:00>>>It's not a question of affordability but flexib...>>>It's not a question of affordability but flexibility - maybe they want a new phone ever 6 months, not every 18 months. Maybe they use 3 different phones & services, with one number just for (free in Europe) incoming calls.<BR/><BR/>It is about affordability when people are using SMS instead of voice minutes because it's cheaper, or that they have to carry a second phone so that they can have free incoming calls.<BR/><BR/>It's like going to the Mercedes-Benz dealership and ask for the price --- if you have to ask, then you can't afford it.<BR/><BR/>There may be segments of European populations that likes to do tariff arbitrage as a sport --- they are the same ones that are visiting your blog (a very small population base). But if the average joe in Europe is doing it --- he is doing it because mobile tariffs are too expensive in Europe.<BR/><BR/>Vodafone, T-Mobile and Telefonica all operates in most of the countries in Europe. If an European has to avoid insane roaming charges when they travel within EU --- then Viviane Reding is right that it is Vodafone's, T-Mobile's and Telefonica's fault for the insane price.<BR/><BR/>Samething for your kid's example, Americans have kids too ---American kids don't get a second phone line because they like some other phone. Kids buy a cool subsidized phone to unlock (kids do have limited budgets) --- but they are kept within their family's mobile plan because the whole family has a pool of 2000 voice minutes to waste.<BR/><BR/>Sure there may be kids that want a second cell phone number in order to avoid their parents from knowing what they are doing. But that's a minority of the kid's population.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-62624250240093648362008-05-09T06:42:00.000+01:002008-05-09T06:42:00.000+01:00Anonymous>>The corollary to your theory is that Am...Anonymous<BR/><BR/>>>The corollary to your theory is that Americans (except the very poor) can actually be able to afford to sign up a mobile phone service contract without looking at every single cent<BR/><BR/><BR/>This is precisely the point I'm making. There are plenty of people in developed markets (UK, Italy, Spain etc) who *can* certainly afford to sign up to a contract - but choose not to. <BR/><BR/>It's not a question of affordability but flexibility - maybe they want a new phone ever 6 months, not every 18 months. Maybe they use 3 different phones & services, with one number just for (free in Europe) incoming calls. <BR/><BR/>And most importantly - maybe they travel frequently want to buy local prepaid SIMs to avoid huge roaming charges. <BR/><BR/>Another typical scenario is a kid who gets a contract phone paid for by a parent.... but who also wants their own cooler prepaid one, to SMS with their friends.<BR/><BR/>"Control their spending" doesn't always mean "Limit their spending". Quite a lot of prepaid segments have higher ARPU than some grops preferring contract.Dean Bubleyhttps://www.blogger.com/profile/05719150957239368264noreply@blogger.comtag:blogger.com,1999:blog-17500930.post-67179239267792075402008-05-08T21:58:00.000+01:002008-05-08T21:58:00.000+01:00I don't think that Americans have stigma attached ...I don't think that Americans have stigma attached to prepaid cell phones. Japan and South Korea both do have stigma attached to prepaid cell phone to criminals.<BR/><BR/>The corollary to your theory is that Americans (except the very poor) can actually be able to afford to sign up a mobile phone service contract without looking at every single cent.<BR/><BR/>AT&T's CEO almost single-handedly crashed the US stock market in January 2008 when he talked about AT&T facing some softness consumer business. It took a big blow up in subprime, housing and the collapse of Bears Stearns --- to force Americans to think about phone service prices.<BR/><BR/>If Europeans have to "control their spending" or play tariff arbitrage --- then it is a symptom that their mobile tariff is too expensive to begin with DURING THE GOOD ECONOMIC TIMES.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17500930.post-67786233311377468332008-05-08T13:38:00.000+01:002008-05-08T13:38:00.000+01:00there's a luxury goods tax on contracts in Italy, ...there's a luxury goods tax on contracts in Italy, which explains even moreAnonymousnoreply@blogger.com