Mobile moves centre stage

2 Jan 2009

The lines are blurring between on-the-move mobile and in-office fixed-line communications.

Mobile phones are so deeply embedded into our work lives now that many of us instinctively use them as a first port of call for a business contact, rather than trying to reach them by landline. According to estimates from Vodafone and 3, close to 60pc of calls from business PABX phone systems are to mobiles.

Research from the telecoms regulator ComReg (Commission for Communications Regulation) has also shown steady increases in calls to mobiles at the expense of fixed lines. As the mobile operators try to make a case for being considered a company’s prime telecoms provider, they’re counting on trends such as these to help sway the argument in their favour.

The relationship between a business and its mobile network is changing now that these same providers have begun offering fixed-line telecoms and broadband along with the staple mobile services.

Since the middle of last year, Vodafone, O2 and 3 have provided 3G mobile broadband services that, on the face of it, are price-competitive compared to standard DSL broadband over the phone network. A significant portion of demand has come from businesses, and all of the operators are upgrading capacity on their networks, both for upload and download speeds.

This year, it’s the turn of the mobile operators to move into the space traditionally dominated by the fixed-line telecoms providers. Eircom’s acquisition of Meteor is an example of the trend in reverse, but Vodafone bought Perlico back in 2007 for this very reason.

Vodafone initially used this deal as a way to provide home-phone services, but it recently began offering fixed-line telecoms to SMEs and larger firms. “It’s going to allow us to have a conversation with our business customers, and it’s not just going to be about providing mobile services,” says Darragh Fitzgerald Selby, corporate sales manager with Vodafone.

In a similar vein, O2 recently announced landline services for business customers. Despite previous media speculation, it hasn’t made an acquisition to do so, but the strategy is fundamentally the same, confirms Billy D’Arcy, head of corporate and business sales with O2. “It’s given us a much broader appeal to customers,” he says.

To date, 3 has gone the partnership route, offering fixed-line services through agreements with firms such as Pure Telecom.

However, mobile operators may have to fight the perception that calls on their networks have a price premium, compared to fixed-line telecoms. Not surprisingly, they dispute this.

“In the largest businesses, we’d already be more aggressive than the fixed carriers,” says Fitzgerald Selby. Referring to the statistics showing how mobile calls have surpassed those to landlines, he adds: “That means, strategically, Vodafone can go to customers with propositions that will have more meaning to them. We can offer much more attractive solutions from a telecoms perspective.”

Damien Gallagher, head of business and new initiatives at 3, believes there is room to offer competitive prices. “All the fixed-line operators are very similar in price, to be fair,” he says.

Many business plans allow free calls to numbers on the same network, and this doesn’t just apply for mobile-to-mobile calls. There are SIM-based devices that can be connected to a telephone exchang, which treat calls from the firm’s fixed line to mobiles as on-network calls, potentially creating further savings for cash-pressed SMEs.

“When put in a corner, some people in a company will settle for fixed lines and some for mobile. Now, we can cater for both,” says D’Arcy. Fitzgerald Selby says these systems will be improved next year.

Another significant change business customers will notice is the move away from very rigid pre-packaged bundles. Operators now claim to offer more flexible pricing options that are better suited to an individual company’s particular requirements. “If you put a bundle out there, there may be elements that don’t appeal to everyone,” says D’Arcy. “We tailor it rather than forcing a bundle on someone, where only two out of three parts of that are appropriate.”

Vodafone and O2 both offer a consultancy-led approach that involves analysing a customer’s telecoms bill to see where savings can be made. They then offer a bespoke price plan that’s intended to more closely reflect the customer’s usage of mobile and fixed-line calls within the business. “What we’ve seen so far is that we can save a business customer 15pc, instead of just giving them a generic bundle,” says Fitzgerald Selby.

3 takes a slightly different approach. Although its pricing structure is based around set amounts of minutes per month, it doesn’t make a distinction between voice, text messaging or data. The company says this can make for more transparent charges. “If you use text, it comes out of the bundle. If not, it gets used as a minute of voice or a minute of data,” says Gallagher.

Perhaps proving that there really is no such thing as an ill wind that blows no one any good, the mobile networks are also betting that the current economic climate is putting many businesses into cost-control mode.

“Businesses will start looking at their bills more closely, for savings and what they can shave off their costs,” Gallagher insists. Adds Fitzgerald Selby: “It’s very hard for a financial controller to save money when looking at the fixed-line costs, mobile costs and broadband costs separately, but it’s a lot easier to see the savings when they’re on one bill.”

With many companies likely to be focused on reducing costs wherever possible, the next 12 months will be a useful acid test of the mobile operators’ claims to compete as full-service telecoms providers.

Brewing up a Storm

Aside from strategy, a significant technology development in the mobile space is the arrival of the BlackBerry Storm, a touchscreen device intended to rival Apple’s iPhone.

BlackBerry maker RIM collaborated with Vodafone to build the smart phone, and it is exclusively available through Vodafone. Darragh Fitzgerald Selby, corporate sales manager with Vodafone, believes the Storm is an important addition to the company’s business offering. It gives access to email and can also be set up to have bespoke company software applications loaded onto it.

“It has the look and feel of a consumer device,” he says. “Our business customers have a requirement for a combined phone and media device with access to the internet and productivity tools from an IT perspective.”

The Storm’s desktop interface can operate in either portrait or landscape mode. It retains the dedicated ‘menu’ and ‘escape’ keys familiar to BlackBerry smart-phone users, but now allows for multi-touches, taps and slides, and lets the user easily highlight, scroll, pan or zoom. The smart phone will be available on four price plans, Vodafone has confirmed.

By Gordon Smith

Gordon Smith was a contributor to Silicon Republic