Feeds

Vodafone sees picture emails as killer app

Magic bullet

  • alert
  • submit to reddit

High performance access to file storage

ComputerWire: IT Industry Intelligence

ComputerWire Staff


Vodafone Group Plc sees the exchange of pictures by mobile phones - pioneered by its J-Phone operation in Japan - as the killer application in the coming year that will help drive double-digit revenue growth.

The world's largest mobile carrier has put 3G on the back burner and does not expect a mass roll-out of devices until 2004. Instead chief executive Chris Gent insisted that it is applications that will appeal to its customers - not technology.

Gent's analysis, given as Vodafone revealed full-year figures that showed a 16.2bn pounds ($23.6bn) loss, undoubtedly makes a virtue out of a necessity given the slippage in availability of 3G equipment. But it is rooted in the extraordinary success of J-Phone's "sha-mail" picture messaging services for customers with camera-enabled handsets.

These services, which have been enhanced with a video clip message service called "movie sha mail", have grabbed more new customers than market leader NTT DoCoMo's 3G services, and convinced the Vodafone team that the right applications on 2.5G services can be a bigger draw than the vague attractions of high-speed 3G data services. The services will trial in Germany and Portugal, and be rolled out across Europe in the run-up to Christmas.

Meanwhile, for the year to March 31, it announced a net loss of 16.2bn pounds ($23.6bn), up from a loss of 9.9bn pounds ($13.9bn) on revenue up 52.3% at 22.8bn pounds ($33.4bn). While at the top end of market expectations, the only surprise in Vodafone's figures was the lack of write-downs, expected to be in the range of between 10bn pounds and 20bn pounds ($14.6bn to $29.2bn) related to its 112bn pound ($163.5bn) acquisition in 2000 of Mannesmann AG. Vodafone said that based on the future cashflows of its operations, it sees no reason to write down the book value of its operations.

It based this judgement on cash flow projections to 2011, a way of thinking that none of its peers has indulged in, and will inevitably arouse suspicions that if it operated in a more conventional way and made a massive write-off in relation to Mannesmann, its share price would dive. As it is, Vodafone has been forced to write off 6bn pounds ($8.8bn) in relation to its non-controlled business, where more conventional market valuations rule.

Vodafone sees itself in a transitional period as it leaves behind growth from rising numbers of subscribers as markets become saturated, and it moves into an era where ARPUs will increase with the take-up of data services.

It reported that data revenue increased by 87% last year to 2bn pounds ($2.9bn), 8.7% of the total. However, this was driven by the runaway success of SMS, which accounted for 7%, while internet data contributed only 1.7%.

With its share price in the doldrums, Vodafone is aware that there are growing suspicions, as skepticism about 3G has grown, that far from being a growth stock, it is starting to be judged as a "stodgy utility", with bleak growth prospects and falling ARPUs as the novelty of mobile communications starts to fade. Thus it has got to find new growth drivers, and Japan Telecom has provided it with an application that can be rolled out onto its GPRS networks.

With a strong balance sheet, it is still looking to increase its holdings in those operators where it currently has modest stakes. But it has much to do with its existing operations. Even though Vodafone will not write down the value of Mannesmann, its revenue in Germany rose only 3% to 4.1bn pounds ($6bn) last year. That's the performance of a stodgy utility, and it will take the exchange of an awful lot of picture emails to turn its German operation into a high growth area.

© ComputerWire. All rights reserved.

High performance access to file storage

More from The Register

next story
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
Broadband Secretary of SHEEP sensationally quits Cabinet
Maria Miller finally resigns over expenses row
Skype pimps pro-level broadcast service
Playing Cat and Mouse with the media
Beat it, freetards! Dyn to shut down no-cost dynamic DNS next month
... but don't worry, charter members, you're still in 'for life'
Like Google, Comcast might roll its own mobile voice network
Says anything's possible if regulators approve merger with Time Warner
EE dismisses DATA-BURNING glitch with Orange Mail app
Bug quietly slurps PAYG credit - yet EE denies it exists
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.