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3G/HSPA

Orange Boss Pleads for Peace

Orange SA CEO Jean-François Pontal delivered what he called a "message of optimism" to the wireless sector today during his keynote address at a mobile conference in London's Docklands, proclaiming that "data will be more revolutionary than voice in the lives of our customers."

He also managed to criticize his own company's approach to selling mobile data to its customers, which is very honest and admirable. But more of that later.

Speaking at the Mobile Commerce World event, Pontal said it was important to remember that the wireless industry has been beset with doomsday scenarios before. Europe has now reached 75 percent penetration, with nearly 300 million subscribers, he noted, taking a pronounced swipe at the negative attitude of the Financial Times in the late 1990s.

The head honcho at the France Telecom SA-owned operator also swept aside concerns about the slow pace of 3G rollout. "With GPRS and 3G we were always going to have teething problems and slipped timescales. It happens in every industry. What you end up with is the planned service brought to market a few months late, and that's nothing in the wider scheme of things." He did, however, heavily promote the idea of collaboration and compromise within the industry to help speed up technical standards and interoperability.

Pontal argued that everyone must look at the broader perspective of the industry and recognize the enormous potential for new business and growth. "The real opportunity for us [in the wireless industry] is that we lie at the intersection of three key phenomena -- language, communication, and money." And the industry must not attempt to communicate with its customers using the foreign language of technology. In an undisguised attack on the mobile data tariffing models of some of Orange's main competitors, Pontal said "most of our customers do not know what a bit or a byte is, so we would never dream of charging them for one."

Uh oh. Has Monsieur Pontal just tossed oeuf on his own visage? Think back to February of this year, when the company released its 'Orange Means Business' launch document. What does it say? "The GPRS tariff structure will be similar wherever it is offered in Europe, with customers able to buy a consistent range of different megabyte bundles -- 5mb, 15mb, 30mb and 50mb." Indeed, the pricing structure offered by Orange France -- €6 for up to 10 megabytes of data a month -- is one of the best mobile data deals in Europe. What's French for "oops"?

Whether Pontal assumed the audience would be focused on the U.K., where Orange has launched a buck-per-bang picture messaging service (see Orange Puts Brits in the Picture), or whether he had simply forgotten his own company's GPRS pricing structure, matters not. This was no doubt intended as a swipe at rivals Vodafone Group plc (NYSE: VOD) and mmO2 plc, both of which charge for volume of data downloaded.

Moving swiftly on from dissing his own company's marketing strategy, Pontal identified a key hurdle the mobile world must overcome if it is to make money from data. The free-content model is not one that can be transferred from the nascent days of the Internet to the mobile world, argued Pontal. "We must charge or die -- this is the end of 'free.' But one of the biggest threats is that content owners might lose faith in mobile, and we must make sure that does not happen."

Operators can achieve this by striking the right balance between being a dumb pipe and restricting customers with a walled garden approach -- another apparent dig at Vodafone, specifically at its Vizzavi portal, and at mmO2's now rebranded Genie offering.

"I don't believe the operator can simply act as a pure pipe, offering access to everything, opening the floodgates. And the 'walled garden' approach is a great disservice to everyone. It limits possibilities, kills content, and creates resentment among customers. There is no business sense in exclusive deals. Relationships with content providers must be inclusive. Orange will accomplish this with new billing options and revenue sharing agreements." Everyone involved in the value chain must ensure that the content providers are adequately compensated, so as to encourage developers to work in the wireless space. It is equally important, though, to ensure that the operators cover their costs and make a business case from mobile content services, while "the customers must be happy with the prices they are asked to pay."

Crucial to keeping the content developers enthused is the availability of multimedia terminals, he added, saying that technical standards that aid interoperability are absolutely vital. "We must learn from our successes. Look at how SMS took off once the networks could interoperate. Customers must not have to worry about devices, networks, platforms, or location." Operators, device manufacturers and software companies must learn to "cooperate, collaborate, and compromise" so that the industry can reach its real potential. "Let's get real and work towards the killer environment," stated the CEO. "The opportunity is clear -- it is there for the taking."

He passed off questions regarding the ability of the different major companies to work in harmony, saying that "the skepticism about the industry helps us to be even more keen to find common solutions. We need to compromise more, and cut down the amount of time spent sitting around tables trying to decide on standards."

Pontal then took a moment to criticize the way i-mode has been created and offered in Europe (by KPN Mobile and E-Plus Mobilfunk GmbH already, and soon by a competitor on Orange's home turf, Bouygues Telecom). "Although it has done quite well, i-mode is the contrary to what I have been saying we need to do. It is not based on interoperability. I can see it converging with WAP ultimately so that it can be interoperable."

— Ray Le Maistre, European Editor, Unstrung
www.unstrung.com
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