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Century 21 - New Business Models in Travel

Speaker Transcripts

Henry Lane-Fox

Buying on Impulse

What I'm here to talk about today is "Zero Gravity Companies". This is a term that people are bandying around at the moment. Essentially, it just means a firm that has no fixed assets, a company with limited staffing - it's an internet company. So I want to talk very briefly about the benefits of e-commerce - I'm sure we all understand them but I want to go through them and I'm going to talk very briefly about Lastminute.com and then I want to talk in depth about what makes a website work, what would stop anybody setting up a successful website and where are we going in the future, because I think that there are very important developments coming in the next year and it is important to be aware of them.

First off, what is the point of using the internet in the first place? It's very simple, it's about transfer of information - it's not any more complicated than that. It provides the ability to communicate, on a global scale, with many millions of people and show different things to them at the same time. It's also, in theory, about low cost distribution. Of course, if you asked Mark or myself if this was really the case right now, we would probably disagree, because internet sites are spending an enormous amount of money at the moment on marketing. But the theory is that, once you have built the brand, the distribution costs can go down. If you are an end supplier, you can cut out the agent. If you are an agent, you can cut out massive brochure and advertising costs. It is also about convenience. Convenience is a two-way thing. It's not necessarily just for the customer. It can be enormously convenient for a customer to know that, in a couple of seconds, in a couple of clicks, they can have their holidays booked. It's also very convenient for the supplier to know that the number of people necessary to manage those relationships with their customers is much less than it used to be. You don't need to spend as much time with them as you used to. But, most importantly, it's about customer knowledge. One of the things that the internet does do - that an off-line shop can't do - is to tell you a lot more about your customers than you thought was possible. At the moment, you can go to internet sites and you can re-design them. You can make them look as you want them, specifically for you every time. That's like someone going into a travel agent and, as soon as they come in, someone is running around repositioning things so that the brochures they want are in front of them. This is very important in driving sales and that is something that is unique to the internet. 

So, let's talk about "Zero Gravity Companies". We're talking about new business models. They have no fixed assets and most of them don't have warehousing space, they can be truly virtual agents. You don't have to take risk on inventory (as we've heard from Mark) and we certainly don't either. This means that the barriers to entry are very low. What this actually means is that it can become a very competitive marketplace in a very short time. Just when you thought you had set up a website that you thought was going to be a big success, somebody can come along and try and do a similar thing very fast, with limited investment and limited time. 

First mover advantage is something that everybody talks about - it seems to be the key. The reason why people believe it's the key is quite simple. In a global marketplace, there isn't necessarily the space for as many agents to operate as there is off-line. Geography becomes irrelevant. It's all about levels of service. It's about price, service and convenience. Being the first mover into a marketplace will mean you have a very dedicated and very loyal audience and they will be less likely to switch to another company which comes into the marketplace. 

There are also new management models as well. Many companies you speak to at the moment find it very difficult to move at the speed that the internet moves at. Everything moves very fast indeed and that means you can't have the time to spend making lengthy decisions that are made by a Board. You have to give people the authority to make choices immediately - to make snap decisions - and that is a new way of working. A lot of off-line companies think that it is better to set up a separate company as their on-line division, that is allowed to make decisions very, very fast, that can suddenly turn around and employ 50 people in a day if it is needed and then get rid of them a week later. It's not a model that is similar at all to an off-line business, but you have to understand it if you're going to succeed.

So, what sells on the Web? It's really very simple and there is a reason why travel is here. Ideally, people were looking for virtual commodities. The wonder about the internet is that you can buy something in a matter of seconds. But you don't really want to have to deliver it. With delivery, you are in the same old position you always were. After having bought something in three seconds, you want have it delivered to your door in ten seconds. Virtual commodities are things that you can buy in a very short period of time, that didn't need to be delivered to you, that didn't really exist. Another key to the success of the internet at the start is products with flexible prices - there had to be a real reason for persuading people to go on-line in the first place. It wasn't yet convenience. Very few websites are that convenient. What's driving people onto the internet right now is the promise of really low prices. So the industries that are able to offer flexible prices are the ones that have succeeded. And ideally this is a global market, trying to fulfill a global need.

Travel is good. It fits into all those categories and that is why there are huge companies, like Microsoft, pumping billions into this industry, into the on-line travel market. They know it's going to be big and they know it's going to be easy for them to grasp the market.

