Mobile Communications, Expensive Nooo…

Wednesday June 21st 2006, 5:30 pm Printer Friendly Version
Filed under:New Business Models
Posted By: Mark Tluszcz

Every so often when I want to take the joy out of my day, I look at my mobile phone bill. I am struck by how ridiculously high the charges are in Europe. On average in Europe video calls cost € 0.5 per minute, voice calls cost € 0.25 per minute and SMS (texts) cost € 0.14, and these costs assume you are not roaming at which point an SMS can costs as much as € 0.85. Getting the sense that consumers are being taken for ride?

In my opinion, the mobile communications market offers tremendous opportunities for young companies to innovate. This sector has structural reasons why massive disruptive innovation is only a question of time. To name but three out of a long list: 1) inertia 2) fat margins and 3) massive user base.

Of course, when most talk about innovation in the mobile space, we generally hear about things like gaming, social networking, and video sharing. These are naturally areas where innovation will also flourish and I strongly believe that their time is coming, but why forget communications?

I encourage entrepreneurs to set their sites on the mobile communications space by offering products and services which greatly reduce costs while broadening the mobile communications user experience. I think for those who dare, you will not be disappointed.


7 Comments »

  1. Mark, We’re working on it.

    Comment by Chris — 6/22/2006 @ 4:16 pm

  2. Old industries will not give up their market shares so easy. And you are talking about real life. Changes do not happen so fast there. You need a lot of investment and time, to be able to concurrate with big telcos, which are mostly protected by government/laws.
    Skype is a small company, nearly unknown in real world. And all the closed/encripted protocolls, unidentifiable transfers and firewall-tunneling will not make it more popular.

    Comment by ghost — 6/23/2006 @ 2:53 pm

  3. Hi Mark
    I COMPLETELY AGREE WITH YOU THAT THERE IS A TIME FOR YOUNG COMPANIES TO INNOVATE IN THE MARKET. TILL THEY DON’T COME WE ALL WILL KEEP ON PAYING THAT HEAVY BILL FOR OUR MOBILE AS IT HAS NOW BECOME A NECEESITY FOR ALL OF US!!

    Comment by John — 6/24/2006 @ 7:53 am

  4. Mark, while I agree completely that charges in europe are too high, per-unit pricing may be misleading because many offerings include a large amount of flat minutes and texts. When I convert my current rate to price-per-minute, it comes down to 0,10 euro/minute and 0,05/text. Thats for Germany and while these prices are still high, the margins are not fat, especially when considering that my phone was subsidized quite a bit. I recently spent some time in Austria and there you can get provider-internal calls for 0,01 euro/minute. Austria is a small, crowded market, so competition works there.

    Comment by ingo — 7/2/2006 @ 12:56 pm

  5. Mangrove’s Tluszcz On Opps In Eastern Europe And Mobile Services…

    Mangrove, the young venture capital fund that is best known for being a Skype early backer is quite secretive about its activities, but one of its partners, Mark Tluszcz, has started to write occasionally on the corporate blog of……

    Trackback by alarm:clock euro — 8/14/2006 @ 6:56 am

  6. Mangrove’s Tluszcz On Opps In Eastern Europe And Mobile Services…

    Mangrove, the young venture capital fund that is best known for being a Skype early backer is quite secretive about its activities, but one of its partners, Mark Tluszcz, has started to write occasionally on the corporate blog of its……

    Trackback by alarm:clock euro — 8/14/2006 @ 7:02 am

  7. Completely ridiculous…. the Skype model worked once…the teleco operators are still having a strong control of their pricing. The niche market for those who care of the price are teenagers…I doubt that companies and business men are concerned about the SMS or MMS pricing

    Comment by Peter — 8/15/2006 @ 1:24 pm

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