Twitter Finds Now It Has The Leverage On Mobile Operators

from the oh-so-now-you-want-to-be-my-friend dept

Mon, Mar 30th 2009 11:16pm — Carlo Longino

One issue that's constantly popping up these days is friction between distributors and content or service providers. Companies on either side of the equation often overvalue their contribution, whether it's movie studios thinking they have the leverage over Netflix, or ISPs thinking they've got the upper hand over the likes of Google when it comes to net neutrality because they "control" the pipe. The content or services are worthless without the distribution; without the content, the distribution is worthless. It's not the case where one side always has the power, and often over time, the balance of power shifts. Such is the case with the news that Vodafone UK has enabled Twitter SMS services for its customers. Twitter irritated some of its international users last year when it stopped sending them SMS updates because of the costs. It's a pretty typical story in mobile: if you have a service you want to offer to users via SMS, you've got to be prepared to pony up the cash to mobile operators to reach "their" customers. When Twitter was a nascent service used by web dorks and media types, somebody like Vodafone wouldn't care about it. But as the service has gone mainstream, suddenly it behooves Vodafone to strike a deal with Twitter, make the costs workable, and be able to offer the service to its customers. The mobile industry has long engaged in these stupid battles over who "owns" the customer. Typically, the operator's take has been that they own the pipe, so they own the customer. But maybe they're finally figuring out that without any compelling services to travel through it, the pipe's not such a big deal.

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Filed Under: leverage, sms
Companies: twitter, vodafone

6 Comments

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Joel, 31 Mar 2009 @ 2:03am

We are not a set of pipes
On a related note to Vodafone but not Twitter. Vodafone has been on record that the mobile carriers "do not want to just be a set of pipes". This statement was given when Nokia announced that Skype would come preloaded on their new N97 device later this year. Thus effectively making Vodafone and other carriers just the pipes with calls going through Skype. Carriers do not like this because they have their own content and programs that they would like to push onto "customers" so that they can keep them for as long as possible.
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Comboman, 31 Mar 2009 @ 5:17am

free service?
If Vodafone was providing free SMS service to their customers then they might have a point and should be charging Twitter; however I'm pretty sure that's not the case and they just want to charge twice for the same message (the sender and receiver).
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Weird Harold, 31 Mar 2009 @ 6:32am

Even if Vodafone passes those messages for free, they will find a way to make up for it. It is very naive to assume that any carrier will just eat costs just like that, especially for a third party app. Perhaps tweets with ads?
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greg, 31 Mar 2009 @ 8:43am

I thought Twitter was still about Web dorks and media types.
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Anonymous Coward, 31 Mar 2009 @ 10:56am

Re: We are not a set of pipes
I really wish I had the ability to take over a major network and become just a pipe. I could just focus on building the best network and route the data appropriately. Since I'd be so focused on offering content I could keep my prices lower and still make mad cash.
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kirillian (profile), 31 Mar 2009 @ 12:22pm

Re:
@Weird Harold...Vodafone has already arbitrated funds for and paid for the ENTIRETY of the bandwidth used by text messages...yes, there is a cost, but that cost is actually associated with the cost of maintaining a cell phone's connection with the tower. All text messages are sent in between signals sent from tower to phone and back...this is just called making use of what you already have.

While it's true that this is not equal to free, it's also not truthful to say that the company is "passing on costs" when they charge either sender or receiver. The only way that could be true is if the mobile carrier lowers the costs for maintaining the phone's connection, etc. to balance out the costs between the two. THEN, the carrier could claim that it is "passing on costs". As it is, the carrier is charging more for virtually nothing (the servers used to store history of those messages are already set up to store that data - they store cell phone call data).

Currently, carriers provide this service for NEGLIGENT costs. This is good business for them, but it's biting them in the butt, especially with stupid moves like T-Mobile claiming that costs have gone up for text messaging, so it has to pass those costs on to customers. That's BS.

If they want to charge their customers for providing the service, no one is going to complain because it just makes sense to do so. It's even ethical. But Bull-Shitting customers is not and customers don't like that. I can't tell you how many of my friends are actually considering giving up text messaging altogether because of the hassle and stupidity of the carriers. I personally already blocked all text messages because I didn't want to fork over $10 a month for a text plan or potentially $40 a month for the 100 text messages that people send me that cost $.40 apiece. So, I had my friends learn how to send their texts to my email address instead. Not a solution for everyone, but I was tired of the charges, and I don't have $10 a month to spend like that...it's much better spent on other things.
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