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back to article Silicon Valley's assault on Mobile's Gated Kingdom

The Gated Kingdom guarded by the mobile industry is the last great frontier for Silicon Valley to crack. These vast, vertically integrated companies handle much of our communication – and they make pots of money. But standards are set by closed-door cabals of equipment vendors and operators and move at glacial pace, locking out …

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Silver badge
FAIL

What is the point of TextFree?

An app that allows you to send free text messages to other users but cost the recipient if they aren't users, I don't see the point. Most (maybe all?) UK smartphone contracts come bundled with unlimited SMS. Reading a review of TextFree on the iPhone it doesn't have access to your contacts and it can't notify you of new messages unless you have the app running all the time. Why would I want to use such a crippled text messaging app when I could just use the SMS that is built into my phone?

Maybe I just don't get it because I'm not a teenager.

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Bronze badge

Re: What is the point of TextFree?

Dunno what the point is but you've gone and checked it out now - I guess some of the traffic generated will result in actual sign-ups though so they won't be at all upset to have had a significant mention.

It may make more sense in the US - do they bundle unlimited SMS?

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Go

Re: What is the point of TextFree?

Maybe you don't get it because you have unlimited free texts? What's you've said is a little akin to saying that you don't understand people in the third world walking five miles to a well, because you have potable water piped to your home.

I pay £10 a month PAYG for my phone with 300 texts/month, so such a service is useful to me. As a result, I found the article to be very interesting, and it will spur some further research on my behalf.

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Re: What is the point of TextFree?

My understanding is that in the US especially, people still pay for their SMS messages and pay to receive calls rather than all the fees being paid by the initiator of the call, adds a whole new level of annoyance to cold calling.

You're right that those apps make zero sense in the UK, but they do make sense else where.

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Re: What is the point of TextFree?

TextFree, just like this article, are ludicrously US centric. Most countries went with GSM, and already have almost free texting.

It is only the US that don't have cheap texting; a direct consequence of their failure to include texting as part of their original cellphone specs meant it didn't take off over there.

Texting is also huge in emerging markets, but users there are more likely to use SMS/MMS as a cheaper option to using data.

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Anonymous Coward

Re: Re: What is the point of TextFree?

"My understanding is that in the US especially, people still pay for their SMS messages and pay to receive calls rather than all the fees being paid by the initiator of the call, adds a whole new level of annoyance to cold calling."

You have to understand something about how cellular works in the US. Due to number portability, there is no way you can know a priori if a number is a cellular number or not: there's no special area code or exchange. In fact, I can have a wireline phone number and move that to a cellular line. As a result, the idea of "caller pays" for cellular is difficult, as you could get bit by calling a perfectly innocent number - indeed, that very number might have been a land line (thus free) last week and now is a cell.

Now, as for they way SMS works - well, that's just plain greed, and I agree the UK method (sender pays) is better. Indeed, the reason I have SMS totally blocked on my cell is that I refuse to have to go through the BS to remove spim charges, and I refuse to pay ANYTHING for "unlimited" SMS, but if things were as they are in the UK, I might very well have SMS since I decide when I will incur a charge.

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Re: What is the point of TextFree?

No, I really don't have to understand that.

Presumably, at some point, someone knows whether it is a cellular phone or not. At that point, the telephone call can be interrupted and a voice comes on and says "This is a cellular number. You will be charged to make this call at your cellular rate. Please hang up to avoid a charge".

Not hard, was it?

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Anonymous Coward

Data only

Mobile networks should just give up now and become data providers. Just like cable companies should do.

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(Written by Reg staff) Bronze badge

Re: Data only

Cable company ARPUs and profits suggest this would be very silly. Do you have a solid reason why they should listen to your advice?

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Anonymous Coward

Re: Re: Data only

The internet is taking over everything. I dont have a sky subscription anymore. With 4od and iplayer and other online streaming services i can get all the tv that i want. I hardly make voice calls on my phone. Skype seems to work better for me. I use whatsapp for text. All i want is data. And i would bet there are lot more people out there like me. Its going to be a long strugle for mobile companies and cable companies.

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(Written by Reg staff) Bronze badge

Re: Re: Re: Data only

"The internet is taking over everything. "

That doesn't mean anything.

