Monday, November 23, 2009

Big fishes, small fishes, who eats who?

We are just facing the decisive time regarding the boost of mobility. Till now, carriers considered themshelves the big fishes, owners of the market,
and able to eat the small fishes at any moment. But that is becoming increasingly unclear. Once extended the mobile data, with a fixed monthly
fee for data, external service providers (basically internet-style service providers) pay more attention to mobility. Till now, in mobility they were small fishes, very limited by the walled garden carrier model, but that is changing.
Internet (and HW) companies such as Google, Skype, Apple/iTunes are seeing increasingly capable devices and affordable mobile data prices as their opportunity. In mobility they can be considered small fishes, but they are really big fishes overall, and not only big, also fast swimmers.
Application marketplaces where revenues from apps are shared between providers and the marketplace owners are constraining possible carrier value added solutions based revenue, and even in the case of "loved by users" devices, they are forced to share their data revenue with the manufacturer :-) It is clear that the big fish is not so big, the small fish is not so small, or even being smaller their strategy is better.

Could the carriers avoid becoming a mere dumb pipe, what they consider a defeat? Yes, but....
The internet-style boost of mobility has weaknesses: apps, device fragmentation, no common use model, the target of users is not the whole mobile user. Carriers can offer rich solutions based on common services, easy to learn and compatible with most devices, they can offer the next
generation of SMS model (you learn one service, and you can do very different things). Carriers still have services not properly "squeezed" to get juicy value added services, VideoCall/VideoShare, Push to Talk, and right now RCS (Rich Communication Suite) are, properly combined, an incredible framework to build mobile solutions on.
Then, the operators have not been defeated yet, but they need perhaps to be smaller but faster, in the modern world speed and time to market are more important than sheer size.

Obviously carriers can try to block protocols, but the generalized use of mobile data is changing the mind of regulators, and they are more keen on supporting mobile net neutrality.

The lessons learnt from internet says that Skype becomes long distance minutes leader, succesful VoIP providers leading the integration of voice with apps (Voxeo, Ifbyphone, Twilio, etc), Google Voice becoming a real alternative. In mobility the device fragmentation offer an opportunity to carriers, the only ones who have the capability and the goal to offer new possibilities to mid and low tier users, and monetize that.

The future of carriers still depends on themshelves, but only for a little while, they have to move faster and offer their alternative, boosting the mobility based on common mobile services being used by 3rd party ecosystem to deliver use cases based on them.


serelk said...

The mobile market will be completely different in two-years time frame when RCS supposes to arrive to the mass market.
At the moment it seems more like a re-branding of legacy services under new name without any clear business case.
Sorry, probably another failure.

juan said...

Serelk, thx for your comment.
In any case, I think we should not sacralize the "business case".
The business case and accurate forecast are needed when you have to invest a lot, in example RAN deployment, or replace core technologies, to offer RCS and see what happens, carriers does not need huge investment but the aim to deploy :-)

SMS has not a powerful business case in advance, but once offered (SMS centers, and GW were a minimum investment compared to deploy full coverage RAN) the ecosystem developed valuable services around SMS and become a powerful revenue generator. Perhaps RCS is a similar case

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