3 November 2006

Goodbye, mobile phone bills. Hello, advertising. [International Herald Tribune]

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Pitching itself as the world’s first advertising-supported phone company, a Finnish company called Blyk plans to roll out a free mobile phone service next summer aimed at 16- to 24-year- olds, first in Britain and then elsewhere in Europe, writes Thomas Crampton in the International Herald Tribune.

“Crucial to Blyk’s system will be creating advertisements that attract users, said Antti Ohrling, co-founder of Blyk and chairman of Contra Advertising, based in Finland.”

“We intend on only advertising information that people want and in a fun way,” Ohrling said. “To succeed, we must offer an enjoyable and simple user experience.”

As one could expect, the company’s staff list is filled to the brim with former Nokia people, including its CEO Pekka Ala-Pietilä, a former president of the Nokia Corporation, and Marko Ahtisaari, its highly regarded director of brand and design, who is a former Director of Design Strategy at Nokia (and son of a former Finnish president).

But claiming an advertising supported mobile phone operator as a “disruptive and potentially revolutionising new medium” seems a bit much.

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UPDATE: 7 November 2006

Meanwhile Business Week picks up on the story. It also underlines the “gold-plated” make-up of the company. Apparently the billionaire chairman of the German software maker SAP is one of the investors. But the question remains: “Why are so many smart people backing a company that has no revenue and doesn’t even plan to start operating until next year?”.

The trick is in the advertising. “Messages will be targeted to users and be integrated seamlessly with the handset.” Advertising will “never interfere with the primary function of the phone” and “if you do it in the right way, it’s something people [will] find useful and fun.”

“If the company’s approach proves successful, industry watchers say, it could dramatically affect the mobile phone industry and pose a serious threat to existing operators.”

Though Blyk will function as a “so-called mobile virtual network operator, or MVNO, meaning it will market service under its own brand but use the wireless network of an operator still to be named”, the company still faces serious challenges.

“For example, getting young people to sign up for the service will be a challenge, as will the logistics of shipping customers the SIM cards they need to use, and making sure the technology works. […]”

“Blyk must also convince advertisers. […] It will be difficult to measure what effect the ads are having.”

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