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Re: Re: Data only

Some will be set up and their costs will be *much* lower. Suits like that.

Some exist already. Give them time...

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Anonymous Coward

Huh?

“The traditional vendors are dying. Their multi-year cycle times are hopelessly mismatched to the environment. In their place, a raft of 'internet-time' startups are taking their place, filling in the missing features that decades of neglect of the voice and messaging business have left behind,” writes Geddes.

“You mean I still can’t record and search my calls in 2012? Wow!”

-=-

The 'traditional' vendors have this thing called making a profit. Something two guys in a garage don't.

Try adding a feature to a mature product set. You'd have to write up a business case, detailing the innovation, an estimate of the cost of development, maintenance, etc... And an estimate of how much additional revenue this feature could drive. That's your true barrier to getting anything done. Unless you can demonstrate that you will increase your base by enough of an offset to the feature's cost, its not going to happen.

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(Written by Reg staff) Bronze badge

Re: Huh?

"The 'traditional' vendors have this thing called making a profit. Something two guys in a garage don't."

Quite!

That's the bit our anonymous newbie doesn't think is important.

That, and not all bits have equal value. People will pay more for bits they really want.

Where an idea is profitable the telco can partner or co-opt the service. More tomorrow on this...

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WTF?

I think you are missing some cultural telco issues Andrew

Telcos tend to be bloated bureaucracies full of unproductive staff who have very poor motivation levels due to an inability for anyone to achieve anything or to change the internal culture which stops them achieving. Many got this way by being a de-facto or royal chartered monopoly across large chunks of the globe and the mind set has not changed. Telcos are not a meritocracy where the innovative and productive get promoted, they are spat on and undermined by the herds of bovine wastrels who are still there because they can't get a job anywhere else and don't want to be shown up as useless and unproductive. The senior execs stay long enough to get a golden parachute and the good ones are gone well before it becomes obvious that their "changes" reinforced rather than addressed the underlying chronic issues.

In a telco, the investment case will be based on a 10 to 20 year lifecycle, the culture does not allow anything shorter than this, thus the need for uber standards that take ETSI or GSMA 5 years to bugger up, sorry, refine. You need standards like this if you are going to live with them for 20 years. This problem does not exist in the land of Twitter and Salesforce.

In a telco the management exist in a binary state of either;

a) No investment in new services, particularly non core, use all value added services to drive core network and billing traffic, that is our core business

b) We can't afford to be just a big dumb pipe, we must extend into the value added services, our pipes give us the competitive advantage over everyone else.

Clearly, these two result in an oscillation within the organisation rather than any sustained progress, any employee who could innovate and drive the dinosaur forward will leave in < 1.5 cycles or simply lose the will to live. Again, in an app store world this problem doesn't exist as the lean and agile app store vendor knows what they want to do and if they don't the other 5 just like them do and will out-compete them.

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WTF?

More cultural issues

To cap off the cultural problems with telcos;

There is no real competition in the telco world, just like petrol stations, banks and every other mature market they all know that reducing prices only benefits customers, not vendors. The telcos have armies of people who went to school, served with or otherwise know key government personnel and regulators to make sure no nasty surprises come from that direction (thus the true scale of Ms Reding's achievements). The telcos also work very hard to ensure that their pricing cannot be usefully compared to any "competitor" pricing by ensuring the plans are sufficiently different. This leads to a poorly informed customer base which produces the inefficient market they need and keeps the customers as the prey.

Combine this culture of ensuring that all changes are slow and gradual so that the big players going in are still the big players afterwards (this is what industry standards bodies are really for) and the tacit agreement that you can compete on everything but reduced price or margin and you get the modern telco market. The companies who control the networks have such vast sums of money locked up in them that they make real estate investors look high-risk.

What is asked for if the telcos are to survive this at all is for one or more of the players who own the infrastructure to change the entire culture of their organisation and even so, they'll still be too big to innovate at the speed of the small players. They'll try to do what the banks do and be parasitic in the payment stream but Apple has already demonstrated they can be bypassed for this. They'll also try to prevent really disruptive services from using "their" network but this will be a managed retreat from regulators. It will be a bumpy and unpleasant road with many pitfalls (for the customers and shareholders) but I really don't see a Telco making big enough changes to do anything other than slow the inevitable.

