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Thursday, May 17, 2007

Will mobile social networking drive churn rates up?

There's a huge amount of interest in mobilising the various social networking services - MySpace, Facebook, Flickr and so on. Operators are partnering left, right and centre.

But I wonder.... do people have more loyalty to their mobile operator, or to their preferred social networking brands? I think it's the latter, because of the impact of the rest of the user's social group. I can make a unilateral, personal, decision to switch from O2 to Vodafone. But I'm not going to be able to convince my entire social network to switch from Facebook to MySpace.

So, I'm more likely to switch operators to get my choice of Web 2.0 brand. Which sounds good on the face of it, but ignores an important factor:

Social networks' coolness varies over time. People switch allegiance from Bebo to MySpace or whatever is more "exclusive". People belong to multiple networks. It's a bit like real-life social scenes - the bars & restaurants that are ultrahot this month, are full of Z-list celebrities next month, and full of clueless tourists the month after that. The A-list has moved on. And from an online mobile/social networking point of view, these A-listers are the 'hubs', the most popular people. Their friends follow them.

So just because MySpace is popular right now, doesn't mean it will be next year when a mobile operator's contracts come up for renewal. People may desert their current operator in droves if their coolest friends are now using a service which partners with another carrier. In other words, the risk of mobile social networking is that it might induce "group churn".

(Caveat: this is a very metropolitan/London-centric view of socialising, where there is sufficient fluidity in networks of friends - or openings of cool new bars & restaurants - to make us fickle. In smaller towns people have more fixed friendships, and go to the same local pub all their life, so for these cases loyalty may be more easily achieved)


OIM said...

That's a very good point. If I were an operator I wouldn't partner with a specific social network. Instead, I'd rather be open to support as many as possible.

Anonymous said...

I totally agree with oim. This is a dangerous mechanic for the MNO. I see that there are two main models:

1. A bridge to all the social networks from inside the carriers WAP deck or from the phone (if they insist on pushing the handset manufacturers to do it).

2. They develop their own social networks.

They are all looking at point two and doing point one to some degree. Trouble is on point 2, the MNO's are very bad at lifestyle services, I mean do Vodafone actually think they are a brand ?!? I suspect that the great unwashed see them as a utility and have no loyalty.

The third way (there has to be one) is through the handset manufacturers, Nokia etc have been gathering strength again and starting to pack the handset with solical network style services.

The whole thing may well just be a fad of course, once the user gets to realise that their 2.5G (for there aren't many 3G phones) phone takes ages to upload, download and browse video clips and even images, they may only use it a few times, then resort back to casual mobile grazing.

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Anonymous said...

oim, think about it from the social network companys point of view: if (For example) Yodafone already has a deal with Spacebook, how interested would rival MyFace be in securing an agreement?

Martin said...

Hi Dean,

So maybe over time those Web 2.0 lifestyle sites will be the most successful who do not only partner with certain MNO's but also offer a mobile friendly interface themselves to allow multi MNO communities per country.

With 2 year contracts it's almost impossible that all members of a community can switch at the same time. But with an MNO without a walled garden and a Web 2.0 service with it's own mobile frontend, no problem...

And people might just be willing to go the extra mile to get back to their community. That might even be enough encouragement to download that Java applet or type in the URL before bookmarking it rather than to get help from an MNO who wants something in return (e.g. 2 year contract...).


Anonymous said...

Do you think in some way, the MNOs and all telcos for that matter have forgotten what business they are in?

Historically they have been in the business of connecting people. Now they are in the business of operating networks. The value to the end user comes from what they do with the network, i.e. some bits are more valuable than others.

Social netowrks are now replacing them somewhat in the value chain, pushing them down into mere dumb pipe operators and this is what you are suggesting they become, providing access to all, and running their network more efficiently than others, to generate the best returns.

On the other hand, could a rebrand of an entire telco to a social network be out of the question? That is in effect what they are anyway. i.e. recombine the value of services rendered and price paid for said services, whether by user or by advertiser.

Anonymous said...

social networks replacing telcos? which planet are YOU on buddy? i wanna visit because it sounds crazy.

Anonymous said...

I could soooo see mobile socail networks taking over. places like myspace are facebook are fads. one thing about mobile social networks that make them different form places like myspace is the cell phone. one thing that has never chaned but grown is the popularity of the cellphone. places like peekamo are only gonna grow because the features are not stupid but valid ways of communication.