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

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?