Telefonica Deal with Electronic Arts Shows Strategy

Telefonica Digital, the application development unit of the Spanish telco, has signed a content deal with Electronic Arts that will allow Telefonica to create application and service bundles Telefonica hopes will prove "stickier" with its customers than a strategy of relying on connectivity.

The contract allows Telefonica Digital to create promotions based around EA games including The Sims, FIFA and Monopoly, with the intention of turning the brand into a purchasing destination for any mobile customer, rather than a portal for those on the O2 network. Telefonica illustrates one way connectivity providers are looking at strategy.

Some service providers lean more towards emphasizing connectivity, while others want to embed more application content. The strategies are not mutually exclusive, but a metro Ethernet specialist, for example, will emphasize its "access" value almost exclusively. Retail telcos almost necessarily must emphasize applications.

Perhaps few telcos are as active as Telefonica in creating business units focused on content and apps, though.