VirginMobile in Upbeat Media Profile

Though it's tiny, USAToday presents a mostly upbeat profile of VirginMobile, which recently bought Helio's business for roughly $39 million in equity. The company has some innovative marketing and retention programs and is focused squarely on the youth market.

Here's an interesting tidbit in the USAToday piece about the company's ad subsidized minutes/texts program "SugarMama":

Its "Sugar Mama" service, aimed at fusing ads into the mobile experience, rewards customers — with wireless minutes — for watching ads. So far, about 750,000 customers have signed up, earning 23 million minutes overall. (Customers are limited to 75 free minutes a month.)

Blyk in the UK reports phenomenal success with its program, which is more central to the overall value proposition.

Report: Korea's SK Telecom to Invest in Sprint

Reuters and others are reporting that Korea's SK Telecom, one of the two partners in the now defunct Helio MVNO (acquired last month by VirginMobile), is going to make another run at the U.S. market with a potential strategic investment in Sprint. Some outlets had reported that SK Telecom was seeking to acquire Spint outright; however, that outcome is highly unlikely.

Alternatively, the discussions could be exclusively about technology collaboration.

Sprint, the number three U.S. carrier (52 million subs) lost just over a million subscribers in Q1, but has said sales of "iPhone Killer" Samung Instinct have exceed expectations.


The Guardian UK is reporting that SK Telecom has denied that it's interested in a "controlling stake" in any U.S. carrier. That doesn't preclude an investment of some sort however.

UK's Yell Introduces Mobile Maps Application

Built with mobilePeople, Yell has introduced a mobile mapping and local search application:

Yell Maps 1

Yell Maps 2

From the press release: mobile maps, a downloadable application that offers a range of market-leading product features, enables consumers to locate any address in the UK, get walking or driving directions displayed right on the map, and search for any of the 2.3m businesses available on

Features unique to mobile maps offer consumers the ability to save business names, addresses and phone numbers directly to the phone's contact list and also to share this information with others via text messaging – ideal, for instance, when organising a night out. People can also contact businesses directly from the application with a simple click to call.

Walking directions is a nice feature. Yell also offers a more "traditional" WAP-based search tool. According to Nielsen Mobile, the UK is second to the US in terms of mobile Internet usage:

Mobile Internet penetration

Will Blackberry Steal the iPhone's Thunder?

Many handsets have claimed to be the iPhone killer. None have come close to living up to that label. However, the forthcoming all-touch-screen Blackberry Thunder, while not an "iPhone Killer," could provide the first truly viable alternative to the iPhone for loyal Blackberry fans.

Here are some screenshots, which make the device look impressive. What will increasingly separate the iPhone from its competitors, however, is the universe of software developers bringing rich, "native" applications to the device. Blackberry is aware of this and has launched its own fund to encourage software development.

However, as the leading U.S. smartphone many developers bring out Blackberry apps first (e.g., Google Maps with voice) to gain the broadest distribution they can as quickly as they can.


Related: Does O2's UK experience suggest massive "pent up" demand for the iPhone for next week's US launch? There also appears to be real traction for the iPhone in the enterprise, which is a market share threat to RIM.

Virgin Confirms Helio Buy

In the end there are likely to be four carriers in the U.S. market that matter. Will Virgin be one of them? For the time being Virgin has decided in incrementally increase its share with the anticipated purchase of stuggling MVNO Helio.

According to the press release the terms and value of the deal are as follows:

  • Additional strategic investment totaling $50 million made by Virgin Group and SK Telecom at $8.50 per share
  • Improved capital structure through increased liquidity and $50 million paydown of senior secured credit facility
  • Incremental $60 million added to revolving credit facility - Maximum assumption of $10 million debt and $15 million net working capital liabilities - Net debt reduction of approximately $35 million upon closing
  • Approximately 170,000 Helio customers with approximately $80 ARPU
  • Entry into postpaid segment through acquisition of highly sophisticated customer platform supporting unique user applications
  • Improved network rates and ability to realize significant operational synergies

It's important to note that Virgin gets only 170K subscribers from this acquisition for a total of $39 million (in equity).

