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No-frills, low-tech cell phones come to Europe
By John Blau
After spending billions of euros on acquiring new 3G (third-generation) mobile broadband licenses, billions more on building the sophisticated wireless networks and still more on promoting the high-speed data service, numerous mobile phone operators in Europe are now launching new no-frills, low-tech cell phones and services.
Talk about a u-turn.
The move to "less is more" comes as mobile operators in Europe fight to win and, perhaps even more importantly, retain customers in rapidly saturating markets.
"It's all about customer segmentation and about targeting a huge group of people out there who want nothing more than easy-to-use, inexpensive phones. These are people who aren't interested in a bunch of fancy data functions," said Emma Mohr-McClune, an analyst with Current Analysis Inc.
The most recent mobile phone company to enter the less-is-more fray is Germany's E-Plus Mobilfunk GmbH & Co. KG. On Monday, the Düsseldorf, Germany, company launched a new mobile discount operator, Simyo GmbH, which will sell SIM (Subscriber Identity Module) cards over the Internet at discounted rates.
Customers only need to know two basic rates: €0.19 (US$ 0.24) per minute for calls made around the clock; and €0.14 per text message using SMS (Short Message Service). They can top up their SIM cards online as low or high as they want, and are not bound to a contract. A one-off starter fee of €19.95 is required, but includes a call credit of €10.
In return, customers must forgo some perks, such as subsidized handsets, free 24-hour hot-line service or even support in shops.
"Simyo is a service that, among other things, rewards people who are willing to purchase a phone service online without tying up resources in call centers or shops," said Mohr-McClune.
Vodafone Group PLC, Europe's largest mobile phone company, is testing the low-tech end of the market with two new phones that the operator launched on May 20. The phones, branded "Simply," are designed for ease of use with a large screen and dedicated buttons to make a call or send SMS messages, having dispensed with advanced features, such as cameras, multimedia messaging, Bluetooth and 3G.
Both stripped-down phones, the simple black, candybar-shaped VS1 and the more stylish VS2, are manufactured by Sagem Communication SA.
"Simply is the product of almost two-year's research, essentially confirming the uncomfortable truth that a sizeable proportion of the mass market view high-tech handsets as inscrutable and time-wasting gadgets with zero applicability or use," Mohr-McClune wrote in a report.
The analyst expects Vodafone to launch a set of attractive tariffs to accompany the Simply handsets.
Dutch mobile phone company KPN Mobile NV, which owns E-Plus, is another operator that has been at the forefront of customer segmentation, according to Mohr-McClune.
In a move to differentiate itself from more than 20 companies offering mobile phone services in the country, including over a dozen so-called MVNOs (mobile virtual network operators), KPN Mobile has rolled out a youth-centric service branded Hi.
At the Cebit trade show in Hanover, Germany, earlier this year, numerous mobile phone operators, including T-Mobile International AG, spoke of the low-end, youth sector as one of the last big remaining customers acquisition opportunities in a near-saturated Europe.
Posted May 31, 2005 05:35 PM |
