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Author: Vincent Poulbere
Orange has announced a new service called "Orange Messenger by Windows Live", developed in collaboration with Microsoft. The service enables Orange's customers on fixed and mobile networks (135m people worldwide) to communicate with the Windows Live (ex-MSN) community (240m people worldwide).
It allows instant messaging between Windows Live users on PCs and the Orange's customers who have downloaded the "Orange Messenger by Windows Live" software on their mobile phones or on their PCs. This software features the usual instant messaging functions such as group list and presence management, chat with one or more contacts. In addition, the PC application can generate PC-to-PC free VoIP calls, video calls and send SMS.
Orange's software also features additional Orange-specific services like the access to the Orange email account, Orange blogs and content such as ringtones and news of the day. The service is free on PCs. On mobiles, users will have to pay no the tariff details have yet appeared.
The service will launch in December in France and in 2007 in the UK and Spain.
This is a major move by Orange on the messaging front. Its in-house instant messaging service "Orange Messenger" has been up and running for several years already, but was open only to Orange's mobile and Internet customers. It's been clear for some time that the “walled garden” model is not suitable for instant messaging.
Orange is not the first operator to collaborate with Microsoft for interconnecting its instant messaging service with Microsoft's. Vodafone had made a similar move last year. The strategy for many operators - including Vodafone and T-Mobile - is now to collaborate with the Internet players instead of competing head to head against them. In this context, operators are trying to exploit assets such as their customer bases, their brands or their ability to specify mobile devices.
The big hurdle that prevented this happening earlier was that companies could not agree on a business model. The logic of the operator (i.e. to generate revenues from end-user traffic) and of the Internet company (i.e. to generate advertising revenues) were opposed. The lessons of recent agreements (Orange-Microsoft and Vodafone-Google) is that these companies have made significant moves to agree on development costs and revenue sharing.
With this deal, both Microsoft and Orange bring significant value to their customers. MSN is the biggest IM community in France. MSN Messenger on mobile is already achieving good success in Bouygues Telecom's i-mode service. There is though a big unknown, however: the pricing model on mobile phones, which will determine how attractive the service really is for the customers. We believe Orange could introduce unlimited usage subscriptions, in line with its recent introduction of mobile TV and sport content subscriptions.
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