Now I'm going to talk very briefly about Lastminute.com. What do we do? We are the last minute site. We deal in distressed inventory sales. We also deal in premium sales. What we want to become, is a website where people can go to fulfil all their last minute needs. Whether you are looking for a plumber, a babysitter, a cheap flight to Rome, a ticket for the Rugby World Cup or a theatre ticket for tonight, we'll be able to sell it to you. That's a large effort involved in providing all those products and we're not there yet. We started in travel because we knew there was a niche market for last minute sales. You only have to look at the success of Teletext over the last 20 years to see that the market exists and ideally the internet is better suited to it than the medium of television that Teletext has been using. We started offering flights, hotels, entertainment tickets and presents. We've broadened that now. We were the first people in the UK to start selling package holidays on-line. We also offer another range of services, like plumbers and babysitters. We sell islands in Fiji for about £8million, we sell trips in a MIG Fighter jet to the edge of space. We really try to sell objects that we believe will be of interest to our audience. We are also entirely focussed on e-commerce. No phone calls with us. We don't want to be talking to you if you are one of our customers. We want this to be as simple as possible. It's not really very useful to have business on the internet and then in the end ask people to ring a phone line. Then it would become just another advertising tool. But the internet is a lot more powerful than an advertising tool. It can cut out the cost of the phone call, cut out the cost of the call centre - you don't actually need it any more.

So what is the value to suppliers of Lastminute.com? Well, we've got a huge audience, a dedicated audience, of people who have come to the site and said "Yes, I'm very interested in last minute deals, so let me know about them". So, very like QXL, we can let them know, on a weekly basis, about all the best deals available. Those deals typically sell out in a couple of hours and we're sending that e-mail out to more than half a million people a week. We also protect against "brand cannibalisation". If you are British Airways, you don't necessarily want people to know that you're having a bit of trouble with a flight to New York. If you want to put a price out in the marketplace of £99, you want to be sure that this is not going to cannibalise your traditional business market. A lot of business travellers travel at short notice and, by putting heavily discounted fares in front of them, you may find that you don't get incremental customers, but that you are lowering the yield you achieve. So we prevent that. We strip out the brand. We don't tell you who you're flying with when you book with us. We tell you after you've booked, but not until the moment that you have actually booked. We say that is a national scheduled carrier, the price is absolutely rock bottom, but you have to be flexible and one of the ways we will reward you for having a great price is by removing the brand entirely. 

The other big advantage for Lastminute.com and our suppliers is that all our suppliers have free access to e-commerce. It's quite expensive to set up your website. If you are a small hotel in Cumbria, it's hard to imagine how you can have a truly successful, global site. But you don't necessarily need one. There are agents and infomediaries who can take the offers from you and can sell them on your behalf. And we don't charge for this. If you sell through us, you can pay us, but, if not, there is no cost. Most importantly of all, we are not a UK company. We were founded here but we are an international company. We have localised sites in France and Germany, we're entering the Swedish market very shortly and other localised sites will follow in Europe in early 2000. We also intend to be the first UK internet company to make a success of things in the US. It's a huge market and nobody is tapping into it now. The value for the supplier is clear. Take the example of the Cumbria Hotel. It's just sitting there. How is it possibly going to advertise to tourists coming across from Spain, from Japan, from America? Our website is the ideal way. You need to build a relationship with a really good infomediary.

The value for the consumer is clearer. Unbeatable prices across all our products. We have price guarantees - you can't beat them. Auction, not auction, it doesn't make any difference. We are a one-stop shop as well. You can come here, you can book you flight, your hotel, your car rental and in the future we want to provide the ability to fill your fridge for you when you return from holiday so that you've got fresh food! We'll provide a taxi back from the airport too. We're also convenient and we are information rich. We'll provide all the information you need in one place to make decisions as to where you travel, when you travel and how you're going to travel there. Most importantly, we are about providing ideas and inspiration. We are saying to people, "Hey, these are magnificent offers. You not have thought of going to Moscow in mid-winter, but for the price we can send you there, take it! It makes a change. Do something different. Do something Lastminute.com". It has proved to be a big success. What it has done is to drive incremental custom. It has taken people who thought they weren't going to be interested in travelling and encouraging them to travel.

