Showing posts with label Telefonica. Show all posts
Showing posts with label Telefonica. Show all posts

Tuesday, November 8, 2011

Amex Launches $100 Million VC Fund

On the heels of the creation of a venture capital fund by France Telecom and Publicis, and Telefonica's recent restructuring that created a new digital business unit, American Express has also created a $100 million fund to “identify and develop innovative technologies that will help accelerate the company’s digital transformation.” 


The company, which was founded in 1849, is now establishing a Silicon Valley office to stay on top of the latest developments in mobile and finance technologies. 


The new office and fund will be led by Harshul Sanghi, the former head of Motorola Mobility Ventures. Amex launches VC fund All of those initiatives point to the growing strategic importance of mobile, mobile commerce, payment, mobile wallet and mobile content and transaction applications and services. 


France Telecom and Publicis SA are setting up a venture-capital fund focused on European technology startups. Initially capitalized at about $139 million (100 million euros), the companies will seek additional investors to raise a fund of perhaps 300 million euros ($411.5 million). 

As you might guess, the sorts of companies that might receive funding are of interest to both a mobile service provider and an advertising firm.

Likely sectors include online marketing, e-commerce, mobile content and services, online gaming and social networks, as well as their associated technologies and infrastructures such as middleware, cloud computing, security, and online payments. Likely investment areas

The venture, and the likely investment themes, illustrate the perceived importance of mobile advertising to both France Telecom and Publicis. 

According to Ofcom, the U.K. communications regulator, over the last decade, average monthly household spend on communications has increased by just 12.8 percent in real terms, to £93.10 (£83.01 in 2000) and has fallen consistently year on year since 2005 (£106.50).

Total operator-reported telecoms revenues fell by two percent in 2010. Retail revenues from mobile services increased slightly (up one percent, having fallen for the first time in 2009), but those from fixed voice and fixed Internet services continued to decline, down by three percent and six percent respectively.

Total annual communications industry revenue in 2010 was £53.4 billion. On an inflation-adjusted basis, industry revenues were £54.3 billion in 2000. Read more from Ofcom here.

BT’s share of voice call volumes fell to under 20 percent during 2010. BT’s share of total fixed and mobile voice call volumes fell to 19.4 percent in 2010. BT’s share of fixed voice call volumes also fell to under 40% for the first time during the year. 

In that regard, the most-significant action by a tier-one provider in the past several weeks has been the application by Rogers Communications to become a bank under the Canadian federal Bank Act. If approved, the proposed "Rogers Bank" will focus mainly on credit, payment and charge card services. There is an obvious relevance for Rogers as a provider of mobile payments, but that might not be the immediate application. Banking, advertising, M2M

Some of you should have the logical reaction of “I thought telecom companies were in the communications business?” And that would be a good question. But some might have wondered why telcos were in the video entertainment or advertising businesses as well, and both those businesses now are seen as logical for large telcos. 

It might now be more accurate to say that telecom companies are in a growing variety of businesses that use networks. Rogers to become a bank.

The move by Rogers is highly significant, as it illustrates an important point about where large tier-one providers must look for revenue growth. For an organization such as Rogers, which might book $12 billion in 2011 revenue, even interesting new lines of business that produce scores of millions to hundreds of millions worth of new revenue are too small to "move the needle" overall.

The problem is even worse for organizations such as AT&T or Verizon that book $30 billion to $40 billion a year in revenue. Simply put, there are few realistic new lines of business large enough to matter. That is why you hear so much about machine-to-machine communications, mobile advertising, mobile banking and enterprise-oriented cloud services. Each of those businesses could, in principle, produce $1 billion a year in incremental revenue for any single contestant in a national market.

Keep in mind the scale requirements. A business has to be big enough to produce $1 billion in incremental revenue for each contestant that wishes to compete in the business. By definition, any new line of business must be capable of generating global revenue in the scores of billions of dollars.

To repeat, Rogers will become a bank. It will do so because "banking" is a business big enough to be interesting, and Rogers has customer and other assets that will help it compete. 

There is another important observation, however. Many service providers are looking at ways to build a mobile payments or mobile wallet or mobile commerce business in some way. Rogers seems to be signaling that even "mobile payments," with a transaction revenue stream, might not produce enough incremental revenue to be interesting. In other words, a percentage of a transaction fee shared with other issuing banks might not produce enough revenue to be worth the effort. Rogers is signaling that it has to capture the full transaction fee, and cannot afford to share that fee with other issuing banks with which it might partner. 

At some point, even Isis might have to consider whether it must become a bank, or that its partners separately might have to become banks. That would still leave them as partners with Visa and MasterCard. The point is that the payments ecosystem might not be robust enough to "feed more mouths." Though it might be strategically wise to contemplate a "partner" approach rather than a "displacement" approach, telcos might not ultimately have a choice. 

Telcos might have to displace one or more participants in the payments business, rather than adding one more link in the chain, to create an attractive, or at least reasonable, revenue stream. 

