Libon is a new application launched in November. For global company Orange, it is a disruptive innovation because the service offers free phone calls, free text messages, and free chats. Libon stands for “Life Is Better ON”.
This decision could be surprising: Orange makes money from subscribers who want to make phone calls and send text messages. Launching Libon, Orange is becoming more and more an Internet company.
Besides the very nice and convenient UI, this strategy is a right move for several reasons:
-Compete against other Internet players: Internet companies like Viber, Whatsapp, Tencent with WeChat are offering chat services or/and free phone calls. Many Orange users are also using Viber for free phone calls with other Viber users. Those applications take potential revenue away from Orange. For Orange, launching its own application is a good solution to get Orange users to use Orange solutions and not solutions from other players.
-Spread worldwide and on every device: with this application, Orange is able to expand beyond its huge user base already in over 80 countries. For instance, a smartphone user in China can download the application and talk for free to someone using Libon as well in the U.S.A.
-Monetize with a new business model based on worldwide recurring revenue: the strategy of monetization of users is changing thanks to this mobile application. The target of monetization is not anymore limited to subscribers in countries where Orange operates. The targeted audience is now worldwide. To get additional features like free calls to non-Libon users, the user has the opportunity to pay $ 2.99 per month. This strategy of monetization of users is already implemented at Tencent: it is a success. We can also expect Facebook to monetize its user base the same way in the years to come.
Compared to Viber, Skype, Whatsapp, and WeChat, one feature is missing on Libon: photosharing. We expect this feature to be included in the next version released in 2013.
Orange is now on!
1/ Libon blog, URL: http://blog.libon.com/
2/ Libon website, URl: http://www.libon.com/