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« Mobile Services Beyond Messaging? Excellent TNS Global Survey Reveals Tons | Main | Understanding OTT - Why Carriers dislike BBM, hate iMessage and fear Skype (updated) »

May 09, 2012

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Comments

zlutor

@Tomi: I think you have meant Elop, not Ballmer here:

"Then Ballmer gives a clear explanation of why operators hate Skype, when he explained why they don't like Skype: "The feedback from operators is they don’t like Skype, of course, because for those operators who have a traditional wire-line business, traditional telephone business, it could take away from revenues."

Yousif Abdullah

Thank you Tomi for posting this. I read every word of this blog post very carefully and I had the feeling right from the beginning that no one was misquoted and nothing was misrepresented here. Anyone who thinks otherwise ought to check their facts against what you said.

As always, great stuff. Keep it up! :)
~ Yousif

vvaz

Tomi,

Congratulations! But remember to download and keep all those videos and articles on your harddisk. In next attempt on spin they may vanish from the web.

ejvictor

@lala
Retailers or carriers? ... so if no boycott due to Microsoft Skype, Lumia's just are not wanted by carriers?

TCB

You have it right Tomi, Microsoft does want the world domination in communication, and they think they will succeed using same strong arm tactics they succeeded in making desktop their (apple OSX share is globally under 5%)

Many thought Gates was the master of evil, but actually it was always Ballmer who initiated bully tactics, bordering on illegal (actually in many places going beyond legal), this whole NOKIA saga is just the latest chapter.

People have lost the sense of Microsoft threat in the past few years of Apple insurgency, but unlike Apple (a premium brand for the posh crowd), Microsoft's global domination project is a real threat and once enforced, its a rock solid monopoly (Office suites and desktop OS is a prime example).


Elop is obviously a planted trojan horse, and this whole thing is desperate for an investigation.

Shavy

@tomi the community will be standing with you. It is not easy for you to face the evil empire. I can't do anything either but to support you morally.

cycnus

@Tomi

Congratulation. I think this is THE BEST of your article... EVER!!!!
I read this article TWICE before writing a comment here, to make sure I don't miss anything you said.

This really show that experience make you rich.
You really know how this industry (the mobile industry) work.
I'm truly amazed that you were correct that skype is a problem
I first thought that android and iOS also have skype, so what the fuss.
I believe next quarter would be more interesting :)

I really hope that you got Pulitzer award for this piece.
because this article is not just a regular article, it's an art!!!!
YOU'RE THE MAN.

Spawn

What I like most about Eloos answer is the
"maybe we can do something creative that generates incremental revenue for you."

it sounds so

"Yes, you make 90% of your profit that way but trust me, if you give it up we will still find a way you can make some money somehow and if not, hey, its inevitable."

From that I doubt Elop understood how the World outside of Windows Desktop works. He maybe got some wrong impressions during his Microsoft years.

lala

@ejvictor

Hi, im not sure. thats why im asking.

vladkr

Hi, Tomi

You know, as we said in a previous post, its not a war of ecosystems, it's a war of PR and information.

Have you noticed that neither Apple, nor Google (nor Samsung, LG, HTC...) executives are as aggressive as Nokia's? Where is Finnish famous Sisu?

I don't have a mba, so as a simple guy, there are some things that are still shocking to me:

- already in February '11, it was obvious the new strategy wouldn't work. It was repeated again and again all over the year, but still, Nokia's head keeps the same way, like a stubborn donkey.

- Elop seems to show all Nokia's cards before the game; for example he said in February '11 that there will be a Nokia WP by the end of the year. Not only it's quite a long time to release a reshaped clone of existing Samsung/HTC phone, but it also gave time to competition to prepare an answer.

Same with Pureview technology, that will be released in Greenland and Tonga Islands, with a promise that Windows will integrate the technology sometime at the end of the year; again it's a long time for competition to prepare.

You can notice that Apple is much more discreet (and usually successful about its future products)

- WP8 and tablets: A French aircraft manufacturer used to say that in industry, there should be evolution and no revolution; common sense in industry tells that one shouldn't make more than one evolution at a time.

With tablets, Nokia will make many changes at a time: New OS, new hardware, new market... that's many unknowns in the equation, and a risk if at least one part of this strategy fails.