A brief history of Lastminute.com. We were founded in l998 by two people under the age of 30 years. They had no travel experience. They had some internet experience. We raised $1million in venture capital funding - originally from France Telecom and some specialised new media VC's. We launched the site in October l998 and originally, as I said, we offered hotels, flights, entertainment tickets and gifts. There were 8 of us - so from April l998 to October l998 we had 8 staff and we launched a website. By April l999, only 5 months later, we had 100,000 users and we suddenly have 20 staff. We then took a second round financing, we raised another $10million. That came from Deutsche Telekom, Intel and Global Retail Partners. We are one of the few internet companies in the world who have two different telecoms companies investing in them - France Telecom and Deutsche Telekom. They are not traditional allies, but they have decided to join forces to invest in Lastminute.com. By August l999, we have 300,000 users and we've suddenly got 70 staff. This has happened in under a year. We've also introduced new products - package holidays, business class flights and a services page. Now we've got over half a million registered users, 7 million page views per month and, on average, between 50,000 and 70,000 unique users coming to the site every day. We have a 40% monthly sales growth rate and this has been achieved since the start back in October l998. We've now got local sites in France and Germany in French and German, with local supply teams sourcing local deals for local markets.

So, what makes an e-commerce company succeed? This is a difficult question, but I think there are a few key things and I'd like to tell you what they are.

First of all it's marketing. In theory, it's very easy to market on-line. You can go out and buy a whole load of banner adverts and you can shove them all over everything from AOL to Freeserve and you'll find that quite a lot of traffic comes through to your site, but it isn't always targetted traffic and the levels of traffic that you will achieve from banner advertising are falling day by day. What's really key for marketing is to first of all decide what is your audience and who do you actually want to market to? Be clear to pick partners who you can do deals with and who you can provide value added content for and make them market just to that niche audience. Don't do things in too big a way, it doesn't have to involve huge off-line advertising, you can do it all on-line. It is an on-line market that you want to buy at the moment, so you don't have to encourage off-line people to buy from you just yet. They will come along anyway, but you have to market to the right group of people. You also have to find marketing partners who you can complement, not compete with. There isn't very much competition going on on the internet at the moment, and most people's view is the 1 plus 1 really can equal 3. If you can find a non-competitive partner, your site will grow faster than you could ever possibly have imagined.

You need advanced technology too. You have to develop technology and you have to innovate with it. Otherwise you won't keep the audience of people that you have. Technology moves at a frightening pace at the moment and you have to stay, at least aware, of what the changes are because they can be absolutely critical. Before the invention of on-line auctions, the internet seemed a slightly dull world, where one could travel around, find out information, but there was no real catch. Then auctions came along, first in the US - a huge technological development - and they changed a lot of companies' ways of doing business. We suddenly see companies like eBay grow up and other enormous companies in the US who have built their success on innovating with new technology. 

You need to build flexible and robust platforms. I can't stress the importance of this enough. You will be amazed by the success of a really good site and, when you have millions of people visiting you each month, you must make sure that you build something that can cope with those levels of traffic. Don't build a site that you will have to keep building extra pieces into to cope with those levels of traffic. It's a disaster if your site goes down. It's incredibly bad PR.

Use technology to facilitate supplier relations too. There are an awful lot of internet companies going around at the moment, particularly in the travel space, going to people like British Midland, Virgin Atlantic, British Airways and saying "Hey, come and work with us. We all do the same thing, but we believe we're better at it and have a bigger audience than somebody else". One of the real keys for suppliers nowadays is - how easy is it for me to work with you? Are you going to link direct into my reservation systems? Will this be a totally electronic process, or will there be a manual side to it? Well, right now, there normally is a manual side, although this is going to be less and less the case. You have to be prepared to say "What would you like us to do for you?" and treat it as a partnership. When they come back to you and say "This is how we would like to work with you", make sure you do your utmost to have the technology to make those relationships simple and easy.

Technology doesn't just mean you website either. New management and new business models mean you have to move very fast. Even simple things, like having an intranet in your office, can make a huge difference. Everybody can have access to huge amounts of information. Customers servicers, supply managers, marketing people will all need to have access to the very latest statistics the whole time. It can be chaos to get hold of those statistics if you work in an off-line company, but you can use technology to make it very much more simple just in your office on a day to day basis.

Supply networks. Supposing you've got an audience, you've got the technology that will let you sell you products, you need the products.

