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Vodafone's $7 billion bet

GigaOm’s Katie Fehrenbacher expresses disbelief at Vodafone CEO Arin Sarun’s assertion that mobile applications and social networks will account for 10% of Voda’s revenue in the next 3 to 4 years.  By her calculation, that would be about $7 billion by 2010.  That’s an astounding number.

Hypothetically, how might Vodafone accomplish this?  Advertising revenue, and music downloads are the two obvious candidates, but what if the use of that social network actually increased voice traffic as well?  What if the social network became an empowering tool for contacting your pals on their mobiles?

Just a thought.

{ 4 comments… add one }

  • Sajith November 23, 2006, 9:03 am

    Hi Alec, Voice will not be a source of this increased revenues since voice ARPUs will only go down as the trend is towards flat rate voice pricing. However other sources of revenues might emerge. Tomi Ahonen's blog (http://communities-dominate.blogs.com/brands/2006/11/cyworld_insight.html) has a fascinating look at Cyworld and some of the ideas there might be implemented at Vodafone. He has also come up with a $3.5bn figure for revenues from Social networking today here – http://communities-dominate.blogs.com/brands/2006….

  • Paul Jardine November 24, 2006, 2:50 am

    Of course, if Vodafone's revenues were to half over the course of the next few years, then 10% would be a much smaller figure! perhaps Arin Sarun isn't telling the whole story!

  • Vijay Anand November 24, 2006, 7:31 pm

    I would say that mobile operators can bet on two things in the near future: wireless data networks (using GPRS & EDGE), and access to their directory of all the users they have.

    Eventually voice will start flowing as VoIP over GPRS connections, so having a flat fee wouldn't help at all.

    The sooner they embrace this fact, there are plenty of interesting business models to look at. But the cold fact is that, no matter how you look at it, the operators wont make a dime without collaborating with the other players, especially the ones who are building the applications and services – but thats the way it is happening right now anyways..

  • john smith February 27, 2007, 3:06 pm

    Just a note. His name is Arun Sarin, no Arin Sarun. Goes a long way to being credible if you get the names right.



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