So to me, all this is quite illogical, so if someone with a MBA can explain it to me, I'll go to bed smarter tonight.

Now Skype: What's attractive with Skype, is that it's free (Skype to Skype) or cheap (Skype to phones) and I can understand it doesn't please operators. Then, the offer Microsoft is about to make to operators - charge Skype traffic - will make this application useless. So MS is killing Skype as well.

Finally, I'm a bit disgusted about all what happened around the ASM... there is too much dirt around it. So many lies, disinformation, aggressiveness. It makes Nokia even less reliable to people.

As I told Tomi once, Nokia reminds me of Soviet-Union; it was once quite powerful, but rotten by lies, bad management and brainwashing. No doubt it will end like SU.

Maclaren

@Tomi,

I think I'm missing something critical here. If operators are so antagonistic toward Nokia and Microsoft, why do they not seem to be the least bit antagonistic toward Android manufacturers and Apple for releasing phones that can also run Skype? Is it all just because Microsoft owns Skype?

I have a hard time making the link between the black-and-white situation of operator boycott of Nokrosoft but not Samsung and Apple, and the very grey situation of Skype being "owned and integrated" vs. just "made freely available for user installation from the app store". Can simply owning Skype cause this much push-back?

cycnus

@Maclaren,

I'm not tomi, but I was wondering if my guess were correct
In Apple & Android, it wasn't Apple and Android fault they have skype, and Apple and Google also not getting a single dime by it.
In Nokia-MS, MS will benefit (get $$) from the skype in phone while rendering the carrier to be dumb data-pipe that don't have any power.

Carrier have notice that in voice/sms they were important because changing carrier means changing number (not all country have the number portability law). But for data only (no voice) such as using mobile internet for notebook, they were not really important. only price and coverage that really matter. So, they don't believe in Nokia-MS BS.

I was wondering if nokia can survive until the next shareholder meeting, or what interest in journalism on the next meeting.

cycnus

@Tomi

I was wondering if LG drooping WP7 also because carrier hate toward WP7 things, or carrier mostly hate Nokia because Elop acting arrogantly like he is the CEO of MS-Nokia.

Joe

What is most surprising to me is how much marketing BS the CEO is feeding to the shareholders of his company. If a startup CEO tried to play this game with his Venture Capital investor for example, the investor would rip the CEO in half mid-air. Yet the Nokia CEO seems to be getting away with it, at least at the meeting, even though there is so much more money involved.
As Tomi wrote, only Helsingin Sanomat seems to have picked up the real info behind the words, so I'm curious if this is common that investors are treated like this at ASM of large companies and that the CEOs get away with it, or if it is just with Nokia that this can be done?

Peter

nokia board of directors are just a gang of criminals by claiming "nokia has the right team, right strategy and right product" when everything is in fact opposite.


FACTs are:
Nokia talents (engineers and visionary executives) have gone;
Nokia windows phone Only strategy has failed completely;
Nokia Lumia phones are bug filled immature products, Lumia 900 is a disaster (unreliable wifi connection, worst camera among all its peers, missing bluetooth file transfer, no NFC)

-------------------
I told you one year ago, Jorma Ollila and Steven Elop are criminals , they needs to be sued and put into prison.

Now we need to add to new chairman to prison too.

Tomifan

@Tomi
"Who wants to be slave to Microsoft?"
I think correct question is "Why would Nokia want to be slave to operators?"
All your proposals aim to same thing: "do all that operators ask, don't try to think, don't try to profit." Considering your Nokia rescue plans, new strategies, for heavens sake - your proposal to next CEO!
And then of course Skype. Considering the preceding, it's impossible for you to admit that Skype could be a source of revenue. (Not saying thatit is, not claiming it would be. It *could* be.)
But considering something like that is too hard to you Tomi, isn't it?
(Judging from what I've seen happening to all Skype problem criticising comments, I assume this comment will get deleted. Better start timer to see how long it gets to live.)

vvaz

@Maclaren

Operators are against Skype in WP due to deep integration of Skype and operation system including business cases.

With Skype/MS-Office/Exchange/SharePoint integration + Wi-Fi widely available in business areas it is quite possible to imagine businessman with WP phone can completely vanish from mobile operator radar.