Blyk Making Move into Europe

Fresh off it's apparent success in the UK, ad-subsidized MVNO Blyk is moving into other Western European countries, including Germany, Spain, Belgium and The Netherlands. It will have different network partners in many of these countries but the model remains the same: users receive 217 free SMS messages and 43 free minutes in exchange for viewing ads.

The company explicitly describes itself as "the new mobile network for 16-24 year olds." Indeed, it's positioning itself vis-a-vis advertisers more like Facebook than a mobile operator. It also claims 29% response rates to campaigns on average.

A particular MMS campaign for L'Oreal (aimed at males) saw 40% and higher response rates (massive). Blyk subscribers seem very willing to receive and respond to ads accordingly. The company's success would thus seem to put to rest the concept that people (at least budget-conscious younger users) are resistant to mobile advertising.

Report: Virgin to Buy Helio

As expected, the Financial Times is reporting that Virgin Mobile USA will acquire struggling MVNO Helio (both are actually):
Virgin Mobile USA is to acquire the US mobile phone operation controlled by SK Telecom of South Korea, after each side decided to combine their struggling businesses to build scale in the fast-maturing market.

One person with knowledge of the matter said that the sides had agreed a deal in principle and that an announcement could be made as early as this week.

SK Telecom yesterday declined to comment.

The agreement will see Helio, the US mobile business of SK Telecom, injected into Virgin Mobile USA. The better-recognised Virgin brand will be retained.

In return, Virgin Mobile, which listed in New York last October, will issue new shares, leaving SK Telecom holding close to 20 per cent of the equity of the enlarged business, which will be worth about $50m.
Accordingly, the Helio brand will disappear.

Nokia Acquires Social Network Plazes

Nokia has purchased Plazes, a social networking provider based in Berlin. From the release:

Plazes provides a context-aware social-activity service that people can use to plan, record, and share their social activities: why they are at a given location at a given time, whether in the past, present or future.

By acquiring Plazes, Nokia will be able to extend its context-based service offering with social presence and time-based activity planning features. Plazes adds the elements of "place" and "time" to social networking through features that allow people to alert friends of their activity and location; review their own and others' past activities; share their experiences and make plans with friends, who are then able to respond with comments and suggestions as well as their own location information.

With Plazes, location can be managed on the desktop or via a mobile device. But this is not just about mobile but about the Ovi portal and the desktop. The acquistion is part of Nokia's move to transcend its OEM status and become an "Internet company." Indeed, Nokia has a growing portfolio of acquisitions, most notably including Navteq and Enpocket.

To be competitive longer term, social networks will need to have both a desktop and a mobile presence.


Here's more on the acquisition from the Plazes blog.

Who Uses the Mobile Internet?

Mobile browser Opera released another round of data on global mobile Internet usage. The high level findings are as follows:

  • In the ten countries examined, male users of Opera Mini greatly outnumber female users. The biggest difference in usage between males and females is in India, where 97.2% of people using Opera Mini to browse the Web are males. The smallest difference is in South Africa, where 1 out of 4 people using Opera Mini are females.
  • Browsing the Web on handsets using Opera Mini is most popular amongst the 18-27 year old demographic, but there is some interesting variation between countries. For example, 3 out of 10 Opera Mini users in the Ukraine are under 18 years old. Globally, 13.4% of Opera Mini users are under 18 years of age, 64.5% are 18-27 years of age, 16.7% are 28-37 years of age, 4.4% are 38-47 years of age, and 1% is more than 48 years of age

Here are the top 10 sites in the U.S. (unique users):


Usage is skewed 80-20 in favor of males. 73% of users are between 18-37.

