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Friday, 21 November 2008

Reputational risk for mobile operators

I really admire all these people that holds down a full time job, has hobbies and can publish a blog.. I am an entrepreneur; organiser/networker and I don't have time to go through all my daily emails. let alone blog. 

 

Good thing is that I did not managed to speak at G2E this week in Vegas, although it was an honour for me to be invited to speak on Frank Fahrenkopf's panel focusing on future of on-line gaming.  However, due to work commitments and meetings in London, I could not go.. we all can only expect some movements in US's remote regulations probably mid-end of 2009.. so, like the market, I am taking short term tactical decision to stay put in London, but then also manage to help chair couple of key panels at the 5th Annual mobile gambling summit of bullet business.

 

I feel I owe it to my Mobile Gambling Report readers ( iTV and mobile gaming gambling report back in 2006) to give them an update. 

 

Good news is that mobile operators are more progressive now and are finally looking at ways (& take concrete steps in) to monetising or bring value added services to their users.  For example, O2 had a gaming portal few years back, then Orange launched that a year ago and 3 six months before and Vodafone just launched this week with the dedicated gaming & betting portal. 

 

However, something that has not change, which is that, as I explained in my mobile gambling report back in 2004, mobile operators are in the “defensive game”, due to the potential reputational risk of getting too engaged with 3rd party casino gaming/gambling products.  (who can blame them when they have invested typically billions into infrastructure/licenses and brand)

 

This is in no reflection of quality (high standards) of remote gaming operators out there, in fact, there are many well respected, well run and socially responsible gaming gambling firms out there.  Their products and services are already available via the MNO's portal and or via their mobile internet service. 

 

Due to the potential reputational risk, MNOs would prefer to keep their distance and promote mobile internet usage than promote specifically any type of content (especially Casino gaming & gambling).  [I can understand though, as all we need is just one small bad apple, and likes of Mail get hold of it.. recipe to even move/influence governments, let alone fate of one mobile network operator.]

 

Therefore, the basis of competition between MNOs is still based on typical voice (now adding more than likely all-inclusive data).. therefore, seems to me they are still stuck in their own rung of the value chain, namely to provide mostly a 'pipe' offering. 

 

Yes, some are more keen on mobile search (via yahoo/google) or advertising model, indeed thats the easiest way to 'monetise' MNO's mobile portal.  They are however seeing big growth of data adoptions between the generation Y, due to the adoption of facebook and Flirtomatic applications, seems social networking rules. 

This is a one stop shop model, like in a shopping mall, where users can come and shop as they like and with whom they like (within reasons).

 

We also explored the various business models from partnership to purely advertising ‘pay per click’ model via the mobile.  Seems like it is rather fluid and depends on the preferences of a specific mobile operator.  None has a seamless and economically viable payment system, of course none would use subscribers’ credit to fund any gaming gambling.

 

Fact of the matter is that, none are as progressive as in Austria, where Mobilkom Austria part own PayBox which has apparently seamless integration to enable payment via users’ mobile telephone credit for payments of all products including gaming gambling. However, they manage the potential reputational risks by ONLY working with the national monopoly Lotterien (Win2day) and Bwin (previously betandwin).  So, its managed but better integrated.

 

I trust the real opportunity is in fact in the middle. How, who and when that can be achieved, that would be the question.  I may have an answer, but let’s chat more in person to see if we can convert that to a big and sustainable solution going forward. 

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