At the moment big chunk of operator profits comes from deals with corps which buy accounts/minutes for their operatives. If you look from outside those minutes are cheap and convenient but in fact operators can use them with discounts comparing to regular private clients because this is very inefficient use of spectrum by corporate clients. With widely used VoIP corporate clients can move significant amount of their minutes to net and use their resources more efficiently.

Scenario1: corp has deployed wi-fi in their offices. Now A can use mobile phone to call B which is in the same building without using minutes from operator account.

Scenario2: A is at home. He has Wi-Fi - very common scenario - and calls B also at home with Wi-Fi. In this scenario call automatically is going through Skype and it is even better for corp - cost of connection is covered entirely by employees, even when they used mobiles issued by their employer.

Scenario3: A is in delegation abroad. In hotel he get Wi-Fi for free or peanuts. And in this case operator loses fat roaming charges.

cycnus

@Peter

All WP7 phone also couldn't do 2 way USSD which is very important in SEA (south east asia):
1. for banking purpose.
2. for registration of the new user (user must register their new SIM card with 2 way USSD)
3. for purchasing carrier services (ex. daily/weekly/montly internet, purchasing cheap minute, changing package, etc)

Tomi T Ahonen

Hi zlutor, Yousif, vvaz, ej, TCB, Shavy, cygnus, Spawn, lala, vladkr and MacLaren

zlutor - thanks! got it, corrected it. My eyes are all cross-eyed from writing this article last night and editing it on the plane..

Yousif - I really appreciate it, and haha, funniest was the two Nokia PR people, whom I both sent individually to come here to read the full blog and tell me what part was misquoting Elop, and neither could point to one quotation as not correct.. (and yet they insist it is ME who has to apologize to THEM? haha)

vvaz - haha, I'm way ahead of you on that... :-) Nokia seems to have brought its own army of dirty tricks over from Microsoft, judging by past year or so of their shananigans.

ej - good point

TCB - very good points, and on the PC side the MS story is far better known (my tech roots are there, hence I remember it well). On mobile MS did tons of damage in the Windows Mobile space ruining partners, but because WM was never that big, and happened 'before the iPhone' haha, so it happened in ancient history for many, people forget. The CEOs of operators are not spring chickens. They've often been in this business for 20 years etc, and have very long memories about who plays nice and who plays nasty.

Shavy - thanks! I really appreciate it. I try my best haha..

cygnus - cheers! Again, I really am not that bright, its just that I've collected a lot of knowledge specific to the carriers/operators and their strategies and met with so many of their top guys, I really do know how the carrier community thinks about some things haha, especially existential threats like Skype :-)

Spawn - haha, so true. Its like a monster movie, you know, totally unrealistic, where the monster asks the children to let the monster into the house to come and kill them, but pleads very nicely while outside the door...

And you make a perfect point, Ballmer has no idea how the rest of the business world works, outside of the monopoly called Microsoft on the desktop. If he was running a normal business, like a car manufacturer or airline or telecoms operator or handset maker, he'd be bankrupt in a week haha.

vladkr - yes, you are so true, or perhaps one of the fronts of the big tech war, is the PR battlefield. Previous Nokia management, especially under OPK, was inept at that war, and even when Ollila was at his best, he was nothing like a Steve Jobs haha.. I wrote when Elop was coming in, that one of the things Nokia needed, was a good communicator, who can better explain Nokia's complex industry and why it actually is (was) doing quite well under complex and confusing times. But what I did't expect was that Nokia would hire such a blatant straight-faced liar as Elop has turned out to be.

Obviously I agree totally with the comments about Apple, Google, Pureview, etc. And very good point that Skype is a dilemma. In the current form, it is unacceptable to the carriers, but what Microsoft now suggests they do to Skype, makes it useless to consumers. So whats the point haha..

And yeah, I rememmber you've mentioned the Soviet Union analogy in the past, and unfortunately Elop's recent actions suggest he is moving ever more into that direction.

Maclaren - hey, great question! Yes, you understood correctly. Skype has existed for more than a decade in telecoms, nearly ten years now on mobile, and on consumer smartphones for many years on many platforms. Its not Skype that is the problem by itself. It is Skype's size as a company, and its reach, and its service portfolio - when that is combined with Microsoft's money, and the PC based desktop. Skype alone was hated already. Now with Microsoft it is despised. But don't worry Maclaren, give me a bit of time, I'll write shortly a blog explaining the big picture of what are called OTT provider and their business, and what operators/carrier think of it. They dislike Blackberry messenger. But they fear iMessage more. They truly freak out about Microsoft empire plans around Skype. And trust me, operators will pick the lesser of those evils every time. Microsoft has zero chance to make it work now in mobile, no matter how popular Skype will be on Windows 8 on the desktop and tablets etc.. But I'll explain in a full blog about it soon.