Concentrate on quality products. It is about price, but it's not just about who has got the lowest price. It's about who has the best price for a product. People don't want to come on to the internet and buy shoddy goods because they are very cheap. They want to ideally find high quality items that are at a very good price that will incentivise them to buy. As we move forwards in the internet, we will move away from price - information, service and convenience will become more important, but we are not quite there yet.

You have to react to and anticipate your supplier needs. It may sound obvious, but a lot of people don't do it. Try and second guess them, try and work out what they might like you to do next year and then ask them if that is right and ask them how you should go about doing it. Treat everything as a partnership. One of the things that internet companies are very bad at doing at the moment is having long-term strategies. The reason for that is quite clear. Things on the internet will change so quickly from month to month that it is quite hard to sit back and think what you want to be able to do for your key suppliers over the next five years. But that's what the key suppliers want to hear, so at least try and develop a long-term plan for them.

Content is important too. I don't mean product offerings here, I mean information on thinks like weather, travel, traffic. Make sure you do provide it. People want to see it, they want to know the sort of information in destination guides and they don't want to have to look through brochures any more. But make sure, if you do provide information, that it's relevant to what you have to sell and that it's very up to date. There's nothing worse than finding a website that has information that is two months old. Quite possibly, the customer will not return to you.

Make sure that what you are trying to do is very clear to your customer. When they come to your site, make sure that they understand how you do what you do and why you're doing it. Again, it sounds very obvious, but a lot of internet sites get that wrong. Good content and good information will build loyalty. People will return to the site just to check the latest football scores, or just to check whether there is really bad traffic on the M1. They may not be actively coming to make a purchase, but they are returning to you and you are building loyalty, so that next time they want to buy they will come back to you rather than going to someone else.

The last point I want to make may not be so easy for some of you, but, if you can, use tailor-made content. Don't just go to another big internet company and steal some of their content information and put it on your website. People will see it on all the sites that they visit and it will be boring. Try and make it tailor-made. Try and make it promote your company image through the information that you provide.

Finally, think big. It's no good thinking small any more. There just isn't room for as many travel agents as there are in the High Street. The internet facilitates international commerce. Be prepared for that. The people who win will be the big international brands, they won't be the local suppliers. Even a niche market - such as the student market, for example - when you treat it internationally - is a vast market. So even a small niche here can be made much much bigger when you develop it in other countries. And most importantly of all, thinking big means moving quickly. If you have a good idea, and it works in the UK, make sure that you can get a presence in every other country as fast as possible, because it only takes one other person in any of those countries to say "Hey, that's a good idea" and do it first and then you may be locked out of those other markets. So move very very fast. It's all about the customer. Customers have incredibly high expectations of the internet at the moment. They read a lot of articles in the press and they think that everything's going to change. It's going to change the way you do your banking, the way you plan your leisure time and they expect miracles when they come on-line. But we're not quite there yet! Papers write about it because we've all shown huge promise, but there are certain basic things that you have to do to make sure you don't disappoint your customers. Make sure they understand you site. Offer them help. If you see they've been stuck on a page for a long time, there is now software that can say "Hey, you've been stuck there for quite a while, are you having a problem, or do you need any help?" And then if they do ask a question or send in an e-mail answer it immediately. Don't wait till the next day. If I'm on-line and ready to buy right now, unless I get an answer pretty much immediately I've gone. If I get an answer tomorrow, I'll think that's a hopeless company and I'm not going back to them. So do the basics and do the basics very well and then you can succeed. Remember that, at the moment, this is probably the first time many of your customers will have shopped on-line. That means that they have probably very basic knowledge of how the internet and things have to be made very clear and very simple to them.

So what are the barriers to entry? Some people think that they are very low. People think that it's easy to get something set up in a very short period of time and in theory you don't need a lot of staff. Having said this, a lot of people have tried and they have failed quite dramatically. So what are the real key obstacles to succeeding?

As I've said before, and I can't really stress enough, there isn't enough room for as many agents as there are today. So your business model has to be unique. What you are doing has to add value to the market, but it has to be distinguished from what everybody else is trying to do. You have to be ready to say "How can I compete with the huge US company who's been successful for the past 4 years, has an enormous amount of money to spend and is coming to the UK?" The answers to these questions aren't easy, but you need to ask yourself. You could differentiate yourself by picking a particular market segment. There are an awful lot of markets out there that one could think of attacking and not very many of them yet have been done very well. There are still big opportunities, but pick a market and dedicate yourself to making the market your own. So geography is obviously a barrier, a local company is no barrier and, if I'm sitting in Bradford, I don't have to go to a travel agent based in Bradford. I can go to an agent in Wales, or anywhere else and it's all as simple for me, so there's no value in local geography any more. The internet provides a global audience and you've got to be able to cater to that, you've got to move internationally and you've got to do it quickly. Are you ready for that? I don't know the answer to that for all of you and I'm sure some of you aren't ready, but, if you're not, I suggest that global brands in the end will overtake you.

