Monday, March 10, 2008

Mobile Content and data thoughts

The Rise of the 3G dongle over WiFiBeen reading today from a couple of corners in my Google Reader about mobile content and data.

The first piece talks about Wi-Fi seems to be loosing to mobile broadband:
My old friend the pondering primate has a piece on Hotspots being phased out and Ericsson predicts demise of hotspots in favor of mobile broadband.
Everywhere you go, if you're lucky, you may find a hotspot, and even if you did, they will charge the heck out of you. Good 20pound/day in any London hotel. Then you think: let's hook with a network. Think again: the Boingos ("Monthly Flat Rate wifi plans for frequent travellers") of the world may have sensible roaming agreements (but not in your hotel haha) but wherever you may end's a "premium location" (who cares?) hence an additional $0.12/minute. Has anyone heard of Ad supported???
No. Wifi is complex, it doesn't have decent coverage and is a total steal.

This goes well with the next piece, which is that people had figured out it makes more sense to get 'em 3G dongles: Last week 18K 3G dongles were sold in the UK (50% of that from 3: good on ya!). Here's some more.
You know why they sold? because it's reliable, it's predictable and it's everywhere. It's because even EU roaming charges will become reasonable one day.

The interesting bit about this is that it's another indication that people are thirsty to mobile data: services and content.

Which is why I found this last piece from today's reading interesting: "Carrier executives: Mobile data revenues in trouble".

Check this out:
"flat-rate mobile data tariffs will lead to usage increasing at a far greater rate than operator revenues. This shift will demand the cost of providing mobile data connectivity be driven down if they were to continue to make money."

"usage increasing at a far greater rate than operator revenues...": uh...hello? sorry a bit stunned here.

I recall reading that the operator investment in advanced IP infrastructure was unjustified because the data based services/content takeup was insignificant (in fact yesterday one of the fierce commentary was talking about "why go to 4G") and now the usage increase is an issue?!

Usage increase is a blessing dudes! you should be blessed to see the usage increase! more content, more services and more consumptions all play very nicely into the operators' 40-60% rev share on consumed content. Even the "flat rate" plans are defined as "fare use".

"It is only a matter of time before we lose all profitability on mobile data" said T-Mobile CEO...well I think something's really messed up if finally users access content and T-Mobile can't make money.


Dean Bubley said...

The issue is that there is almost no examples of revenue share, or "operator services" consumed.

Certainly when I use my 3G dongle, the last place I'm likely to visit is the operator's website to download stuff, unless it's for help & support on email settings.

In a way, it's a sudden dawning realisation among the carriers that "content" is actually pretty unimportant in mobile. What matters is "access" and "communication", plus some "applications".

Content is a 2nd-class citizen when it comes to mobile date, and operator-controlled & taxed content is 3rd-class.

Amir Rozenberg said...

Yes, I agree that content and services are 2nd class when comes from operators, but what about when it comes from where it should, i.e. from the retailers off-deck?
It doesn't take rocket science to figure out whose core expertise is network efficiency, reliability etc., and whose core competency is content, services, merchandising, marketing and CRM.
Sure, most operators haven't put their heads around that one, but they will finally figure out that by laying out the infrastructure for off-deck players to provide optimized services, they will have gained so much more than trying to do it themselves.

\Thanks for your comment Deal..this is good discussion