Keep the discussion going, thank you for the nice comments

Tomi Ahonen :-)

cycnus

@Tomifan

Because being a slave of operator can fill your stomach
whereas microsoft is biting the hand that feed them...
that's why they were called the evil empire, look at sendo, htc, lg, sony....
also look at novel, netscape, dr. dos, OS/2.....

cycnus

@Keilanemi

For the guy like tomi
Any publication is a good publication
LOL

Peter

@tomi,
can you also look into NSN issues ?
why NSN lost $700M (nokia part,$1.4B) with in one quarter which is bigger than nokia device/service . Right before Elop was brought inot nokia by Jorma, NSN made a small profit.

It looks now very obvious that Steven Elop was brought into nokia to dismantle it. It even doesn't server MS's purpose. The only explanation is Jorma Ollila has been working for Wall Street Short Seller.

Jorma Ollila is no Steve Jobs.

Tomi, I hope you can wake up, your Finnish hero/boss has actually been a crony agent of Wall Street Bankers.

Peter

ejvictor

Lets not forget that Skype also eats into the holly cow - MMS. Real war happening -look at Spain. Telefonica launches its own VOIP app Tu Me.... TeliaSonera is taking the bold step of charging subscribers for using voice over IP (VoIP) services, after net income dropped 18% year-on-year in the first quarter.

The firm (TeliaSonera)plans to start charging for VoIP in Spain by mid-May, and will levy the same charge on new subscribers in its home market – Sweden – from the summer. President and chief Lars Nyberg says the change is necessary to address changing customer behavior that has seen a drop in voice and messaging revenue, and is a natural evolution of its current strategies on data pricing.

So Vatar

I understand why Skype is mentioned so prominently in this blog post, but I would warn to see WP's and Nokia's failure to blame primarily on Skype.

Skype is just one thing that makes WP / Lumia / Nokia unattractive to customers (carriers and consumers). If WP were flawless Skype alone would not bring it down. But as WP has so many flaws (being a MS product is in my view one of the flaws, but this is my personal view and other people might see this differently) WP is really attractive only for a few customers.

If I want to be locked down, I take the Apple (is cool, much better integrated, and backed by a company with so much cash they will for sure stick around for many years to come).
If I don't like Apple but want many apps, I go Android. Android evolves quite nicely, and if I wanna tinker I can do almost everything I can think of.

So, what space does MS / WP occupy? More locked down but less cool? Ahh, yes, if I do not see enough tiles in my bathroom I can always look at a WP.

Poor Nokia, in addition to all the problems you have you now also need to help sell Microsoft's Skype to the carriers that don't want it.

Stephen Reed

@Tomi

I did not actually understand how much - and why - the carriers/operators hate Skype until reading this very excellent post.

I do recall that Skype devastated international voice carrier profits years ago because the tariffs were so high and Skype was free, given an internet connection between the two parties.

Now Microsoft wants to integrate Skype with the desktop in the same manner as say ... its Internet Explorer web browser. That means that every laptop/ultrabook shipping with Windows 8 - hundreds of millions - should be able to use the built-in camera, microphone and speakers to communicate, for no additional charge, given a wifi connection between the two parties.

Every time someone uses Skype, from a desktop, laptop, or Win 8 tablet - they are denying the carrier/operator the profit that they would otherwise obtain from a voice call.

Skype also has instant messaging that does not use SMS.

----------

But what about Apple's Messages app? Between Messages users on any Apple device, the iMessage protocol uses data (i.e. like XMPP) not SMS. Apple positions Messages as a walled garden that precludes integration with other instant messaging services - encouraging Apple users to get their friends to buy Apple devices. I suppose that carriers/operators do not like Apple because of Messages!

But Apple does not have huge desktop/laptop sales compared to Microsoft, and Apple Messages does not have the long history compared to Skype. Thus I suppose that carrier/operator hate for Messages compared to Skype is simply a matter of degree.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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