Internet Giants Threaten Mobile Operators

[Jerry Raia]

<div class='os_post_top_link'><a href='http://www.zdnetindia.com/news/communication/stories/140497.html' target='_blank'>http://www.zdnetindia.com/news/communication/stories/140497.html</a><br /><br /></div><i>"Mobile telephony companies need to adapt their business models to compete with major Internet players, analysts agreed this week. Companies such as Google and Yahoo pose a risk to mobile operators, Gartner believes, as they develop mobile versions of their Internet services. This could encourage mobile users to turn to these companies for their mobile Internet services, making the mobile operators just a provider of connectivity and robbing them of crucial revenue in the future."</i><br /><br />I don't think the carriers are in any real danger here do you? As much as they would love to charge you a nickel for every time you even look at your handset, I don't think they will be standing in bread lines anytime soon. I also think Google with its primitive Beta offerings and Yahoo have a long way to go in this area as well.

[edgar]

I absolutely believe this article is correct.

Much the same as land lines, Internet Access and TV has become a commodity that is traded and resold so will Wireless. And it will happen quickly when it does.

The consumer will always go to the value proposistion.

Take a look at companies like Sonopia - a startup by the guy that started Symbian, former VP Microsft Mobile, former President for Macromedia, etc his plan is all about providing the customer what they want and simply paying the wireless co for transferring the calls and data.

[Jerry Raia]

All the carriers have to do is meter your usage. Verizon is already making noise about doing just that. They ultimately control the faucet.

[edgar]

Oh, I agree, in the 90's it was the same for internet access. You paid them per byte or at a max bandwidth using 95 percentile numbers etc. Now you pay simply for the line and only pay extra if you burst excessively over your data rate. This now being more of a SLA support type of cost then a true "using bandwidth" type of thing. At my last place we had 6 T3's running across OC3. We consistently bursted above our "allowed bandwidth" but never paid extra unless we modified our SLA or support agreement.

Like the Internet Access industry in the long run, as the market segments and services become more defined the consumer will buy the product they are using and the access fees will be rolled into that cost. This will reduce churn rates, provide services closer to what the consumer wants and reduce costs. For example, a large membership enterprise like AARP with 37Million members in the US could purchase bulk time and data on Cingular or T-mo (whomever) and rebrand phone units as their own, sell a service that reminds you to take your meds, pay your bills, deliver information focused on them (such as Medicare, Social Security, elder law, etc). And AARP would charge you a fixed amount for the service. Cingular would sell AARP a huge amount of bandwidth and minutes at a reduced cost. Cingular wins with a defined fixed income of a group with millions of members, AARP wins with a defined market of delivering their product and the consumer wins with a fixed cost of service delivering what they want.

Then of course you'd have hybrid services, much like you do now when you see "Welcome to Joe's Blog site, powered by Google". Segmentation of the market will drive competition and Wireless carriers will become bulk resellers just like long distance phone carriers did.

I'm confident in this. Let's mark our calendars to revisit this thread in 2-3 years :)

Loser buys dinner, we'll meet in Monterey - half way from LA to SF.


-Edgar

[Jerry Raia]

I'm confident in this. Let's mark our calendars to revisit this thread in 2-3 years :)

Loser buys dinner, we'll meet in Monterey - half way from LA to SF.


-Edgar

You're on. I'm up in SFO and SJC all the time. You won't even have to drive far to pay up! :lol:

[edgar]

Ok

And it has to include wine and a nice place. No Wendy's or Carl Jr's!

April 13th 2008 I'll be eating at Le Papillon or such - all on Jerry!
And no shutting dowm SPT before that!


-Edgar


Hmm how do we get Temporale in this so he has to buy for both of us?

[Mike Temporale]

Hmm how do we get Temporale in this so he has to buy for both of us?

Bah! Not a chance. :D

While I would like to think that someday the wireless networks will be nothing more than a service provider (WSP), I don't think it's going to happen anytime soon. They are doing everything they can to ensure that they don't just become a connection provider. They want to be the one selling you music, entertainment, and anything else they can.

[hastings]

Agree that we won't see any movement on this in the next year or so...Yahoo and Google are no where near ready. But in 2-3 years, it'll be interesting to see what has happened!