There are financial barriers too. Internet sites are not profitable straight away. A lot of them have huge share market values on flotation because the promise is there that, at some point in the future, they will be profitable. They've spent a lot of money. You have to raise millions of pounds now to make a real success of something and be prepared to accept the fact that that investment won't make any profit for maybe 4 or 5 years. This can be hard for some lenders to accept and they might be quite cagey about staying the course.

Staff is another barrier - lots of people don't appreciate this one. Internet sites do need people who know about e-commerce, both for the marketing side and the technology side. There's a real shortage of people like this in Europe and a lot of American companies are coming over here to help people with this right now because there's a massive experience base in America. And these people will expect to make a lot of money from their share options. That's why they will come and work for a company and they're looking for exciting businesses. There aren't very many of them but you've got to make sure that your company and your business plan are really exciting otherwise they won't come and work for you and, without good people, you won't succeed.

Speed. We've spoken about first mover advantage. It's cirtical. Success is going to depend on being fast and being incredibly flexible. Changing your attitude totally from one day to the next. A lot of companies simply aren't ready to do that yet. They are set up with very traditional management patterns, decisions take a long time to happen. If meetings happen tomorrow, you won't have a decision coming from them until two months later. If you take that attitude to the attitude, you're out of business.

So what's the way forward? I suggest that everybody tries to find a niche and there are lots of them around - single travellers, student, elderly travellers - none of these have been done very well in Europe at the moment. So pick the niche, hopefully you will have a bit of expertise in that market already, and try and dominate it; not just in the UK but also in the whole of Europe. Try and develop a web strategy right now that complements your traditional business. There isn't so much business being done over the internet that lots of companies can survive by being purely internet companies. If you're a travel agent, the majority of your business will still come off-line, but it's good to have a little presence now on-line, to see how it develops and to be ready when the explosion comes. At the same time, you have got to think of a way that your traditional customers won't just think "Hey, I'll just shop on-line now and not go into the shop" You then wouldn't have anything for you staff to do. You've got to think of ways to attract people to still come to your shop. You have a shop that's open 24 hours a day, 7 days a week, 365 days a year, it's very difficult to compete with this. 

Very briefly, I want to talk about where I think the future is. The first thing I'd like to say is that I don't believe the internet is the future in Europe. I think it was the future for the States, people were very PC friendly, they were very cheap and internet access costs were very low. But the European market is very different. Hardware costs are hugely high. Internet access just isn't free. Whichever way BT want to sell it to us, it just isn't free. But interactive television is really interesting. The ability to book over your television is coming now to the UK and this may suit the UK and European markets very well. We're very used to booking travel through teletext. Sure, in the end, we make a phone call, but, if we could book that on-line through our remote control, I think that may really encourage people to take up e-commerce. WAP technology (Wireless Application Protocol) will enable people to book things using their mobile phones. This means, longer term, that you could be walking down the street and could have a message from Lastminute.com to tell you that "We know you like Pinter and we know you have a bit of time between meetings and did you know that there's a Pinter play on round the corner. There's a seat free and you just turn left, turn right and you're there. Just click here and you can book." This is very powerful - real direct marketing - and that's where we're going.

An end to agents? Well, everybody talked about disintermediation for a long time and they thought the real key would be end suppliers being able to go direct to their customer base, cut out the agents, cut their costs and lots of people would go out of business. Actually, it hasn't really proved to be the case. A lot of end suppliers have done that and they have cut out some of their agents but, what's really interesting is - for example with American Airways - they can create a website and can reach all their existing customers, but how can they reach new customers. The actually still need agents to do that, but it is just a different kind of agent - a virtual agent. Communities are the ones that provide the real power - having a huge community is what will drive sales and it is not always possible for, say, British Midland to do that without QXL. QXL can provide an enormous amount of customers for British Midland, whereas, the British Midland website can provide nowhere near as many. The traffic levels are much lower and as a result the products are much less likely to sell. Incremental custom is what agents bring and that isn't going to change. So there is still a role for agents here, you've just got to think out carefully how you're going to enter the market. Actually, global agents can really protect local products too. The ability to sell local products worldwide is fantastic if you're a supplier and global agents can really help you do that. It's only the really enormously large companies who are end suppliers, who may be able to make direct sales really worthwhile, but there are a lot of other people trying to sell things and they are not huge companies and they still need agents.

