Mobile Asia Congress in Macau

We are back from Macau where temperature was a nice 25+ to Beijing’s cold wind. This first Mobile Asia Congress organized by the GSM Association (GSMA) was held at the new gigantic Venetian casino, which opened in September to welcome both rich and poor gamblers from all over Asia.

If casinos are mostly in the business of selling dreams, it was heartwarming to hear during the various keynotes and panels that after years of selling dreams (notably 3G), mobile companies are now more or less back to reality and actually delivering some results and proper services. The event gathered a nice crowd from all over Asia. As usual in international events, the Japanese were missing on the ground due to passive media filtering (aside from a standard corporate talk from NTT DoCoMo’s CEO, and a great speech from Softbank’s Masayoshi Son)

Of course some of them, especially the largest ones, still have to support the 3G hype, or as greatly put by the CEO of a Russian telco: “Not having 3G is punitive to your stock price, but creating value is very difficult.”

We took away some quotes:

• Bill Huang from China Mobile | “We cannot do flat-rate data byt we are ok with the “near flat-rate”, because Chinese are too smart“.
• +8* | That sounded more like a joke than a rational idea. Internet is flat rate and works well. It sounded more like a smart way to say that CMCC’s network would crumble if they did it.
• “Regulations are holding back mobile payment in Indonesia. It is the exact opposite in the Philippines. In Japan, NTT DoCoMo bought a credit card company.“
• +8* | As we took part in rountable with MII and MOFCOM regulators in China about e-commerce (which also covers mobile commerce and the digital content industry) we saw firsthand how difficult it is for the regulator to keep up with the rapid changes in the market. Maybe time to review compensation packages and hire extra brains to speed up the processes in countries slow to update?
• Sony | “If content is King, the consumer is King Kong”
• +8* | We heard this one before, and Sony seems to still be stuck in the “mobile is all about entertainment” meme.
• Bill Huang | China Mobile | “The next billion customers will not be on 3G but on GSM”
• +8* | China adds 6M users a month, 60% from rural areas)
• Yahoo | “Keys are (1) Ease of use (2) Discoverability – you have a 10 seconds countdown with each service (3) Pricing model (4) Openness
• +8* | it was good to hear Yahoo is finally understanding you cannot ask Internet people to do mobile things, and hired a bunch of new guys to deal with mobile. 7 years later, we’re finally getting close.
• Indian operator | “We introduced the lifetime prepaid, which touched the heart of customers and had a great effect on our brand and subscribers numbers”
• +8* | India is adding 8 million subs a month and is the world’s fastest growing market in volume. Their approach to prepaid is great and could inspire many telcos if they did not look down on India.
• Indian operator | “Innovation is today at the core of our business“
• +8*: India has 7 carriers, the world’s lowest tariffs, highest MoU, the least spectrum per carrier, high taxes and lowest GDP/capita – with such constraints there is no other way but to innovate!

Eventually, we left with the feeling that low-key carriers or operators from emerging markets were much more innovative in finding ways to raise the bottom line, and create real value rather than kids-oriented generic stuff like ringtones, logos and games (which are very much a commodity today), or Blackberry-business-guys-oriented mobile TV thingy pushed by larger ones.

Also, more and more companies are trying to reach customers directly and work without carriers! Be it with SIM tweaks, dual SIM handsets, software, independent portals, etc. They are also exploring new business models to support them. Honestly, carriers have done such as bad job at working with all those innovative companies that it would be unfair of them to complain now.

IM & SNS services are popping up, but despite a neat interface and service features (such as Miyowa’s IM), hardly any of them is really original. Best innovator in the field we saw until now remains Nplugs in South Korea, which leverages Cyworld’s founder “Personal Resources Planner” concept.

Will fixed line carriers strike back in 2008? After Fon’s agreement with BT and WiMax coming up, we felt that there might be some interesting moves from them. To quote a large mobile carrier in Europe (which also happens to be a client) “3G is a huge mistake but there is no coming back”.
To end this report with a bit of “big picture thinking“, let’s ask ourselves how many languages can we learn in a year?

As mobile content people are joined by other industries such as music, TV, cinema, banking or advertising, mobile carriers are having a hard time: they are at the top of their industry and have to sit down with top players of other value chains, who speak a totally different language to their own. Learning a new language, a new value chain, a new user behavior every year is a strenuous exercise for telecom execs.

Remember that the first and last time you used to meet a telecom employee was when they plugged your phone line. Let’s remember that the whole telecom industry, today at the center of so many other industries, is still a young kid that has been promoted king.

From Macau | Benjamin & Yiqun