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Mobile data a rip-off says email software vendor

OpenHand wags a finger

Internet Security Threat Report 2014

A British email software claims greedy mobile operators are locking it out of the mobile data, forcing it to find a backdoor into the lucrative sector.

OpenHand Software says it became so exasperated by trying to sell its mobile data service through operators that it came to the conclusion they have a vested interest in selling overpriced data contracts.

Tim Belfall, operations director at OpenHand, said the £1m turnover firm had decided to recruit dealers after years of getting the cold shoulder from operators. It would launch a campaign in November with the aim to have up to 400 UK dealers within a year.

"It doesn't make cost sense for the operators to support a company like OpenHand. So when we've approached Vodafone and O2 they've not been encouraging... It makes financial sense for them to push a higher-priced product," said Belfall.

Belfall said OpenHand's cost per user is about £15 a month including tariff and license. Typical data costs included in this price are about £2 to £5 a month. He said users typically waste money on high tariff charges that cost double and give them bandwidth they never use.

OpenHand keeps its tariffs down by charging per use, rather than for a package with an allotted monthly data use. It also pulls data across the network, rather than pushing, which keeps usage down.

Other reasons why OpenHand says it is not favoured by operators are that as the software is network independent, users are freer to find a better deal at the end of the contract period.

"The networks don't get a lock-in and the amount of data that crosses the network is low," said Belfall.

OpenHand is also device independent, the only exception to the rule being Blackberry, to which the software publisher resolutely refuses to port its software.

Rob Bamforth, a mobile data analyst with Quocirca, supported OpenHand's story: "The value chain is making an awful lot of money out of [mobile data] - but that also includes RIM (the owners of Blackberry)".

He said platform and operator independent software like OpenHand was attractive to corporate customers and operators were thinking short term by not using it.

Yet the case against the operators is still not cut and dried. On the one hand, Etienne Greef, professional services director of security integrator and OpenHand reseller MIS CDS, agreed that it was not in the interests of operators to sell OpenHand because it used about a third less bandwidth than rivals such as Blackberry - and that translates into about half the tariff price.

However, he said, as OpenHand was platform independent it could be troublesome for an operator to install across a range of devices.

Mobile data tariffs are about as unfathomable as mobile phone tariffs. Patrick Kingsley Williams, managing director of reseller MWL, has been toying with mobile data and reckons the cost to a single user can be upwards of £80 a month with Blackberry and Vodafone. On Vodafone's Web site (they were not available to comment) the tariff is around £30 a month.

Even without embracing the market leader, OpenHand has some bittersweet enticements for dealers.

OpenHand will be telling its dealers that although it is not in bed with the operators, they can still sell smart phones subsidised by the operators at zero cost or close to it as part of the telephone contract. The operators still make money from the telephone usage, while the dealer can offer a separate email contract on the same device at about half the usual cost.

Belfall also said dealers will be safer this way from having their business pinched by operators: "When it comes to the contract anniversary, the networks won't be able to approach the customers directly, as they do, to provide a better deal."®

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