And the last thing to say is that agents will become electronic quite soon. You will be able to go to an agents site and ask whether they can find you a flight to Paris tomorrow. The software agent will run around a lot of different websites and will find the best fare that it can and bring it back to you and give you the best fare in the marketplace. Longer term, those software agents will be able to go out and communicate with each other and get together to buy in groups. So there might be 20 people all together who all want to fly to Paris tomorrow. And those software agents will be able to get together and negotiate a price downwards with another software agent acting on behalf of, say, British Midland. This may be a terrifying technological thought, but it is on its way.

New sales methods are here as well. The internet has done one really crucial thing already and we've heard about it already from Mark. It invented auctions which suit certain products really well and they are actually beginnning to replace the whole classified section too. But there are other models coming as well. Community buying. Letsbuyit.com is a very interesting website for people who haven't yet been there, I suggest you go. They aggregate together an enormous amount of users who are all interested in buying the same product. They can then go back to the supplier and tell them they now have 100 people interested in this, can you lower the price. This lower price then goes back to the end user and it is very difficult to do this without the internet.

We've spoken about auctions, but what about reverse auctions. eWanted.com is a good example. People will say "I want to have a holiday in Barbados leaving on Monday and they put in an offer of price. They say they are prepared to pay £100. The offer is then sent out to a lot of suppliers and, if anyone accepts it, they are put in touch with that person. This is very intesting.

Dynamic pricing is also very interesting. I believe this is the way forward myself. If you really want yield management, you don't want auctions. Despite what Mark said, I still have problems seeing auctions being able to shift an enormous volume of product. We do auctions at Lastminute and it's very difficult. Any, anyway, it's not quite right because it doesn't take into account two sides of yield management. What you really want to see is products on a website with a price that will change depending on how many people are buying it or aren't buying it and that price should be able to go up as well as down. No internet site has done that yet. It's very complicated technologically but we're hoping to do it in the first quarter of 2000 and I think it will be a huge benefit to the travel industry when we do. Because then we really will be able to control your yield for you. You stipulate the rules, you tell us how much the price can move, but, in the end, we'll really provide the sales. In the end the advantage of that is that I can go to the site and say "I really want to go to New York tomorrow, but I don't really want to participate in an auction for 12 hours and then find out that I didn't get the ticket. I want to buy it straight away. Click, Buy, simple. Yield Management.

The last thing I want to say is about new players - Europe against the US. US sites grab the headlines at the moment, they've all been fantastic and they are remarkable companies. But there are new sites setting up in Europe too. And European companies have some advantages. Europe is an extremely complicated market, both legally - in taxation terms - and in marketing terms too. Some US companies came over from the States with the idea that they had a successful model that they could somehow just translate into the local language and roll out across the whole of Europe. To their great surprise, it didn't work. It's fairly obvious to all of us, I would imagine, what some of the reasons are. Local markets demand local knowledge and actually European companies are now very well placed to take control of the European market. Non-US venture capital funds are flourishing in Europe at the moment. This is very important, because it provides very big investment for European entrepreneurs. On top of that, Europe is growing faster than the US ever did. It's worth remembering that, in fact, the European market will be worth more money than the US. It has more people in it and is growing faster than the US did. It may be a more valuable market to be in.

New media are necessary for new markets. This is what I meant about mobile phones and about interactive TV. Mobile phones are hugely popular in Europe. Almost everybody has one and almost everybody will probably be happy to book over one and that is a new bit of technology. It is not the same in the US. In the US, mobile phones work very differently from how they work here, both in call charges and in people's use of them. The great mobile phone companies - Nokia, Hutchinsons - are all based over here and they'sre driving forward these technologies. These are the ones that will probably succeed in Europe and companies who can adopt with those technologies will succeed with them. I think there is a huge opportunity in Europe and I don't think we have to worry too much about US companies coming over here and grabbing market share away from European companies. I think we can add real value to the market primarily through our knowledge of the local markets in Europe.


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