Do Mobile Services

Martin’s latest piece over at Mobitopia, Think Mobile Services provides some commentary on a piece in The Economist: Beyond the bubble.

Here’s the quote I’m going to pick on:

[Dave Dorman, CEO of AT&T says] the best prospects are at the network’s edges, not at its core, and revolve around providing complex services, not merely dumb capacity.

All well and good, but this quote still shows that the telcos see their “shiny new networks” at the heart of the business. They all seem to be saying the right things, but I still think the folks at the head of most of these organisations are too tech focused (something that NTT DoCoMo realised and fixed very early on).

Looking particularly at the wireless segment, some operators are claiming to be innovating on data services. Let me ask you a question: do you consider purchasing ringtones from your handset to be innovative?

Vodafone seem to be getting it most right with their live service, but the key difference with that is the integration of the live branding into (some of) the handsets.

One of the problems at the user-side is the sheer cost of some of the tariffs available, which are not geared to high data usage (unless you’re the operator). This is one space that is wide open for the application of some imagination, when combined with services.

Let’s imagine that Apple launch a new iPod, with some form of packet-switched connectivity integrated along with a mobile iTunes store (N.B., this device is not a phone, but the ability to send text messages might be nice). As things stand, operators would probably put this on a £15 pcm fee, which includes 1Mb of data and maybe some cheap texting rate, an extra £5 per 1Mb of data and be done with it. As a user, what the hell is 1Mb of music? Now, you and I might realise that it is about 3 songs, but users should not have to do calculations when they are trying to use the device.

Obviously, this kind of device should not be on a monthly tariff at all. Network operators will probably have some form of mild shock on a business model with non-recurring fees such as this, but given that pre-pay has been such a success, why is this any different? The best payment model for a device like that described above would of course be a certain amount per song, with a standard flat-rate text message rate.

Yes, my example is a different kind of device, but I believe that this kind of segmentation for the new devices (such as N-Gage) is inevitable, and operators either need to start creating a new set of tariffs to match the services, or, to open up their networks to start-ups who can further grow the market with a new set of devices and services. Phones are not necessarily the best devices to take full advantage of what people might want to do. Nokia are probably doing more than anyone to come up with new devices (like their cellular security camera), but the lack of imagination at the operators means that something like the N-Gage needs to be hamstrung by squishing everything into it at once, making for a non-great experience in anything.

Basically, I’m proposing that niche operators are one way to spark new life into the sector (witness the MTV deal)—whether they are run by the operators or by others is immaterial. Not so different from the cable TV market, I guess, where channels such as HBO and others have done so well.

So yes, think mobile services, but at the end of the day, you need to do mobile services. And do them well.