Blyk, the first free ad-supported pan-European mobile phone service, has gone live in the UK.
At a press conference in London, Blyk founders Pekka Ala-Pietila and Antii Ohrling said Monday that they have started offering subscribers 217 free texts and 42 free minutes in exchange for accepting MMS (picture messaging) and SMS (text) advertising. Customers will be charged for additional usage. Analysts have been generally receptive to Blyk’s plans, but some expressed skepticism over such a low quantity of free text and voice minutes used to lure paying customers.
“We wonder if some users will simply swap out their SIM card once they've used their free minutes to take advantage of a low-cost MVNO such as Tesco,” Ovum analyst Jonathan Arber said.
He also said it was likely that free texts and minutes would be used up quickly by customers, leaving many dissatisfied with the service. Analysts were also critical of Blyk’s move to use viral marketing to recruit customers. Viral tactics may not generate customer numbers as quickly as traditional methods, said Mr. Arber.
Blyk announced that 45 companies have already signed up to advertise, including Coke, Colgate, Ford, and McDonalds. Sony Ericsson is among advertisers in at the launch but not Nokia, the company Mr. Ala-Pietilla headed up before creating Blyk.
Announcements of additional European countries are expected before year’s end.
After free texts and minutes run out customers will be charged 10 pence (20 cents) each for texts and 15 pence (30 cents) a minute for calls. Relatively low-cost campaigns held at university events will be used to attract customers, but being accepted will be contingent on volunteering personal information useful to advertisers.
Blyk is a so-called MVNO (mobile virtual network operator), although it owns most of the network equipment. In the UK Blyk uses France Telecom subsidiary Orange as its carrier. It is talking with 12 network operators for carrier services outside the UK. The company is keeping tight lipped about where it will announce service next, but Germany and the Netherlands seem likely contenders because of the potential margins for Blyk given their liberal regulation of MVNOs, low wholesale charges for network usage, and their dynamic advertising markets.
The cornerstone of Blyk’s approach is knowledge of the customer, said Mr. Ala-Pietila. “We are as much a media company as a mobile operator,” he said.