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Online Mobile Retail: What happens to the telcos?


In the past five years, the telco industry in the Philippines has become a “retail hub” for over the air downloads of mobile content including games, ring tones and other services. But what happens when companies release their own proprietary distribution hub?

Nokia, the most important brand in South East Asia launched Ovi at the Go Play event yesterday in Singapore. In the same way that Apple has their .Mac and iTunes Online Store, Microsoft has their own music store for th Zune. Nintendo has their shopping channel for th virtual console, Nokia unveils their plans for a portal by which consumers can avail of direct downloads of songs and games over their own proprietary portal.

This is a consumer boon — but what happens to the telcos (Globe and SMART in particular back here in the Philippines)? According to Vishal Gondal, founder and CEO of Indiagames, the telcos have become so-so when it comes to the promotion of mobile games. Usually, top tier games are the ones downloaded (those appearing on the top links of download portals). But what happens to the rest of the inventory of titles?

Ofcourse, telcos still provide the actual streaming service for downloads and earn from the data costs. But OTA downloads is the least popular choice in countries like the Philippines because most of the Philippine population uses a prepaid service OR are not really that educated about DRM-enabled music (piracy here is a big thing).

Ovi allows for downloads via PC or WiFi. Also, remeber that the new music downloads will be available at a higher bitrate of 192kbps, which is a much larger file compared to the smaller “optimized for mobile” 64kbps files.

Ovi promises to offer more value not just with downloads, but by merging the whole digital mobile experience with your desktop PC and your friends via online community support. Can the telcos challenge this business model?

By Jayvee Fernandez

Jayvee Fernandez is a tech enthusiast and sitting Techbology Editor for The Philippine STAR.

He is also an EAN certified SCUBA Diver and underwater photographer based in Metro Manila, Philippines. His photos and videos have appeared in various international and local publications including Random House Germany, Discovery Channel Canada, and CNN.

One reply on “Online Mobile Retail: What happens to the telcos?”

I guess content-wise, Nokia will have the upper hand over the local telcos, but price-wise, local telcos offer more affordable rates (or I could be wrong since the pricing of Nokia isn’t available yet)since it’s in the local currency and Nokia will presumably be in dollars since it aims to serve international customers. However, if Nokia comes up with a local pricing rate, competitive price and a no-hassle payment scheme, then maybe the local telcos should fear this jugernaut of a service offered by Nokia.

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