Admittedly, this was not an easy year for us. Despite the fact that both companies were French companies, they represent different cultures, different technologies, and even a few different approaches to business. The main objective of the merger is to take the best of both companies and create a symbiotic relationship based on the synergy of our skills. As a result, we now have a broad range of high-end solutions and competitively priced products for large operators. With regard to our research capacity, the strength the merger affords can really be seen: since the merger, development in Moscow has significantly increased. This indicates that the company has been investing heavily in innovation and new technology solutions.

Doubling capacity, product line expansion and other investments are not a guarantee for success. For example, in the CIS market the SIM card is nearing saturation. Do you think the emergence of Gemalto is somewhat illogical in this context?

The doubling of resources is a strategic bet. The market is no longer growing at the rate it was a couple of years ago. But this does not mean that there isn’t an opportunity! The company's strategy is to provide end-to-end value,. This business is built around the SIM card, we aim to cooperate with our customers. In essence, the SIM card is the only thing that connects the operator to the subscriber. One of our main challenges is making sure the applications on the SIM card are bringing in revenue for the mobile operators while aligning with industry trends. Based on analytical reports, major cellular companies are actively moving to SIM cards with more memory to provide more technologically advanced and profitable services. We offer not only applications, but also a number of platforms and services. We have both production and support at the local level, thus launching a comprehensive approach that covers the needs of customers at different levels.

However cellular operators in the Russian market are wary of the revolutionary decisions, like a mass shift to a more technologically sophisticated SIM...

In any case, the fact that operators are starting to think of this now is promising. However, there are services that require not only money, but more subtle work on market segmentation and the vigorous pursuit of presenting information that is interesting to subscribers. To cite an example, during the World Cup Championship, we, along with a North African mobile operator implemented a very interesting project in Côte d'Ivoire. It allowed subscribers to bet on the outcome of a particular match, as well as get the latest news about the game. The response from the subscribers was an impressive 50% penetration of the service, plus an additional 2 euros in ARPU per subscriber. Of course, it was a very deliberate advertising campaign and local residents love the sport of soccer, but we love soccer as much as they do in Côte d'Ivoire! So, from a technological point of view, this service is nothing revolutionary nor does it require a large capital investment. Some flexibility is needed on behalf of the operator, its reaction speed, ease of use for the subscriber and partnership with a supplier of solutions.

Even last year at the 3GSM, mobile television was a big theme. Your company has introduced a new SIM card for mobile TV. What is the novelty?

Our SIM provides control and charges the user a small fee, i.e. it excludes the possibility of downloading uncontrolled content because it contains built-in DRM (digital right management). The future of mobile television in terms of digital broadcasting is, for example, ISDN or MediaFLO. Our solution allows the operator to safely communicate the rights and offer a wide variety of cooperation. Of course, the operators themselves have not properly learned how to reasonably position a mobile television service to their subscribers. Primarily, this question is addressed in the market place.

What innovative solutions emerged from Gemalto this year?

Forging a strategy for the enrichment of various additional features, we are continuing to develop the direction of multimedia cards. In the past year, our company has announced the entry of 1GB cards (the so-called Multimedia Full). Today, we promote these gigabyte SIM cards as Multimedia Ready. This product is the best option for a pilot project using multimedia cards. Under certain restrictions on a number of cheaply-supported devices, it does not require specific changes in the devices, but most importantly, gives a practical idea of how the MMSIM card might be useful.

Operators are primarily interested in the business cases behind such products. These SIMs must efficiently and effectively make use of the large amount of memory.

We already have several good examples. For instance, one of the services often launched with the 256k profile makes efficient use of the idle screen on the handset. When you look at a typical phone idle screen of an average subscriber, there is usually a manufacturer logo or a picture downloaded over a WAP interface. We’ve asked ourselves: Has the operator fully benefited from the use of this space, when its something their subscribers see everyday? This resulted in two ideas: First, to put the logos of the operator on the screen (which has already been deployed in Orange France). Second, and perhaps more importantly, to provide a set of on-screen services regularly used by the subscriber. This approach addresses several important issues. In particular, it increases the data usage by the subscriber and increases his loyalty. As you know, it is difficult to learn new habits and new handsets, etc. When a subscriber changes the phone, and their SIM card is inserted into a new handset, they have the same menu and experiences across all devices – he has access via the first screen to all his favorite applications.

Until now, the operators did not have VAS services strategies. Why is this only now becoming a strategy for success?

When we talk about applications for SIM profiles, it requires a certain level of understanding about the relationship between the operator and the subscribers. Unfortunately, before today operators did not consistently offer value added service packages and options to their subscribers. Often the launch of services was random – which did not contribute to a stable VAS cash flow. The idea behind offering a specific package of services launched on a new SIM profile on the other hand, allows the operator to offer solutions that result in their brand value being demonstrated over and over again to the subscriber. The subscriber is able to associate the services with the operator, and in turn remains a loyal customer – which contributes to a more stable cash flow from these specific services (offered via the SIM). Such an example of a service is CallerXchange, developed by one of our strategic partners. It works as follows: We just finished having a conversation on our mobile phones. I hang up, and see a pop-up window on the screen asking if I want to send my contact information to you. If I click “Yes” my contact details are sent to you automatically. I do not have to navigate to a menu or type your details using my keypad. One click solves all the problems. A similar experience occurs on your side. You are asked if you would like to add me to your contacts. Once you click “Yes” and agree to add my contact information, which is sent via SMS, my details are automatically saved in your SIM phonebook. Incidentally, I have control over the decision if I want to send me contact information, and you have control if you would like to add me to your phonebook. Another very useful feature: when my contact information changes, I am automatically prompted to send my updated profile to you the next time I call you, which you can save again in your SIM phonebook. Such a service is good for both the subscriber and the operator: First, it saves the information and second, it increases data traffic. One European operator was so pleased when we demonstrated the service that they asked for the test cards so they could use this application! I hope this service will be deployed by operators in Russia.

Sergey Skripnikov

This article was translated from the following original:

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