It seems that advertising driven free telecommunication services are not making much headway in UK with Blyk, a leading mobile virtual network operator (MVNO) closing its operations in UK by the end of August as it has run out of advertisers.
Though considered as a financially viable concept, the idea of free telecommunication services sponsored though targeted advertising has not worked for Blyk as advertisers are not finding customers of its free interesting enough for their attention.
Incidentally Blyk based its model around target advertising though multimedia messaging (MMS) to its subscribers to fund it telecommunication offerings and till now it has acquired around 200,000 users in UK which is appreciable number considering the fact it launched just back in 2007.
It is interesting to note that Blyk is now looking to partner Orange and offer targeted mobile advertising over its network based on user profile and believes its integrated advertising campaigns has huge potential.
Expressing his view on its advertising model, Blyk's chief executive Pekka Ala-Pietilä mentioned "Because advertising is relevant, members don't see it as spam. We have a 25% response rate, but, because of the increase in numbers, we see this as a major building block for Blyk's international expansion. The next part of the strategy is about partnerships."
A mobile phone service completely subsidised by advertising might have been a great idea back in the days when the recession was a remote possibility but now, Blyk can no longer sustain its business. We'd also be curious to see how long Spotify, which relies on the same strategy to survive, will last.