Here are the top 10 sites in the U.K. (unique users):


Here males represent 83% of Opera users, and roughly 72% fall within the 18-37 age range.

The high proportion of male users (vs. females) of the mobile Internet explains to some degree the high proportion of pornographic content being consumed. But as women buy more smartphones they'll begin to catch up to men in mobile Internet usage and other content categories will rise.

Online, women slightly outnumber men and they're a more important commercial audience than men for several reasons. According to U.S. government sources and the AFL-CIO, women are directly or indirectly responsible for 83% of all purchasing decisions.

Yahoo!'s Potential Mobile Reach: 600 Million

Yahoo! said today that its 60 mobile partnerships give it a potential global reach of 600 million subscribers. To put that number in perspective, it's double the U.S. population and just over 80% of the population of Europe. And while no one really knows what the exact global figure is, consensus estimates put mobile subscribers at 3 billion worldwide. That means that Yahoo theoretically can reach one fifth of the world's addressable mobile market.

Impressive scale but the ad infrastructure isn't yet there to reach that potential audience.

Nike's Innovative EU MMS Campaign

Nike is launching a very innovative campaign across Europe that prompts users to take photos of brightly colored images, send (MMS) them to Nike and be able to buy shoes featuring the two main colors in the image. It will be likely be a big success.

It targets the youthful audience that represents Nike's demographic and it will create tremendous buzz for the brand. Right now much of mobile advertising is about PR for the brand rather than actual results from the campaign.

Nike shoe

MMS address

U.K. Study: Price Matters (to Younger Users)

Again and again we encounter the same thing: mobile Internet demand is there but price is a barrier to adoption especially among younger users. This new data (via MediaPost) corroborates that principle:

A study by the U.K.-based Mobixell Networks, an mobile advertising network, says 35% of 16- to-35-year-olds would use more ad-funded multimedia messaging services (MMS) if those services were offered for free or at a discount. Twenty-nine percent also say they would use more video services if offered for free or at a discount.

Mobixell also reports that all age groups for mobile-phone users had positive reactions in using ad-sponsored content in video services.

The study was conducted among 832 mobile phone subscribers in the U.K.

The problem is that the Internet has conditioned everyone to expect everything for free and to be ad-supported. Thus there's resistance to subscription models for content and even services beyond a baseline.

Mobile Social Networks: Si or No?

Given their popularity on the desktop, it would seem there's an inevitability about social networking on mobile devices. Data aggregator Emarketer opines about the opportunity today in its newsletter promoting a new report:

LMS has its own point of view and a forthcoming document as well.

There are three categories of companies in this "mobile social networking" segment: mobile extensions of desktop social networks (e.g., MySpace, Facebook, Bebo), mobile specific networks (e.g., Loopt, Brightkite, BuzzD, Whrrl, etc.) and then a range of mobile offerings and applications that include social elements like sharing or friend finders and so on (Yahoo!'s Go,, ShoZu, 800-Call-411, etc.).

We just pulled consumer survey data (survey conducted by Multiplied Media) from the market that shows almost 90% of mobile phone users in North America have not and do not access social networks on their mobile devices. This of course is something of a microcosm of the larger question about mobile Internet access itself. But the two primary reasons that people offered for why they didn't access mobile-social networks were: no interest/need or no mobile data plan.

Mobile social networks or social media applications designed for mobile will grow over time and offer great utility to mobile users -- in fact, sharing and social features will be embedded in most mobile applications. But the monetization opportunity is not special or mysterious; it's primarily about page views (as on the desktop networks). It's basically about CPM or display ad revenue in mobile (for WAP-based sites). So as mobile Internet usage grows and more people get data plans, social networking traffic on mobile devices should grow too.