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Unhappy

"dumb bit pipes and mast maintainers"

That is what a lot of us want.

I want to be able to pick up my phone and phone someone whether by phone or, even, by IP. If I want a music service, I will sign up for one. If I want games or anything, I can install them from whatever market place takes my fancy, or directly from the manufacturers. (That last item shows I am not an iPhone user.)

All this other stuff that contract phones fill up with is just annoying. Handset manufacturers are not entirely innocent either (I'm looking at you Samsung). My latest phone is really excellent but there are "hubs" for Social, Music, Readers and Games, I unknowingly set some of them up on activation and ended up being told in 3 different places that someone had sent me a message.. If someone has texted me, a little icon saying so at the top of the screen is nice and a number by the app is all that I need.

If someone wants all that stuff from provider and manufacturer all they need to do is ask. I can say no and other people have the choice too. In the end, I reset the phone and ignored the suggestions to set those hubs up. Now my email tells me when I get email and so on. Much simpler.

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Re: "dumb bit pipes and mast maintainers"

Actually, you can tell you are not an iPhone user because you are complaining about the operator and manufacturer branding being pre-loaded onto your phone. You don't get that shit with Apple.

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Re: "dumb bit pipes and mast maintainers"

3 thumbs down, but no-one can actually say that you do get operator branding on the iphone, just downvote because they don't like that fact.

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"You mean I still can’t record and search my calls in 2012? Wow"

Every phone I've owned (from early Nokia bricks onwards) has had a log of who I've rung and who's rung me. As for recording, storage has been a problem until very recently, and remains a problem on cheap phones. On higher-end phones, apps *do* exist that'll automatically record calls for you. Phone manufacturers can't do this by default though, or even give their customers the option in the default setup, bcos many countries have laws about notifying people before recording their conversations.

So Mr Geddes is pretty crap as a commentator on this.

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Mushroom

"Mobiles...Kingdom"

I think the proper term is "Mobile Dungeon". The telecom operators have made screwing over their customers an operating principle.

You have a "plain" plan and want to do some websurfing ? Yes Sir, will cost 20 cent PER 10000 BYTES. Never mind the typical news site has now 1 MB size.

You want to send 160 characters to another phone ? That will cost you 10 cent at least.

You want to call a phone number which collects 4cents/minute from fixed line ? Sir, we will hose you 50 cent per minute from your mobile then.

The mobile telecom industry is full of idiots who would be unable to sell Moevenpick icecream during the hottest days on a full-of-people Mallorca beach. Sir, one nut costs 20 cents, so the total ice cream cone will cost you 1000*0,2 == 200 Euros. We only accept American Express, I am afraid. No cash please.

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Regulations and Customisations

Some of the limitations will be imposed by government regulation of telecoms. Unfortunately networks have to work, and so there's a certain amount of testing and documentation required by law that the proverbial two guys in a garage won't be bound by, or even know about.

I spent a couple of years working for the customisations department of a network hardware vendor, and sometimes the telcos would be forced into adding a feature because a large customer would need a feature, and if Vodafone wouldn't do it then Orange might. Unfortunately individuals don't have that level of clout.

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Anonymous Coward

"locking out imaginative services and the creation of new markets."

Hmmm.

That didn't seem to be a problem with ringtones (remember them?).

I suspect the problem is more finding "an imaginative new service" that end users will **pay for**, especially when lots of other stuff is close to free.

Of course a secondary problem, in the UK at least, is the average £400 or so per year it needs from every 3G user over five years or so, before the telcos have even recovered the money paid for the UK 3G licences.

"It all works thanks to the way termination fees are handled"

Well that's what I call a high risk business model then, given that termination fee models are different in different parts of the world, and even in the same part of the world may change from time to time (and to a lesser extent from network to network).

But never mind, there's VCs to be fleeced, and if all goes well, an IPO to be had.

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FAIL

I tried whatsapp. I didnt like the bit in the agreement about "we will use your bandwidth to facilitate communication between other users" or something similar for start, and when it got to the bit about demanding my phone number, I asked myself why should I part with that for a damn internet chat client? ... uninstalled it, and took my tinhat off.

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