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Submitted by Industry Comment on Fri, 08 Feb 2008 13:34 |
Barcelona is the favourite haunt of people preaching what they believe the industry wants to hear – rather than addressing the business issues facing companies in the real world.
Next week, the Mobile World Congress adjourns in Barcelona. Once again, this year more than 55,000 people from across the wireless industry will converge in Spain to discuss, explore and debate what the future will bring.
Not only is the Congress the place where the entire industry meets. It’s the Mecca for PR agencies working hard to hype their clients’ products and solutions to a level far beyond reality.
Barcelona also the favourite haunt of people preaching what they believe the industry wants to hear – rather than addressing the business issues facing companies in the real world.
So what will the MWC offer in 2008?
We believe you’ll see five key focus points – mobile broadband, mobile broadband, mobile broadband, Internet on the mobile and value added services.
The strong focus on mobile broadband is something we don’t wish to challenge. Already today, thanks to the technology, a long list of operators in Sweden, Austria, Denmark, Poland, Finland, Spain and the UK are reporting growth rates that you’d need to dive into the history books to find. The real question is how fast mobile broadband will grow, and what will be the right business case. Flat rate, YES, but at what price? At the MWC, we are sure to meet operators, politicians and experts, all of whom will in due course talk about how important mobile broadband is to society. In countries like Austria, 3G and HSDPA have already made it possible to deliver broadband to areas where fixed-line copper is of low quality. In Australia, mobile broadband is supplied over great distances with HSDPA utilizing 850 MHz.
Wireless technologies are set to become the nerve centre of our future society.
We believe that 2008 will be the year when a number of players, such as Nokia Siemens Networks, Alcatel-Lucent and Ericsson, will tell us how broadband will grow in the future – and how with technologies such as LTE, broadband will grow faster than customers are demanding. At Strand Consult we seriously believe in mobile broadband. And at the MWC, we believe a lot of information will start to appear indicating that the mobile broadband market will be larger than the fixed broadband market.
mobile broadband is the future
One big question we hope will be answered is how operators will ensure that their backbone is able to keep up with the capacity that the new base stations will require to service all these new broadband customers. We also look forward to hearing whether mobile broadband should be included in the package when a person purchases a fixed broadband connection – and if not, how it will influence players that cannot provide fixed or mobile broadband.
The MWC will confirm that mobile broadband is the future. However, there needs to be a much clearer understanding of the business models capable of driving a return on investment for operators.
The alternative is falling prices, which will lead to a consolidation wave in Europe, where 70 operators service 300 million customers. In the US, just five operators serve the same number!
Three Kinds of VAS Players
Meanwhile, we will see three kinds of players in the VAS market: the classical players, which develop, market and sell technology; the Internet players, with limited knowledge of the mobile world and which seem to believe that it’s all about delivering Internet on the mobile. And then you have the ones offering the operators platforms so that they can copy Internet successes such as Facebook, Youtube, MySpace and Google into the mobile space.
In our opinion, these players should spend a little time at the MWC getting to know the industry better. Maybe then they would realise that the Internet on the mobile is not about squeezing the content of a 17-inch screen onto a 2-inch one. In other words, innovation in the mobile world is not about delivering white label platforms to operators so they can do their own versions of FaceBook and MySpace. Just because you buy a football, 11 pairs of shoes, shirts and shorts doesn’t mean you’ve created a new football club to rival FC Barcelona or Manchester United!
We’d recommend they study the solutions offered by terminal manufacturers like Nokia, Sony Ericsson, Samsung, Motorola and Microsoft. In the future, all of them will bundle their terminal solutions.
They should look at the business models that are the foundation for the partnerships technology and Internet providers will have to engage in with operators across multiple countries. The future VAS market will be based on a model that Telenor gave birth to, and which was copied by most operators. Exclusive agreements between operators and internet/service providers don’t stand a chance in a world where customers want the freedom to choose their operators, terminals and service providers.
What Apple & Google Could Learn There
At this year’s conference, we will see a growing number of players admitting that the walled garden strategy is not the way forward in the globalised mobile world, and that success is created through partnerships – whereby unique technology is distributed widely via media companies, operators and terminal manufacturers.
We believe it would be great if Steve Jobs sent a couple of his best executives to Barcelona – and we’re not talking about the PR guys! They could learn quite a lot about how this industry works, and maybe they’d be able to give a good explanation to the Board as to why sales of the iPhone in Europe were so BAD.
Google, meanwhile, could learn that the prerequisite for a successful OS is to get onto the terminals, and that success is proportionate to the number of terminals your OS is on. Were would Symbian be without Nokia? Who is going to give Google volume in this market?
Surprises
This is also the week in which the greatest amount of news in this industry is announced.
We are looking forward to some very exciting days in Barcelona - the Mobile World Congress will again surprise many people this year and even though we will go home with many answers, we will more than likely have a number of new questions that will need answering next year….
John Strand www.strandconsult.dk
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