But the more interesting question is perhaps who will win and who will lose in this already very noisy space. The following is a partial list of companies in the segment presented in an earlier post:

  • Whrrl
  • Loopt
  • Twitter
  • Ribbit
  • Jaiku, Zingku, Dodgeball (Google)
  • Friendstribe
  • JuiceCaster
  • Rabble
  • Moblabber
  • Wadja
  • Treemo
  • Veeker
  • Zemble
  • Socialight
  • Hobnobster
  • Flagr
  • Rabble
  • ShoZu
  • Zyb
  • Aka-Aki
  • Imity
  • MeetMoi
  • MobiLuck
  • Mosio

This is only a partial list and doesn't include most of the desktop networks (save Twitter), which have an inherent advantage in mobile because of their installed user bases and greater awareness.


Related: Here's Nielsen Mobile data on mobile social networking for the U.S. and Europe (% of users accessing "social networks" on mobile phones):

  • United States 1.6%
  • United Kingdom 1.7%
  • Italy 0.6%
  • Spain 0.8%
  • France 0.6%
  • Germany 0.2%

Source: Nielsen Mobile (Q1, 2008)

Truvo Launches Mobile Client with mobilePeople

Belgium-based yellow pages publisher Truvo has launched a downloadable mobile, local search client (for Beligians) on the mobilePeople "liquid platform." The relationship was pre-existing and a similar announcement had been made last year.

What's also interesting here, as the release points out, is that Truvo, the old World Directories, is adding third-party content to directory listings to broaden the utility and use cases for the application.

Europe is a somewhat different market than the U.S. but the mobile arena replicates the early debate and competition between directories and search engines: can they win with a destination strategy or do they need to do "mobile SEO" and syndicate content? They not mutually exclusive strategies of course.

The rich client strategy also begs the question about whether consumers will download applications onto mobile devices en masse. On so-called feature phones applications may be more viable long term because they have limited capacity to browse the "mobile Internet" compared with smartphones. However, mobilePeople can also do and does WAP sites and portals.

Recently mobilePeople agreed to be acquired by partner Local Matters.

iPhone Previews Future Sales Strategy

Apple is going to start formally selling the iPhone in Italy through two carriers: Telecom Italia and Vodafone. It marks a strategy shift for Apple, which had previously pursued exclusive carrier deals with a corresponding demand for a piece of subscriber revenues. (Although European law requires Apple to sell the phone more broadly.)

This was a greedy and short-sighted strategy on Apple's part. Now the company appears to be recognizing that the task at hand is to get the device into as many hands as possible before more viable competitors emerge.

Even though demand for the iPhone has been very strong, wide availability through multiple carriers would boost sales considerably -- at least in the US. A 3G version is expected in June of this year.

Kooaba: Another 'Point and Click' Company

I was speaking with mobile ad network AdMob yesterday and, among other things, we discussed how mobile offers an interesting bridge between the traditional media and digital worlds. Though not "mobile advertising," one of the really interesting potentially areas for mobile is as both a tracking mechanism for traditional media and also a way to make it more "dynamic."

Examples of this are NearbyNow and outdoor, RippleTV and SMS, Hearst magazines and ShopText, Google print and 2D barcodes. Mobile couponing also falls into this category to some degree. Then there are: NeoMedia, Mobot, GeoVector and SnapTell that offer "point and search" or "mobile visual search" using camera phones.

And I just became aware also of another company in this segment: Switzerland-based Kooaba.

While these technologies are in use today in Japan and to some degree in Europe they will also come to the U.S/ in a bigger way. It's inevitable. But they will be used, at least initially, not as stand-alone alternatives to keying in search queries but rather to make traditional media more "accountable" and "actionable" (e.g., learn more, buy now, etc.).

HTC Replaces 'Touch' with 'Diamond'

Taiwan's HTC officially announced a replacement for the popular HTC Touch, called the "Touch Diamond." As the name suggests, the phone has a touch screen and runs the Windows Mobile OS. HTC is also a member of the Android Open Handset Alliance and is expected to introduce an Android phone later this year.

