20-February-2013 Telefonica Digital has entered into a partnership with FeedHenry to provide a service for enterprise customers by which they can create, manage, and integrate mobile apps that will be hosted in the cloud. The collaboration between the two companies dates back to 2012, when they agreed to bring FeedHenry’s Mobile Application Platform to corporate customers in Telefonica’s markets. The new service will be available through O2 in the U.K.,Ireland, and Germany. Tarifica’s Take: We think Telefonica is a great, world-class company, and a surprisingly entrepreneurial one given its size. Telefonica’s partnership with FeedHenry could definitely land it some new enterprise clients, given the exploding interest in cloud services, which will likely result in modest revenue gains. However, it will not solve the fundamental problem that Telefonica and just about every other MNO faces which is the need to become less reliant on third parties to bring in business. In essence, by taking this approach, the operator is causing itself to remain in the role of conduit rather than creator – the proverbial“dumb pipe.” A much better approach in our view would be for Telefonica to acquire FeedHenry, thereby moving itself up the “food chain” of innovative services and products, and placing control of its destiny more firmly in its hands. Recently, we reported on a deal along these lines, which was the purchase by Japanese operator NTT of cloud services consultant Centerstance. We believe that cloud services will be a growth area for the foreseeable future, and that it is especially important for MNOs to bring such capabilities in-house to the maximum degree possible. In the case of Telefonica and FeedHenry that may not be immediately possible as the latter may not be open to sale discussions. But every company is for sale at the right price and if we were counseling Telefonica, our advice would be to try to meet that price, or at least seek to make a minority investment which could one day lead to an outright acquisition. Merely having a cloud services partner is a poor substitute for having such capabilities in-house. Other Notable Developments: Orange Spain has introduced a new sim-only plan called Delfin 12, available on a 12-month contract, which includes 500 MB of mobile data and 60 minutes of voice for €9.60 per month for the first six months, and €12.00 per month thereafter. Customers will be charged six eurocents per minute for exceeding the call allowance, plus a call set-up fee of 18.1 eurocents. We like this plan. With its low cost commitment, it should prove attractive to subscribers in Spain, a market where consumers are suffering economically as a result of very high unemployment. In the short term, we see it as a good way for Orange to keep subscribers and possibly even winsome away from other providers. Ultimately, it could even be a revenue enhancer because the minimums in the package are set very low, making it likely that most plan subscribers will exceed them. Essentially, it is a “Trojan Horse” offer,luring low-end subscribers with attractive monthly fees, but then charging them for overages that will almost certainly occur.
Posted on: Wed, 04 Sep 2013 23:13:46 +0000
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