Vodafone embracing its destiny as a pipe

By September 28, 2010 5 Comments

There is an article on the front page of the Financial Times business section today which reports that the ‘architect of Vodafone‘s push into internet services is quitting amidst signs that the mobile phone operator is retreating in its battle with Apple and Google over the wireless web’. He follows a couple of other recent departures of high profile individuals who were involved in Voda’s push to add a software and services line to their network business, including e.g. Tommy Ahlers, founder of Zyb the mobile social network Voda bought a couple of years back.

I have been pleased to see that Vodafone is turning away from ambitions to compete with Google and Apple as well as the numerous startups in this space, although for many industry observers the shift has been a long time coming, maybe too long.

I say that for three reasons:

  1. They were never going to succeed in building great mobile web services – partly because they lacked capabilities and partly because they were hobbled by the fact that their services would only be used by the small fraction of the global population who are on their network.  This limitation of audience limits the amount of investment they can profitably make when compared with global competitors and it also undermines the quality of socially oriented services.
  2. Many of the global competitors I mentioned in (1) were startups who found themselves in competition with the owners of the networks they needed to use and with customer bases they wanted to access with the result that they found their businesses stymied.  Hopefully mobile operators will become better partners now.
  3. The operators will now focus on network quality and innovation which should enable startups to offer more new services.  In the title to this post I said Vodafone is embracing its destiny as a pipe without specifying what type of pipe.  Their opportunity now is to be a smart pipe and maintain margins by offering great APIs in areas like location and billing.

On the wired web the confusion between network operator and service provider disappeared a long time ago I think to the benefit of all parties.  It is good to see mobile going the same way.

Enhanced by Zemanta