Bertelsmann plans to launch a virtual mobile service in Germany.
German media group Bertelsmann’s eCommerce unit yesterday announced it is planning to become a virtual network operator in Germany. Chairman Andreas Schmidt said that the company would not be interested in merely running a mobile portal, when its brand name and content advantages would allow it to attract customers to its own virtual network.
Many firms have recently decided to leverage their brands to become virtual network operators. They rent capacity from existing mobile operators, provide their own-branded service, but use the other firm’s physical network to transmit data. The highest profile of these operators at the moment is Virgin. It already runs the world’s largest virtual network in the UK, in an alliance with Deutsche Telekom’s one2one, and is currently expanding into the Asian and Australian markets. Although Bertelsmann is talking to all the German operators except Vodafone, it is likely to ally with Deutsche Telekom, due to its stake in US operator VoiceStream. The US is Bertelsmann’s biggest market, and if the operation in Germany is a success it will make sense to expand it across the Atlantic.
But Bertelsmann’s business model is different. Not only is it leveraging its brand to make money out of mobile operations, but it will also be one of the first virtual operators to focus on mContent. Whilst this certainly features in Virgin’s long-term plans, it is the rationale behind Bertelsmann’s operation from the start. And it has rather more content to deliver than most.
It isn’t hard to see why Bertelsmann is eager to distribute its own content. The world’s largest mobile operator and the world’s second-largest media group have, after all, just teamed up to create an mPortal. The Vodafone-Vivendi Universal joint venture Vizzavi looked like it might lock other content providers out, thus limiting Bertelsmann’s role. But the ‘Germans’ have fought back. Along with its stake in online music giant Napster, creating its own mobile operator will allow Bertelsmann to compete with Vizzavi on equal terms – and without having to absorb the costs of a 3G license.
