Nokia and Vodafone Unite for Services

Just days after the global launch of Googles mobile strategy, not wanting to feel left out, the worlds biggest handset maker, Nokia, and the worlds biggest mobile provider, Vodafone announced a content and services deal.

Centered around Nokias Ovi platform and on Nokia handsets, the two firms have agreed to jointly offer mobile services including internet services, content and browsing. Vodafone will also get exclusivity of some Nokia handsets.

“This is beneficial to both parties,” said a Vodafone spokesperson. “The integrated Vodafone suite of services, combined with Ovi on the Nokia handsets will mean we can bring our customers a much wider choice of content at the touch of a button. Customers want a different range of services which we can now offer with Nokia—it was a logical next step in our relationship.”

This marks a change for Vodafone, which had previously wanted to maintain its own revenues from its own content services, known as Vodafone Live. Nokia has spent the past 18 months building up and investing millions in its software and services portfolio, making acquisitions and deals, culminating in the launch of its Ovi portal earlier this year.

Emma Mohr-McClune, principal analyst of Wireless Services Europe for research firm Current Analysis, said the mobile operators were wary of the Ovi platform, believing it was a direct rival to their own content services. “Everyone wondered how Nokia would convince the operators to buy into Ovi, so Nokia has been furiously negotiating with the operator community.”

To read about why Nokia says the door is still open for a deal with Google, click here.

This resulted in a deal announced several weeks ago with Spanish operator Telefonica. “This caused quite a sensation,” Mohr-McClune said. “But there were few details about the Telefonica deal available. With the Vodafone announcement Vodafone has negotiated an excellent deal for itself.”

The deal centers around three main content areas: maps, games and music. Critically for Vodafone, its Vodafone Live content will be available on the Ovi portal, and in the music element, usually seen as the most profitable part of content services, Vodafone will get primacy—its content will be listed above Nokias own music store within the Ovi portal.

“This tells us the extent that which Nokia is prepared to compromise and listen to the operators,” Mohr-McClune said. “However, Vodafone is likely to be Nokias biggest customer in Europe, and so it is doubtful whether other mobile providers will be able to secure such good deals. Vodafone is a great reference name for Nokia and will help the firm persuade other operators that Ovi platform is not the devil they believe it could be.”

The deal is also a shot in the arm for the mobile industry in Europe, where content and services revenues are not yet up to expectations. The operators hope that as they proliferate their content and services more customers are likely to purchase content on their mobile phone.

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