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Promiscuous Telefónica

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LR Mobile News Analysis
Light Reading

Telefónica Móviles SA has jumped in bed with yet another new partner -- this time via a deal with NTT DoCoMo Inc. (NYSE: DCM) to develop i-mode services for the Spanish market (see Spain Gets E-mocional).

Aside from fueling the debate on whether i-mode will ever be successful in Europe, the agreement also highlights how Telefónica’s rampant flirting and natural appeal as a “big boy” on the global mobile scene has helped it build a veritable harem of wireless data development partners.

Previously announced service development partners include Nokia Corp. (NYSE: NOK), Microsoft Corp. (Nasdaq: MSFT), Openwave Systems Inc. (Nasdaq: OPWV), Sun Microsystems Inc. (Nasdaq: SUNW), Mitsui & Co. Ltd., Ericsson AB (Nasdaq: ERICY), and Hewlett-Packard Co. (NYSE: HPQ) -- showing that Telefónica at least has good taste. But each of these firms has different, and often competing, views on how the wireless data market will evolve, which raises the question of whether Telefónica knows where it’s headed?

For the moment, its strategy of hedging its bets looks pretty smart, as it provides a window of opportunity to evaluate, for instance, .Net versus Java or i-mode versus pure WAP. And its willingness to experiment demonstrates a deep commitment to making wireless data a success.

But in the long run, maintaining multiple parallel platforms could prove to be inefficient and confusing. By mid 2003, for instance, consumers will be able to access nearly identical services over both i-mode and WAP on the same handset.

Consequently, a year or two from now, some kind of process to streamline Telefónica’s development partner relationships looks inevitable and risks leaving a trail of spurned suitors in its wake.

— Gabriel Brown, Research Analyst, Unstrung

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