The Touch Diamond will be available in June in the EU and somewhat later in the U.S. The Touch sold impressively around the world (3 million units) and this phone looks to be a significant upgrade. It appears to have a slide out keyboard as well.

HTC Touch Diamond

Credit: HTC

Phones such as the Touch Diamond and the Samsung Instinct seek to emulate the touch-screen interface and user experience of the iPhone to varying degrees, although HTC built touch screens long before Apple brought its iPhone to market. Still, the arrival of the iPhone has helped boost HTC's visibility and shift the market toward touch screens.

Phones such as the Instinct and Diamond start to close the aesthetic and usability gap between the iPhone and its competitors somewhat. They also offer physical QWERTY keyboards, which gives them an advantage in some people's minds over the iPhone's virtual keyboard.

Vodafone to Sell iPhone in 10 Global Markets

Vodafone is going to carry the iPhone into 10 of its markets worldwide: Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey.

This is good for Apple and ironic for Vodafone given that Vodafone Deutschland sued T-Mobile challenging its right to be the exclusive seller of the iPhone in Germany. Simultaneously Vodafone CEO Arun Sarin criticized the iPhone as a “pretty poor experience.”

The Vodafone CEO must have been feeling grumpy when he lost out to Telefonica’s 02 to be the exclusive UK distributor of the device and to T-Mobile in Germany. I would imagine he is probably happy now and has accordingly changed his mind about the device and its usability, with this new deal.


The 3G iPhone looks to be coming on June 15 or thereabouts.

What Will Happen to Sprint?

Various sources are reporting (e.g., WSJ, reg. required) that Sprint may jettison Nextel in order to make itself more attractive for its own potential merger or acquisition (possibly with Deutsche Telekom).

Sprint, the number three U.S. carrier, continues to lose subscribers as rivals AT&T and Verizon grow. A combined T-Mobile and Sprint would become the largest U.S. carrier in terms of subscriber numbers but what's to guarantee that such a merger wouldn't be disaster redux. The Sprint-Nextel merger has emerged as one of the most spectacular failures in corporate merger history.

Yet given the negative trends at Sprint vs. its rivals the company is almost compelled to do some sort of deal to regain momentum.

Mobile TV Showing Some Traction in Europe

I continue to be bearish on mobile TV in the US: the price + poor experience = limited demand. In Asia it's a different story but there you have a more advanced infrastructure, phones and, perhaps most importantly, different cultures. But the NY Times reports that mobile TV has some adherents and viewers in Europe:

Every day in Switzerland, 40,000 people watch a 100-second television news broadcast on their cellphones. In Italy, a million people pay as much as 19 euros each ($29) a month to watch up to a dozen mobile TV channels.

Japan is the leader in direct mobile television, with 20 million cellphones equipped with TV receivers, followed by South Korea with 8.2 million, according to In-Stat, a research and consulting firm in Scottsdale, Ariz. In-Stat estimated that there were 29.7 million mobile TV viewers worldwide at the end of 2007. That is expected to almost double, to 56.9 million, at the end of 2008, driven by growth in Japan.

Italy has been an early leader in Europe, with service beginning in 2006. The largest mobile TV broadcaster on the Continent is 3 Italia, a cellular operator owned by Hutchison Whampoa of Hong Kong, with 800,000 customers, about 10 percent of its total phone clients. The million Italian viewers watch up to a dozen channels.

Swisscom offers a 20-channel viewing lineup, which costs 13 Swiss francs ($12.50) a month.

In order for mobile TV to happen on any kind of scale in the US, you need the following to come together:

  • Better phones with resolution equal to video iPods
  • Pricing that is bundled as part of a high-end subscription package (or entirely ad-supported a la conventional broadcast TV)
  • Streaming/transmission that doesn't stutter or get continuously interrupted

Even with all these things, Americans will have limited appetite for full-length content. Instead, clips and short-form video will prevail.


Related: Wired offers a review of AT&T's new mobile TV (MediaFLO).