European mobile operators to take on Apple and Google

A consortium of European mobile operators has launched an offensive against Apple’s iPhone and Google’s Android smartphones with an “affordable” device running a new Mozilla-designed operating system.

The new "One Touch Fire", manufactured by Alcatel, was launched by Telefonica in Spain last week and now by Deutsche Telekom Poland, subsidised at just 1 zloty (23 cent).

As the phone is rolled out across Europe in the autumn, operators hope to scoop up first-time smartphone customers put off until now by higher-priced devices.

Telekom, Telefonica and other partners are optimistic the software partnership with Mozilla, best known for its Firefox internet browser, will break open the smartphone market dominated to date by Google's Android — running on HTC and Samsung devices — and Apple's in-house iOS system.

As well as earning profits on the subsidised devices, the mobile operators hope to secure a secondary revenue stream by breaking open the existing smartphone market, which locks in customers to related hardware, app stores and other services.

"With Firefox OS we are expanding our existing portfolio with a new operating system that is open, developer-friendly, and reasonably priced," said Claudia Nemat, a Deutsche Telekom board member, in a statement.

In Germany, Telekom will market the device through its low-cost Congstar subsidiary. Telekom joined the Firefox OS project in 2012 as well as Sprint, Telecom Italia and Telenor. Outside Europe the other first markets for the phone will be Brazil, Colombia, Mexico and Venezuela.

The Mozilla operating system is HTML5-based for widespread compatibility and comes with pre-installed phone, SMS and address book apps. Mobile operators retain control of security and network provisions while Qualcomm is providing a 1GHz single-core processor and 256MB of RAM.

German analysts are keeping an open mind about the project, particularly about the potential it gives mobile operators to free themselves from pricing diktats of the big smartphone players.

"The era of the hardcore Apple fan community is over," said Roman Friedrich, mobile analyst with Booz & Company, to the Süddeutsche Zeitung. "If someone sees that he can get the same thing from another operator then he won't be prepared to pay more just because 'Apple' is on it."