4G licences only raise £2.34 billion in auction

It beggars belief that the UK Government has only managed to raise just £2.34 bn in licence fees for the the 4G licences.  It really does suggest that both the UK Government and Ofcom are totally disconnected either from the potential of the mobile internet market or they are totally incompetent at running an auction.  Whilst it was clear from the start that the market would not pay the astronomical figures paid for the original 3G licences of £21 billion raised by Gordon Brown,  the value of these licences should have achieved far beyond the Office of Budget Responsibilities own projection of £3.5bn, let alone the £2,34bn delivered.  Everything Everywhere, Hutchison 3G UK, Telefonica (O2), Vodafone (VOD) and BT (BT.A)'s Niche Spectrum Ventures secured the 4G licences.  It is a little disappointing that the winning bids all came from the usual suspects and that we will not see any new entrant to spice up the cosy market carve up between the major mobile networks and BT.


Given that the UK is one the largest mobile internet markets and combined with the superior quality of coverage and speed of performance offered by 4G’s 800 MHz network, the winning network providers and service providers stand to make significant revenue.  The mobile broadband should provide smartphone and tablet computer users with "superfast" download speeds, and will provide £20 billion of benefits for UK consumers over the next ten years, Ofcom said. 

However, when mobile operator EE, a joint venture between T-Mobile and Orange, became the first to launch a 4G service in October 2012 in a brief monopoly, it struggled to attract users. It was forced to cut its prices in January, lowering its entry price to £31 from £36 a month.

Despite this slow take up, I still believe that 4G has the power to become the de facto communications network for Internet access in the UK - a view clearly shared by BT - which is why they entered the auction to secure 4G capacity which they are using to extend their WiFi network.  4G has the capacity to be a game changer in technology terms and could change the local access in remote locations of 100 MHz Ethernet speed access reducing the need to take fibre to the home.

There may not be champagne corks popping in No 11 tonight, but I am sure they will be in the HQs of our major mobile providers.

The Appscape

Here are a number of interesting facts concerning the growth of mobile marketing and in particular the App market.

• Apple Apps – 700,000 (Nov 2012)
• Android Apps – 700,000 (Nov 2012)
• Microsoft – 120,000 (Dec 2012)
• 37mins the average time spent on apps per day
• Mobile apps will grow from a $6 billion industry today to $55.7 billion industry by 2015 (Forrester)
• The average Android smartphone user has downloaded 44 apps onto their phone
• 53% of American cellphone users now have a smartphone
• 38% of people who use social media on mobile devices cite general browsing as their main activity

The rapid growth of Android apps is very impressive, having caught up with Apple so quickly and will undoubtedly pass Apple in 2013.  The fact that Apple apply rigid "quality control" as to which apps make it on to the iPhone and Google pretty much set a minimum compliance approach cannot be the only reason Android has blossomed since Microsoft has failed to grow in quite the same way.  Apple need to decide whether they are going to carry denying other smartphone users the chance to use the Apple IOS and ultimately see the market they have owned slowly (or maybe not so slowly) eroded by Android as they did twenty years ago during the PC wars.

iPhone 5 Decline in face Samsung Challenge?

Sales of the iPhone 5 appear to be slowing dramatically in the UK and around the world. In what seems like a bid to drum up sales, for the first time I can recall, my mobile provider is making unsolicited calls to remind that I am due an upgrade and have the opportunity of getting my hands on an iPhone 5 as part of my package.  Previous it appeared I needed to be best friends with the chairman of the mobile operator to get such an offer.   Furthermore, according to the Wall Street Journal, Apple has cut an iPhone 5 display manufacturing order by half citing "weaker-than-expected demand." The display order, which was targeted for the January to March quarter, was cut along with other key component manufacturing in December.

Given the crowded marketplace that the smartphone arena has become, it is only good business that there should be changes to manufacturing orders.  However, this data seems to confirm that globally, Samsung is beginning to get the upper hand in sales of smartphones in head-on competition with Apple.  With 1.3 billion smartphones in use worldwide by end of 2012 and 465 million Android smartphones sold in 2012. Google’s operating system has now captured a 66% global market share.  Samsung has used the Android OS to drive sales with their latest smartphone the Galaxy SIII with shipments estimated to be 18 million units for the third quarter of 2012, while smartphone and overall mobile device shipments are projected at 59 million and 106 million units respectively.

Apple is rumoured to be accelerating the launch of the iPhone 6 to combat this growing Korean threat and thus it is of little surprise that they are ramping down iPhone 5 production to make way for a newer model.  Clearly being sued by Apple is good commercial business for Samsung since it has crystallized the belief that the once mighty Apple may have a worthy competitor in the form of Samsung.  Litigation can have unexpected consequences and certainly it seems it may be the case that Apples lawyers are better at marketing Samsung's products than helping their own side win.

Summary of the Latest Social Media Data.

I was recent required to pull together a presentation covering the impact of social media on search engine optimisation and as part of that exercise I extracted a collection of the latest data points on the three leading social media sites of Facebook, LinkedIn and Twitter.  All the data is referenced from the companies themselves or studies they have commissioned.

Facebook

• 1 billion – Number of monthly active users on Facebook, passed in October 2012
•  31% - Percentage of users that check in more than once a day.
• 135 million – Number of monthly active users on Google+.
• Facebook accounts for approximately 26% of referral traffic.
• 47% – Percentage of Facebook users that are female.
• 29% - Percentage of Google+ users are female.
• 40.5 years – Average age of a Facebook user.
• 2.7 billion – Number of likes on Facebook every day.
• 24.3% – Share of the top 10,000 websites that have Facebook integration.
• 4.7 billion minutes are spent on Facebook daily

LinkedIn

• 187 million – Number of members on LinkedIn (Sept, 2012).
• 44.2 years – Average age of a Linkedin user.
•  Highly targeted professional networked audience with 50% of LinkedIn users having a bachelor’s degree or higher
• LinkedIn accounts for about 0.20% of referral traffic.
• American users spend an average of 17 minutes on the site.
•  22 million visit LinkedIn every day.
•  There are 2 million companies on LinkedIn

Twitter

• 200 million – Monthly active users on Twitter, passed in December 2012.
• 1 million accounts are added to Twitter every day
• 9.66 million – Number of tweets during the opening ceremony of the London 2012 Olympics.
• 175 million – Average number of daily tweets sent throughout 2012.
• 37.3 years – Average age of a Twitter user.
• 40 million visit Twitter daily
• 307 – Number of tweets by the average Twitter user.
• 51 – Average number of followers per Twitter user.
• 163 billion – the number of tweets since Twitter started, passed in July 2012.
•  $259 million is Twitter’s projected ad revenue in 2012
• 123 – Number of heads of state that have a Twitter account.

The rate of adoption of these services remains an extraordinary phenomenon and have become key drivers of income for both themselves and a myriad of businesses utilising their technology and market concentration.