Femtosat, but not seamless yet

Covering France has always been a headache for operators : unlike in the UK, population is very much dispersed, and 75 million visitors roam the country every year with a special fondness for bullet trains, mountain hiking, or kayaking down remote valleys.

Curing the great "digital divide" between broadband France and forsaken France became a national cause, local administrations pushing their own agendas to prevent businesses from leaving their regions, and national authorities forcing operators to pool resources in non-telecomly-strategic areas... As of today, total unbundling is available only in 30% of France Telecom POPs, and even Paris is struggling : rolling out FTTH remains a painstaking process from one old building to another.

As far as 3G is concerned, SFR is supposed to cover 90% of the population and 98% by 2012, but remains closer to 80%. Orange is not respecting its own obligations either. Bouygues Telecom ? even further downhill... Many wonder how potential newcomer Iliad Free could roll out a brand new nationwide 3G network...

But for the public, all 3 incumbents are seen as Scrooges : either of the Scrooge McDuck kind, sitting on a mountain of money and refusing to spend it, or of the Ebenezer Scrooge kind, bitterly sitting in the dark while everybody else expects Santa Claus Free Mobile for Christmas.

SFR obviously refused the role and announced two innovations for this week (for the moment, same brand but different worlds) :

=> a Satellite Internet Pack with Eutelsat (from EUR 29.90 / month for a not so broad band - max 3.6 Mbps and 4.7 GB -, but unlimited browsing between 11 pm and 7 am)

=> a femtocell quad play booster, Home 3G (via SHD, a.k.a. Société du Haut Débit, a SFR / Neuf Cegetel unit). Theoretically, Home 3G's EUR199 adaptor can be plugged on any ADSL box, but not all equipments will be compatible :



4 SFR 3G subscribers will be able to communicate at the same time on the same femtocell, but if they fully enjoy the service from day one, they may adapt their usage after receiving the first bill... and reconsider the virtues of the ADSL box they had in the first place.

Nevertheless, the best defense is a good offense, and being the first to strike at the macro and micro level necessarily paves the way for the next steps.

mot-bile 2009

2nd Million for TU Media - 2nd country for SK Telecom - Citi JV

June 25, 2009 ? Apparently a good day for SK Telecom PR :
- subsidiary TU Media signs its 2,000,000 th customer
- JV with Citigroup launches mobile banking services in the Philippines, a few months after Hong Kong

The SK Telecom - Citibank Philippines JV (Mobile Money Ventures LLC) is definitely good news : in Hong-Kong, services were more about portfolio management than actual personal banking and transactions - what Citi Mobile Banking (CMB) is all about in the Philippines. These browser-based services shall soon be implemented in other countries, and confirm the operator's international ambitions in mobile finance (see recently "SK Telecom's Wild Hana Card").

But is TU Media really a success ?

Many European players would love to boast 2 M mobile TV paid users, but 2 M is not even equivalent to 10% of SK Telecom's customer base and for this operator, a 10% penetration after 4 years doesn't seem very impressive.

Besides, to claim its second million customers, SKT's S-DMB unit took more time than it did for the first : TU Media was launched in May 2005 and reached the 1 M mark in December 2006.

Indeed, TU Media was in a very poor condition last year, both financially (mounting debts) and commercially (it claimed only 1.3 M subs in June 2008, a gain of 300,000 in 1.5 years). The 700k customers gained over the past 12 months are the result of what appears to be a make or break move by the owner : SKT went up in the company, injected KRW 55 bn more, and offered massive discounts to its own mobile subscribers... to the point that an undisclosed proportion of its "paid subscribers" don't have to pay to enjoy the service* !

As a consequence :

=> TU Media becomes more competitive with terrestrial accesses (T-DMB), which have been free since the beginning (launched in December 2005) : as we saw ("3M DMB subs - SBSM on its way"), that's the reason why they are much more popular. T-DMB claims the bulk of Korea's 20M+ DMB-enabled devices (every other handset is OK for mobile TV).

=> At the corporate level, TU Media is now more a MNO's Business Unit than the initial stand alone operator. The very few people who didn't use SKT as their mobile phone operator are encouraged to join the leader, and for the rest, TU Media looks almost like an option among others.

=> TU Media has been burning a lot of cash, and a sustainable TU Media requires more differenciation, and even greater efforts :

- Technological differenciation is not necessarily positive : in covered areas, terrestrial has theoretically an edge over satellite for indoor. SKT does enjoy a truly nationwide coverage, and propose an in-car access offer (TU Rideon - KRW 11,000 / mo - 3 yrs offered for Basic) as well as a real time traffic service (TU TPEG - KRW 3,000 / mo), but T-DMB is very popular for buses and coaches.

- Content and added value services remain key, and SKT will not always surf on such events as the Beijing Olympics, a major boost for subscriptions last year (the whole population was hooked and literally always on one way / media or another)... but not very differentiating since several broadcasters offered the same images (SBS clinched the exclusive TV rights for the next Olympic Games). The only "paid service" operator could try and lock some key rights to pimp up its own premium channels TU Entertainment and TU Sports (both available through the TU Select service : 1 channel for KRW 2,000 / mo, 2 for 3,000, 3 for 4,000). Other premium services feature TUBOX (movies PPV for krw 1,000 or 1,500 apiece) and PREMIUM 19+ (adult for krw 3,000 / mo or 1,200 for 2 days).

Still now, SKT seems to be as much pushing the service as trying to pull it out of a ditch. The technological landscape keeps evolving and in 2012, fixed and mobile broadband will reach respectly 1 Gbps and 10 Mbps. Typically, SKT is investing massively in optic cabling (from 5,000 km to 88,000 km) through SK Networks.

But mobile TV has found a public anyway, and SK Telecom is not the kind of player to abandon leadership easily. Particularily in such a key vertical.

So it brought along TU Media in its trials in Thailand, so...

... not to be discontinued yet.

But stay tuned.


* With TU Media, you pay only for subscription charges. Neither for traffic nor for content, except for movies on demand (NB: these days, KRW 1,000 is about USD 0.78) :
- Basic rates are KRW 6,000 for TU Slim (9 TV channels + 16 audio), idem for TU English (10 TV + 16), and KRW 11,000 for TU Basic (unlimited 21 TV + 16 audio)
- SKT customers enjoy a 6,000 discount on basic rates, which sets Basic at 5,000... and Slim and English services at zero

Orange has its rights, Orange has it right

Two good points for Orange :

- a greater share of French soccer rights : beyond the mobile rights it already earned in the previous contest, VOD and saturday night games should prove great teasers for the other sides of its quad play offers. Orange Sports is likely to become a better known and respected brand.

- a strategical partnership with Samsung for satellite TV broadcasting (DTH, probably via Eutelsat's Hotbird, but not on a wire) : 1 to 1.5 million sets (PVR + HD tuner) are expected from the begining. UK, Poland and Spain could follow France.

If Canal+ secured its lion's share in both soccer rights and satellite accesses, Vivendi is definitely facing a much tougher challenger...

... and all three French MNOs are now enjoying a strong TV flavor to better face a potential new entrant on their core market (see "3G license part III - France's fourth wedding or a funeral ?"- 20070309).