UK 2.0 – Why the UK can become the global hub for mobile

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This is a guest post by jamescoops from the mjelly mobile internet blog. 


There’s been a lot of discussion on Techcrunch UK and elsewhere about how to make London and the UK a hub for Web/Mobile 2.0 startups and businesses.   However, London arguably has a much better chance of becoming the leading cluster for mobile 2.0 specifically, the new generation of mobile internet and mobile media services.

Over the last couple of years, a wave of mobile 2.0 startups have emerged in the UK that in many cases eclipse anything found in Silicon Valley.  Those in London include Trutap, Fulham-based Mippin, Reporo and Truphone in Bermondsey, moblog over in Shoreditch, and buddyping and Flirtomatic in Soho. Down the road in Cambridge we’ve got Taptu taking on Google in mobile search, Rummble pushing back the boundaries of mobile location based services and Bango making moves in mobile payments and advertising.  London is also becoming the location of choice for the mobile HQs of more established players such as admob, who just opened their European office in Oxford St, and Google who have a mobile development base in Victoria.   

The UK mobile market is a great place to launch mobile 2.0 startups; all five national network operators are offering 3G services, and faster 3.5G HSDPA networks are being widely rolled out.  There are already over 15m 3G subs, around 25% of all mobile connections.   Believe it or not, UK operators have been much quicker than those in the US, and much of Europe, to enable and support access to third party mobile internet sites.  The last year has seen an explosion in flat rate data tariffs with Vodafone now bundling free unlimited data on mid-range contracts. 

Since the mid-noughties (2005), the UK has been one of the world’s most developed markets for mobile 1.0 services such as personalisation content, which has lead to a well-established local ecosystem of service delivery platforms, sms aggregators and mobile technology expertise.  The UK’s strength in mobile 1.0 is underpinned by a consumer base that is willing to spend money paying for mobile content and services.  This has helped to boost the local mobile advertising market, with UK CPC and CPM rates way above any other territory.   As a result, UK mobile 2.0 startups benefit from valuable local traffic in their home market.

The English language and historic trading connections mean that UK-based mobile services are well placed to expand internationally, not only into the US, but also into the hyper-growth mobile data markets such as South Africa, India and Asia.  Many of the UK mobile 2.0 startups have substantial South African and Indian user-bases and Trutap is reportedly one of the most popular social media services in Indonesia.  Flirtomatic is also beginning to address non-English speaking markets with a rollout across Europe, starting with Germany. 

Social capital, the glue that holds a cluster together, is there in abundance for mobile 2.0 startups in London right now.  There are loads of great events happening, for example, Mobile Monday London is the largest MoMo chapter in the world, hosting events with hundreds of attendees.  There are also plenty of smaller grass roots events like Mobile Geeks of London, Swedish beers and Unlimited Drinks.   

Whilst there is competition from elsewhere in the world, nowhere seems to have quite the same mobile 2.0 buzz as London and the UK. Silicon Valley has its fair share of new mobile 2.0 startups but not at the same level of comparative scale as in web 2.0.  France is surprisingly strong in mobile, with Goojet and Igloo both doing interesting things and Germany has spawned two of the biggest mobile community sites in Pepperonity and Itsmy.   Italy seems to be good at producing big mobile content aggregators like Buongiorno and Dada but there appears to be few mobile 2.0 startups apart from the mobile media sharing community Mobango (which seems to be largely run out of the UK now).  Similarly, Spain is home to Zed, one of the world’s largest D2C mobile content players, but again, fewer mobile 2.0 startups than the UK. 

So it seems that London and the wider UK have a fantastic opportunity to become the dominant hub for mobile 2.0 startups and services.  This raises the question, should investment and activity be focused on new mobile services, where the UK has a greater comparative advantage, rather than on the generic “Web 2.0” arena?

  • http://www.lgblog.co.uk/2008/08/14/the-uk-a-future-global-hub-for-mobile/ The UK - a future global hub for mobile? | The Official Blog of LG

    […] an interesting post today over at Techcrunch entitled “Why the UK can become the global hub for mobile“, talking about the UK’s potential for becoming a mobile technology pioneer – thanks to […]

  • Wille

    So it seems that London and the wider UK have a fantastic opportunity to become the dominant hub for mobile 2.0 startups and services. This raises the question, should investment and activity be focused on new mobile services, where the UK has a greater comparative advantage, rather than on the generic “Web 2.0″ arena?

    That statement implies a centralized “command-and-control” approach to the issue.

    The fact is, IF london and the UK has a comparative advantage in the area, the investment focus will emerge out of the market.

  • http://blog.mjelly.com james (mjelly)

    Wille – good point although central decisions to play a role. A lot of the work Michael Porter at Harvard Business School now does is around advising governments on how to encourage and develop clusters which implies that laissez faire might not be the best approach. Also, in the short-term markets are influenced by sentiment – the whole web 2.0 mini boom in London may be blinding individual economic actors (investors, entrepreneurs) to the opportunity in mobile?

  • Wille

    Well, I tend to think that the best way of creating “clusters” (or a good business environment) is for government to get out of the way. :)

    Case in point: London rose past NY as a financial center after Sarbanne Oxley (“government got in the way”).

    “Markets are always wrong short term, right long term” – they’re a bit bipolar, but I think if opportunities do exist, people will grasp at them.
    I work as an independent consultant/contractor in the London area, and I’ve noticed an increase in people looking for things like people who know iphone development.

  • http://blog.mjelly.com james (mjelly)

    I’d tend to agree with you, but if government and other agencies do have money to spend and decisions to be made, I’d suggest it might be better focused on mobile, not web. Thx for your comments!

  • http://www.servicesmobiles.fr christophe

    I agree but not including with France

    The French mobile start-ups are also many and with much more advance than most :)

    with a dominant in the NFC, the mobile tv,user generated content, mobile vidéo

    Christophe

  • http://blog.mjelly.com james (mjelly)

    Yeah Christophe – i really rate igloo.mobi/ texomobile but not really aware of any other French mobile startups apart from goojet which are really international?

  • http://aftnn.org Ben Godfrey

    At Retail Events Mobile Retailing 2008 event Aaron Rattue of GfK Telecoms talked a little bit about some of the reasons the UK is a strong opportunity for mobile commerce. We have the highest take up of e-commerce in Europe and we have a good response to new technologies, the example used being the Oyster Card. This is m-commerce, not mobile as a whole, but an interesting perspective.

    His presentation is downloadable from the Mobile Retailing 2008 agenda page.

    London does have some great mobile startups (I’d like to add MyMart in Camden to the list :-). Google’s building of a mobile development resource shouldn’t be underestimated. Aren’t we all playing catchup with Tokyo and Seoul though?

  • http://blog.mjelly.com james (mjelly)

    Yeah thanks Ben – mymart is great – mobile are auctions massive in Japan so it’s an exciting space. Mobile affiliate networks are also an interesting m commerce area.

  • http://londonstrategy.wordpress.com/2008/08/29/uk-to-win-gold-in-mobile-20/ UK to Win Gold in Mobile 2.0 « London Strategy’s Weblog

    […] A number of factors favour the UK becoming the global hub for mobile 2.0 developments: […]

  • http://www.ringtonesmash.com/category/reviews/ Thomas

    I never knew that Mobango is largely run out of UK. I wonder how things have turned out or if Uk is NOW the global hub for mobile?

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