In a basement with a low ceiling and bad acoustics at the bottom of a funky record shop in London’s Soho, the mobile operator Blyk announced its official launch today in the UK. The idea of a group of seasoned, suited-up telecoms and media marketing executives talking about their new business in such a venue highlights some of the challenges that may lie ahead for this newest of MVNOs. It offers 16-24 year-olds a free service in exchange for receiving advertising on their handsets, but have these guys really got their fingers on the pulse of what people this age want out of a mobile service? Some more details on the launch:
– Age-ism be damned: Users have to be aged between 16 and 24 years old to sign up and get the service for free; currently it is not open to older or younger people. If a user gets too old, he/she will have to pay for the service.
– No retail presence: Marketing for the service will be done directly to consumers and initially invitation only. This will include promotional materials in “fresher packs” given to first-year university students; and invitations that current users can extend to friends. Leif Fagelstedt, the COO and MD for the UK, says there will be other marketing strategies on the cards but will not specify what these will be. The service is SIM-only. “Most users will already have handsets,” says Fagelstedt, although users can buy a phone through Blyk if they choose to–although there are no direct deals with vendors for special phones, and Blyk will not offer handset subsidies. Blyk says that it has a network of 60,000 retail outlets for SIM card top-ups.
– The deal: Users agree to get 6 text messages a day from Blyk, as well as to fill out some profiling information as part of the sign-up and opt in to some SMS polling. In exchange they get 217 free text messages and 43 minutes of voice time per month, with the option to pay for more. One example of the tariffs: data surfing is charged at 99 pence/minute.
– Addressable market: In the UK there are 6.5 million people aged between 16-24; Blyk says that within that 4.5 million currently use mobile services within the range specified in Blyk’s basic call plan. Fagelstedt said currently that age bracket has mobile penetration “upwards of 95 percent” and that some 85 percent of that is on a pay-as-you-go service so it will be about playing on customer churn with other operators that target that age group such as Virgin Mobile.
– Advertisers: “We don’t call it advertising; we call it valuable communication,” said Pekka Ala-Pietila, the CEO who previously was the president of Nokia (NYSE: NOK). Blyk is launching with 45 “recognized brands” as advertising customers. Some of these include McDonalds, Coca Cola, Sony (NYSE: SNE) BMG, Borders Books, Adidas, and Disney’s (NYSE: DIS) Buena Vista Intl. Fagelstedt told me these are all paying customers as of today (for the trials held up to now their ads ran free of charge).
– Fees: Regardless of their size, Blyk will charge advertisers 20 pence for a picture message, 5 pence for a text/response message, and 2 pence for some tagging at the bottom of a private SMS.
– Mobile content: Fagelstedt says Blyk has no interest in developing mobile entertainment services and will restrict its own involvement in mobile content to developing a social network around Blyk users. No announcements of link-ups with other social networking sites for Blyk cross-marketing. And despite Blyk’s Nokia-heavy pedigree (in addition to the CEO many of the other top execs also hail from the handset giant) there are no plans to integrate Blyk services directly onto phones as an off-deck service.
– No further details on other European launches. Fagelstedt confirmed it is speaking with Orange, Blyk’s network partner in the UK, for other countries, “But we are talking to others, too.”