Over the past few days, we have witnessed a constant trickle of operators’ interesting offers and promotions in an attempt to attract and retain clients: Amena already charges all clients by the second; Wanadoo launches Spain’s cheapest ADSL connection; Telefónica initiates some thirty Voice over IP-based services; Jazztel publicizes the first 20 Megabyte ADSL connection…
It is no coincidence that operators are unfolding all their commercial arms at this precise moment. The growing popularity of IP telephony services and the Skype phenomena, the appearance of the first WiFi mobile telephone, the merger of Yahoo and Microsoft messenger services or the incorporation of the voice in instant messaging programs have something to do with all this. These and other services arising as a result of the convergence of platforms and networks pose a threat to operators’ profitability. These operators have to renew themselves on a daily basis in order to maintain competition levels.

In a world of “everything over IP” and flat rates, telecommunication operators can no longer “fatten up” their bills when customers consume more on traditional communication services. So, how can they maintain profitability?

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Title: Report on Spanish e-Commerce through organizations for forms of payment (2005, 2nd quarter)
Source: Comisión del Mercado de las Telecomunicaciones (CMT)
Date: October, 2005  
Abstract: In the second quarter of this year, e-Commerce in Spain grew 25% more than in the previous quarter. According to the report by the Comisión del Mercado de las Telecomunicaciones (Comission for the Telecommunications Market), between the months of April and June a total of 4.6 million operations were recorded, counting for a transaction figure of 393 million euros.
Over half this figure (215 million euros) is accounted for by overseas transactions originating in Spain. The European Union monopolizes the majority of takings (83%), followed by the United States (11%). However, the greatest increase (40%) was due to transactions performed overseas through Spanish websites; these amounted in total to some 62 million euros. In both instances, the most dynamic sectors were air transport (29% of profits) and travel agents and tour operators (13.7%); followed by art, sporting and recreational events (13.1%); and by transactions related to public telephones and phone cards (8%).

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Title: Internet en España
Source: Fundación BBVA
Date: October 20, 2005
Abstract: Some 63% of Spaniards claim that they do not use the Internet due to lack of interest or for economic reasons, while around 37% made use of it over the last three months. According to the BBVA Foundation’s report Internet en España (The Internet in Spain), there is a stark contrast between Internet penetration in Spain and the level of usage it receives in the United Kingdom (60% of the population) and Germany (57%). The breach in numbers is more noticeable among Spaniards of over 50 years of age (accounting for 59% of non-users), among those citizens who have received only primary education or less (79%) and among the medium-low or lower classes.
Of those who access the Net, the majority (97%) does so in order to search for information, and two out of every three make use of a search engine. Google is the first choice, with (88%) of users, followed by Yahoo!, lagging behind with 20%. The Internet is also employed as a communication tool. In fact, 84% of Internauts use e-mail to send a daily average of seven messages. The typical internaut profile is that of a 36 year old man holding a university degree and on a medium to high income. Twenty-one per cent of users do their banking by Internet, mainly for convenience and for the flexible hours of availability. Nevertheless, lack of confidence and a fear of “phishing” limit online banking. The fact that only 16% carry out online transactions indicates that users are still wary of online business.
The products and services in highest demand are those related to travel and recreation; in fact, 42% of online consumers have purchased plane, train or bus tickets; 23%, tickets for shows and events; and 20% paid for holiday hotel stays and other lodgings.

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India continues to be on everyone’s lips. Despite the emergence of China, Russia, or Eastern Europe as flourishing IT outsourcing markets, India continues to be the Mecca of IT outsourcing. According to Nasscom, the national association for the sector, 44% of worldwide IT outsourcing business went to India, in comparison to the 5% which went to China and Eastern Europe. And that’s not all. India’s businesses and professionals are beginning to excel/succeed in other areas aside from software development, such as the design of engineering and Business Process Outsourcing (BPO). These delocalized processes grow in volume and sophistication, and activities such as design, construction, analysis or production planning tend to figure among them. All this is because India not only disposes of the best software developers in terms of the value for money facture, but the country also has at its service a significant reserve of industrial engineers - professionals who are beginning to take charge of the entire process of searching for, planning and developing products and ideas first industry of product engineering services could double and reach a value of 53,000 million dollars by 2009. India will undoubtedly be an outstanding protagonist in the outsourcing of such services. In that country, an hour of engineering services costs 15 dollars, against 70 in the U.S.
The Dutch bank ABN-AMRO has signed an agreement worth 1,800 million euros for the management of its information systems. The deal involves five businesses, among them Indian companies, Tata Consultancy Services (TCS) and General Motors. Plexion Technologies offers design and engineering services to manufacturers such as Daimler-Chrysler, Ford, Volvo or Mercedes Benz among others. Harita Infoserve Ltd. Offers its services to General Electric, Hitachi or Motorola. These are only a few examples of companies already practising what is known as OPD (Offshore Product Development).
Asia’s “Silicon Valley”, Bangalore, and other cities such as Mumbai, Hyderabad or Kolkata (formerly Calcuta) are becoming important outsourcing focal points. The headquarters of India’s most important IT companies are based together in the technological parks of these cities, alongside the affiliates of Western companies such as Amazon, Google, Cisco and HP, to mention a few.