Many service providers outside the United States probably are "running the numbers" and coming to similar conclusions. "Why does Rogers want to be a bank?" is a good question. The fact that it is a serious, practical question tells you quite a lot about where telecom is headed.

Wednesday, July 14, 2010

Mobile App Stores Shorten Time to Market and Time to Payment


Mobile app stores have shortened "time to market" for mobile apps, especially compared to older distribution methods such as placement directly on mobile phones.

Mobile app stores also mean developers get paid faster, according to Telefonica.

Monday, January 7, 2008

at&t, Telefonica Eyeing Targets?

Apparently, at&t wants to buy a stake in the mobile arm of state-controlled phone firm Telekom Malaysia , a Malaysian newspaper has reported.

Telekom Malaysia is spinning off its mobile business into a separately listed firm, TM International, which will include its domestic Celcom unit and operations in nine other countries, including India, Indonesia, Bangladesh and Sri Lanka.

Separately, there is talk of Vodafone or Best Buy buying Carphone Warehouse. There also are rumors that KPN is being eyed by Telefonica (KPN denies talks are underway).

Given the success Western European mobile providers are having in Eastern Europe and elsewhere, we might make one observation: though wireless has underpinned carrier revenue growth over the past several years, internal growth now is slowing sharply, meaning growth will have to be sought "out of territory."

Typically, when that sort of situation develops, it is a clear sign that internal growth prospects are limited.

Tuesday, November 6, 2007

Android Creates Instant Developer Community


One of the big problems a communications service provider faces is how to leverage the creativity of the Web and apps community to drive service innovation which carriers frankly are ill equipped to undertake. Android basically solves that problem. Developers respond to big opportunities and that is what Android now represents: a chance to develop apps for mobile operators representing 40-some-odd percent of the U.S. mobile population, virtually all of China, one of the fastest-growing global markets, plus the two dominant providers in the trendy Japanese market plus Spain, Germany and Italy, just for starters.

That's an instant and massive developer community at a time when every major communications service provider needs such a developer community allied to it. Google may well disrupt. It also is going to help carriers move ahead on the innovation front in a way impossible on their own.

To the extent that most innovations and applications are going to come from the independent developer community--not from the carriers--this is a very big deal indeed.

That isn't to underplay the role played by developers working for Microsoft or Symbian, either. It's just that leveraging the Linux community adds even more intellectual capital, and capital that heretofore hadn't been deployed to enrich mobile Web apps.

Google Issues: att and Verizon


Google hopes to do to the mobile market what it has helped do to the traditional Internet: bring people closer to content. At an important level, that means Web apps surfing on a mobile should have a consistent, if not identical experience, as the same operation on a notebook or desktop PC.

In that regard, Google is engaged in a genuine coopetition: it needs legacy carriers as partners even as it competes with them. And every potential partner knows that what is good for Google might not be good for anybody else.

Google already has jumpstarted its effort in a big way, picking up China Telecom, NTT and KDDI, plus Sprint and T-Mobile in the U.S. market, T-Mobile Deutschland, Telefonica in Spain and Telecom Italia right at the gate. That gives Google carrier agreements Apple and Microsoft never got that fast. And Google's operating system and platform now are global from the get-go.

That means the carrier blockade is broken. Verizon and at&t might or might not join up with the Android effort. But they no longer can stop it.

Of course, Google will proceed on multiple fronts. It won't get where it wants by forcing everybody to use Android. So it will work with carriers when it can, or work around them if it has to. From a stategic perspective, Google wants its apps and experiences on every device, if possible, with or without Android.

Which means some accommodation with at&t and Verizon is possible, indeed likely, at some point. If Android gets traction at Sprint and T-Mobile, not to mention elsewhere, neither of the two largest providers will want to be frozen out of the action.

And that will be true even if Google ultimately emerges as part of a bidding group, perhaps even a winning group, in the 700 MHz spectrum. There are lots of stakeholders who gain if a robust mobile Web experience can be created. Not the least of which are firmware, chip and software providers from the legacy PC space (Microsoft being the salient exception, as it already is a major and growing mobile OS and application provider.

We should preclude nothing at this point, in terms of Google becoming an owner, at least in part, of a major broadband network; producing its own branded devices; getting "top of the deck" exposure on other devices and operating systems or other as-yet-to-be-developed ways.

Google is determined to be a force in mobile and it has lots of ways to proceed, simultaneously. If its gets what it wants, it won't need its own network, devices or apps. Others will do those things. If Google doesn't get what it wants from others, then it will have to consider creating those capabilities itself. Either way, Google in the game for good.

The only unfolding issue is how a complex set of relationships unfolds. Those who want Google to disrupt less will find that their own actions can help tip Google one way or the other. The same holds true for those who might want Google to disrupt more. If they are willing to commit their own capital, they can nudge Google in that direction.

And keep in mind: major technological innovations tend to achieve less in the near term than most think, but far more in the long term than observers expect.

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

Modern computing has some virtually-universal reference metrics. For Gemini 1.5 and other large language models, tokens are a basic measure...