How can operators get back on the content bandwagon- any suggestions?
by Anthony Cox on February 15th, 2010
The rise of the mobile App, driven initially by the iPhone, and now by all major smartphone manufacturers, has changed the market for mobile operators beyond recognition, leaving them in a somewhat unenviable position, at least relative to the likes of Apple and Google.
These companies appear to be able to do no wrong recently, though some have one or two minor questions over Apple’s iPad…
The backdrop to this year’s Mobile World Congress in Barcelona is that mobile operators have pretty well lost the battle over who controls content on the mobile Internet. The walled garden approach, adopted initially by operators like Vodafone has been outmoded, not only by open access to the Internet on the mobile device but by a content model, the app store, that ties in content revenues to a handset manufacturer elite.
MWC is an annual day (or week) of reckoning for the entire mobile industry, from software provider to handset manufacturer, from mobile operator to just about any company that has an interest in mobile.
For mobile operators, the question has remained the same for some years though- how can they avoid becoming dumb pipes for rich content that makes others rich but not themselves?
Of course there is still money in standard mobile subscriptions, though there is increased competition. There is also money in managed services, broadband, fixed line and even TV, all of which are markets which mobile operators have explored. None of this really addresses the problem that underlies the mobile operator’s business though- that in a world where content is becoming king, they are becoming stuck offering transit, and that in the long-term transit prices are trending downwards.
Mobile’s forth generation, in the form of LTE is on the way, and increasing mobile data volumes mean that there will be space on the networks for even more content. But does it really change the operator’s dilemma? Maybe not entirely, though it does open the door for them to be able to offer tiered levels of service for data. And if mobile data volumes continue to rise, pricing could be developed according to traffic priority- from “best-efforts” representing lowest priority traffic, to “guaranteed super fast via LTE” representing a premium tier.
That’s just one small idea. Other ideas, anyone?
Tags: app, App Store, mobile content, Orange, T-Mobile, Vodafone
Anthony,
Nice points you have made considering operator’s point of view. The entire value chain has been further sliced and major value will be eaten by the content providers thought the major costs will be be bear by operators.
Operators will have to control either the content or the associated revenue generating channels. ex: operator owned app store, exclusive tie ups with content provider in pushing the content on priority as done by Television channels. Also generate revenue from advertising and marketing opportunities programmed in the phone.
I hope operators will find more ways other than we have discussed in order to drive profits.