Articles in Business Week, Nasscom and Newindpress (registry required)

iPod video appeared on the scene a week ago in the US. In addition to being as “cool” an MP3 player as its predecessors, it offers the possibility of watching music videos and television programs. A wide selection of content will be available at Apple’s online music store, iTunes. With its 2.5 inch screen and 6-megabyte memory, the new device will allow the user to playback home videos –which can be exported to iPod video using Apple’s iMovie software— and can be connected to the television with a separately-sold cable. However, it is not only about advantages. The company has warned that in contrast to what can be done with songs, it will not be possible to record videos acquired at iTunes on one CD or DVD, not even if it is only to make a backup copy. 
Apple’s new gadget could bring about a similar revolution to that instigated by iPod’s arrival in the music industry in 2001. On that occasion, the company managed to revitalize a market that had suffered due to piracy and illegal CD sales; such a context facilitated the negotiation of content and prices. Nevertheless, the audiovisual industry is currently in a less critical situation. The downloading of films is not so widespread and studios are using a distribution model which allows them to redeem their content across a number of platforms, therefore preventing the possible complication of deals with the producers. For now, Apple has already come to an agreement with the American channel, ABC, to offer the series “Desperate Women” and “Lost”, making them available the day after they have been televised for 1.99$ an episode, and with Pixar, which will offer six of its factory’s short movies for the same price.
Although it is too soon to tell whether iPod will be as successful as its predecessors, players such as this or the Portable PlayStation serve as a testing ground to evaluate the reception of mobile video services in the wake of mobile TV’s arrival.

News at The Miami Herald
Articles in The New York Times (free registry required), Post Chronicle and Business Week

Amena and the TV producer, Globomedia, have just presented the series “Supervillanos” (Super Villains), the first Spanish TV drama produced exclusively for mobile phones. Amena customers who have a 3G terminal will soon be able to see the first parts of the series, to be transmitted in a total of 40 three-minute episodes. For some time now, Vodafone 3G customers have been enjoying “24: Conspiracy”, the first of such series produced by Fox. Mobile phone content was in fact the star product at the recent MIPCOM, the biggest international television, cable and satellite fair.
Meanwhile, the operator, Abertis Telecom, is currently sending out the first Digital Television (DTV) broadcasts to mobile phones. Testing, which began in September and will continue on into February of next year, is being carried out within the context of the European project “Celtic Wing TV”. The project’s main aim is to validate the European standard DVB-H (Digital Video Broadcasting-Handheld) for the reception of DTV on mobile devices. Telefónica Móviles España, Antena 3, Sogecable, Telecinco, Telemadrid, TV3 and Nokia are all taking part in this pilot program. Nokia has announced that its first DTV terminals for Spain will be dispatched next year.
According to a study carried out by Informa Telecom&Media, the year 2010 will see 128 million mobile TV users. DTV’s imminent arrival on mobile phones means an opportunity for the operators, who will benefit economically from the interactive possibilities on offer. But it also implies a challenge, given that the operator network is not required for DTV reception -there will be no profit there for operators- and that DTV content will present competition for the operator’s downloading services. The predictable deciding factors will be the price of these services and the users’ willingness to pay. In Finland, the first mobile DTV trials show that 41% of participants are prepared to pay for the services and that half of these consider a monthly flat rate of 10 euros to be a reasonable price.  

News at Libertad Digital, Navegante and 3GNewsroom.com