mPortal Vizzavi has denied that Vivendi is considering pulling out of the venture.
European mPortal Vizzavi, a 50-50 joint venture between French media giant Vivendi and mobile operator Vodafone, has denied reports that it will ax 800 jobs. Vizzavi has also denied rumors that Vivendi is considering quitting the joint venture.
Yet while Vizzavi says uptake is on track, with over three million subscribers, it has undeniably suffered from problems. For a start, WAP has failed to set the world on fire. The connection speed on GSM mobiles is too low, and using the service is too fiddly. As a result, few mobile users have become mobile Internet users.
This would be less of a problem had GPRS not been delayed. Vivendi, which owns a majority stake in France’s SFR mobile network, and Vodafone, which owns majority or large stakes in 16 European operators, both fell behind schedule in launching the higher-speed 2.5G service. While GPRS has finally launched, handsets are still lacking and exciting content has not appeared.
Vizzavi is better positioned for success than its rivals, partly since since the delays and the general collapse in dotcom funding have hit rival independent portals much harder. Vodafone’s recent takeover of Japan Telecom, meanwhile, will give it early experience in 3G, which it should be able to transfer to Europe.
However, the future is not all rosy. 3G will be key to Vizzavi’s success, particularly since much of Vivendi’s content is high-bandwidth music and video. But the build-out of 3G networks will also be slower than originally expected. Perhaps worse, there may be capacity and quality of service problems with 3G, with Vodafone warning recently that it may only be able to guarantee 64Kbit/s – little faster than an analog fixed-line modem.
So there is a real danger that Vizzavi will not deliver on its promises. As a result – and particularly if (as many analysts expect) Vivendi sells its SFR stake – the joint venture could still come to an untimely end. This would leave Vodafone without a major content partner.
