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Mobile Economy Whitepaper: Reengineering Blyk's Business Model
Berlin, 24. January, 2008 - The Berlin-based management consultancy for mobile innovation, Mobile Economy GmbH, has published a new free Mobile Economy Whitepaper about the ad-funded MVNO bussiness model as currently commercialised by the UK Startup called Blyk. The author of the whitepaper is Jan Michael Hess, CEO of Mobile Economy.

Following is the extract of the whitepaper. The full PDF version including the spreadsheet can be requested for free by sending email to jan@mobileeconomy.de.

Reengineering Blyk's Business Model - How to build a profitable ad-funded M(V)NO and maximise Ad ARPU

Many people in our beloved mobile economy are excited about the new startup company called Blyk because it is the first ad-funded MVNO (Mobile Virtual Network Operator) in the world. Blyk launched in the UK on 24 September, 2007, and is targeted at 16 to 24 year-old customers only. Co-founder and CEO of Blyk is Pekka Ala-Pietilä, former President of Nokia Corporation (1999-2005) and Nokia Mobile Phones (1992-1998). Pekka’s supposedly strong contacts with the top management of many MNOs (Mobile Network Operator) will help Blyk close more beneficial Host MNO deals in 2008 and 2009 as Blyk plans to go pan-European.

Ad-funded MVNO with high Ad ARPU paid by advertisers

For the MVNO and MNO, the logic behind mobile advertising is simple: If you cannot raise ARPU (Average Revenue Per User) charging your customers for new value-added services, you better tap into the media budgets of advertisers that want to communicate with your customers. Thus an ad-funded MVNO is a company that finances a considerable share of its ARPU with money from advertisers. As pointed out below, I assume Blyk’s Ad ARPU to be higher than the Premium ARPU which is paid by users.

When it comes to optimising Ad ARPU, Blyk has set out to leapfrog the competition with a smart strategy: Create the first ad-funded MVNO that offers a big, though limited, amount of free voice minutes and text messages that is attractive enough for the target group to churn in. Secondly, let all Blyk customers opt-in by default into receiving advertising messages that are targeted to personal interests. As targeted ads have a higher value, it automatically increases Blyk’s profit margin.

This whitepaper is ad-funded by Mobile Economy GmbH, the Berlin-based management consultancy for mobile innovation. Since I am an expert in mobile advertising and MVNOs, I have decided to reengineer Blyk’s business model, share my findings and develop a number of strategy recommendations that might be valuable to Blyk as well as future ad-funded MVNOs and MNOs.

I believe that it is possible to build a profitable ad-funded MVNO. It is also possible for MNOs themselves to introduce ad-funded voice and data tariffs. You don’t necessarily need to build a new MVNO brand like Blyk to maximise Ad ARPU.

+ Welcome to Open Mobile Economy!
Berlin, 23.02.06 - Berlin-based Mobile Economy GmbH is a management consultancy focused on mobilising the Internet to enable the Ubiquitous Digital Lifestyle. We are working on an Open Data-focused MVNO Startup in Germany and look for international partners that want to join the Global Mobile Data Flat Rate Roaming Alliance to offer the Power of Mobile IP across the planet.

+ Mobile Economy Briefing: Japan, Korea and Open Data MVNO
Dublin, 21.02.06 - Mobile Economy Briefing: Japan, Korea and Open Data MVNO - Mobile Economy Briefing as PDF

+ mobiliser.org & mobiliser blog:
Mobile Economy publishes the online magazine mobiliser.org providing free intelligence for wireless executives. mobiliser's Chief Editor, Jan Michael Hess, explores the ubiquitous digital lifestyle in his mobiliser blog.

+ Mobile Executive Tour:
Mobile Economy produces the Mobile Executive Tour (MET) to Tokyo, Seoul and Shanghai-Beijing. MET is a guided, 1-week ubiquitous digital lifestyle experience loaded with 15-20 company meetings providing intelligence and business opportunities.

+ Booking:
You are invited to book Jan Michael Hess, CEO of Mobile Economy, to give presentations, moderate panels, organise company workshops or consult your management team during the development and execution of innovative marketing strategies targeting the early adopers of the ubiquitous digital lifestyle.

Bluetooth-powered mobile social network aka aki records encounters in the real world
Since a couple of days I am a user of the Berlin-based Bluetooth-powered mobile social network aka aki. I think aka aki is a very cool and super sticky application with a great future. Thumbs up to the 8 co-founders from the UDK (Berlin University of the Arts) for coming up with a mobile innovation that takes advantage of the unique mobile technology Bluetooth to enable a new form of intelligent encounters and meetings in the real world.