Head of Digital Business about the end of iO

"Every failure brings new opportunities."

Swisscom will discontinue its iO messaging app at the end of August. Roger Wüthrich-Hasenböhler, Head of Digital Business, explains the background to the decision.

Roger Baur, 17 Mai 2017

Roger Wüthrich, iO is being discontinued at the end of August. Did it not stand a chance against WhatsApp?

When we started four years ago, WhatsApp was already pretty well established. But our goal was to combine messaging and calls to the standard network in one app. We were one of the first providers to offer this and WhatsApp did not include this combination of services. However, WhatsApp forged further ahead on its way to becoming a global giant. Since most customers only use one app for messaging, it is very difficult to compete as a Swiss company.

The iO messaging app was launched by Swisscom in the summer of 2013.
© 2017 Keystone

WhatsApp was not a newcomer when iO was launched in 2013. Did you ‘miss the bus’ do you think?

With hindsight it is possible to see it that way. At the launch, however, it was not clear how things would develop – I was and am still convinced that we can offer very exciting innovations. Take the fact that there was the option to call the standard network with the app and OTT – iO was one of the first messaging apps to offer this. Our customers could use iO for low-cost calls abroad, for instance. This service is no longer a distinguishing feature and it has also become significantly less attractive for Swisscom customers as a communication tool abroad since many subscriptions now include free roaming. We also underestimated the fact that the data storage in Switzerland is not a reason for most residential customers to transfer their communication to another platform at the moment.

Rival Threema depends heavily on this however.

In the wake of the NSA scandal, we have also seen an increase in downloads. But it was not enough – it required a much greater shift.

In 2014, soul diva Tina Turner, who has lived in Switzerland for many years, advertised iO in the following commercial.

Is iO being discontinued without replacement – or will some aspects remain in a different form?

Yes, NGTI, the development company behind iO, will remain. We established this competence centre with iO and we can now benefit from it. They can take the technology and their experience straight into new products and a few are in place already. We had the same experience with the payment app Tapit 2 years ago. We used this technology in Paymit initially and then in the new Twint app. Software development is a market that is constantly changing – each development, each experience and each failure leads to new and better ideas. In industrially dominated Europe, this thinking is still strange, but in Silicon Valley, this principle is the perpetual driver of success.

What will happen to iO now? What about the employees involved?

iO will be discontinued on 31 August. This will affect around 10 colleagues and we are looking for an internal solution for them. We cannot however exclude the possibility that there may be terminations in some cases. A social plan is place to deal with this.

"Today, we have more agile structures within the company. Start-ups are pretty much central to the Group."

We invested four years in iO – was that too long? Were there no signs of failure earlier?

There is a fine line between “too early” and “too late”. As a Swiss company with a long-term approach, we are obviously more cautious and prefer to wait a little longer in cases where there is doubt. However, we have changed our internal processes massively in recent years. We can now develop products and take them to the market much more quickly. We have developed the beta label “nova”, for instance, which helps us launch innovations faster. This enables a trial-and-error process which will be very important in the future. We can't just leave the digital innovations to the United States.
With regard to iO, we did not fall asleep on the job in recent years; we have been looking at alternative uses for the app and the platform. Unfortunately, none of the options proved expedient.

The fact is: there is still no European alternative to Facebook, Twitter or YouTube.

Yes, and that is very regrettable. For economic reasons above all, because the vast amounts flowing out of Europe could be used to create lots of jobs here.

Swisscom Digital Business focuses on innovation, start-ups and developments. From this experience: does Switzerland have the ability to provide global digital innovations?

Yes. Without a doubt. We have maybe found it difficult to develop social media but there are breath-taking innovations in other areas. Such as solutions for the industrial sector or in the areas of security and health. Take the following example: in our StartUp Challenge a few years ago, we discovered a Swiss company that produced digital fertility monitors. The need for this product is huge when you consider how many couples struggle to start a family. But there is another key feature: the same technology could also be used one day to provide digital contraception. This is a clear example that the ideas are out there. We just need to find them, develop them further and bring them together.

Is Swisscom doing that?

Yes. We use an open innovation approach. That means we don't just hide our ideas away internally; we also expose them to the outside world in a targeted way. We develop ideas further in our collaboration with start-ups, massively shortening the development time. This has allowed us to develop interesting products, such as voice recognition in different dialects for the Swisscom TV remote control. Or an organic substitute for pesticides used on telephone masts.

If you look back – with the benefit of the knowledge and processes of today: what would you do differently?

In retrospect, you would always act differently. But something else is crucial for us: We can now focus much more heavily on new structures, thanks, in no small part, to iO. We have several start-ups based virtually in the centre of the group and every experience is a win for this new approach. iO is disappearing as far as the outside world is concerned – but it will create new opportunities internally.

iO – what happened

Swisscom launched an innovative Swiss messaging app in summer 2013: customers could use iO to send messages and much more. They could call other iO users and even make calls to the conventional telephone network – an Internet-based service that was available on very few apps at the time.

Since then the market has changed rapidly and customers have concentrated mainly on WhatsApp, which now belongs to Facebook. Swisscom has therefore decided to discontinue iO as of 31 August.

Roger Wüthrich-Hasenböhler

Roger Wüthrich-Hasenböhler is Head of Digital Business at Swisscom. He is responsible for the development of new business areas.