COMMENT
silicon.com's Natasha Lomas visited O2's Slough HQ recently to catch up with the UK head of the operator, Ronan Dunne.
In the second part of our exclusive interview, Dunne reveals his thoughts on the 3G's killer app, whether NFC on mobiles will take off and O2's LTE roadmap.
To read part one of the interview - where the O2 head discusses how the operator landed the iPhone contract, and on working with Steve Jobs - click here.
Is growth in data the answer to getting a return on investment for 3G?
3G return on our investment is not only about data it's about voice and data.
Two things about 3G. It's a much better data carrier than 2G - both in the context of speed and the cost to carry but it's also a very effective voice carrier as well and a cost effective voice carrier as well. So over time as we've seen an explosion in usage, we've seen as big an explosion in the usage of voice as we have in the usage of data. Our voice traffic grows something like 20 per cent per annum compound, year after year after year.
Now data is in an explosion at the moment where we doubled the amount of data in our network in the last six months but it's a hell of a lot of catching up to do with the sort of growth that we've seen in voice. And a huge proportion of all of the operators' revenue still comes from voice and will continue to.
People ask this year - what's the killer app on 3G? You know what the killer app is? It's voice. Not great for writing headlines but it is. Voice usage is just growing exponentially. It's fantastic.
How will a mobile Oyster wallet phone get off the ground?
We're putting a forum together because for adoption we would want as many handset manufacturers as possible to participate and we would want as many providers of services to participate - this is not about having a niche and saying we've got one handset manufacturer and one network operator and one service provider… and we're going to close ranks and close this in.
This is something that's a bit like cross-network texting. When we first launched texting you could only send texts to people on the same network and people debated about should we do interoperability. As soon as we did, the volume of activity just went through the roof and all of the operators benefited.[…]
This is an area where the technology is absolutely mature and ready to go…It's robust it's deliverable today. It's now about working with the widest possible group in the NFC forum to get people to start to deliver the capability to leverage that technology - whether it be point of sale, whatever the case may be.
And when?
We're dependent on all of the other providers so it would be a decision by Transport for London about what they want to do with the Oyster card and that may be delayed by some local difficulties they're having in that space at the moment…We've not set down any specific milestones that we expect to pass at this stage. What we want to do is get the forum together first and define what the art of the possible is. […]
What are the biggest barriers to implementation?
Er, I would say priorities. If I look at the current environment over the next two years if I'm a financial institution, what are my priorities on product innovation against the backdrop of credit crunch and so I would say that in a lot of cases, [the biggest barrier to rolling out the tech is] what I might describe as access to the roadmap. Is this a big enough opportunity early enough for it to knock some other things off the list?
When people are cutting back on investment, we as a business - and generally as an industry - are very much in a growth and investment mode and we continue to do very well despite the fact that the economy has slowed down but different sectors will be impacted more than we will and that might slow down timing in some of those areas.
We - separately from but complementary to - NFC are working with the financial services sector on that whole area of payments and managing your money and electronic wallet and stuff like that, so we have lots of work that we're doing across that area and it's an area generally that we're very excited about. Some of those initiatives are not as dependent [as the mobile Oyster wallet] on as many other parties in the chain coming on board so I think there's exciting opportunities in that area.
Is mobile TV effectively dead in the water? There have been several UK trials but commercial launches have been very thin on the ground...
I think our strategic position on this is very much watch and learn. So we're keeping an active eye, we're keeping involved in all the technical forums and other things as the technology evolves. I think there's probably a place for a type of mobile TV - exactly which format and the model I think is as yet unclear. But five years ago, four years ago if you were asking the same question about mobile internet we weren't quite clear. Then we got the device right, we got the interface right and we got the tariffing proposition right and literally it was like setting light to straw, it went up in flames. It was just incredible response.
O2 has been accused of being slow to market - for home broadband and mobile broadband, for instance. What's the company's investment strategy?
Where there's customer insight that says there's an opportunity and an appetite we've always been there. That's why we're the number one in the market by a distance. What we don't do always is back multiple horses at races in regional race meetings in the west of England on a wet Tuesday afternoon. We have to focus, we have through Telefónica the ability to make lots of small bets around the world. And we do do that.
For page 2 of the interview, click here.
