I suspect that most people involved in the mobile industry would acknowledge both the phenomenal growth in mobile internet usage and the increase in relative importance of mobile internet services to wireless carriers. With data revenue growing and mobile internet services becoming a larger slice of that revenue, it becomes obvious why this is of increasing interest to carriers. Also, in mature markets, carriers look to offset the erosion of revenue from traditional voice services.
The opportunities for carriers in the new world of the mobile Internet come with their own challenges. The volume of data that must be carried across the network due to the uptake in mobile internet usage is growing at a significant rate. This uptake may seem like a positive trend that would drive an increase in data revenue. It is only when you realize that the increase in infrastructure investment required to support the data growth outstrips the increase in data revenue that it becomes evident that the current model is unsustainable.
There are a number of options available to address this disparity between cost and revenue. For example, one option would be to move away from the ‘all you can eat’ data tariff approach and introduce tiered pricing for mobile internet services. Another approach would be for carriers to determine how they can effectively add value within the content and media ecosystem in order to create new revenue streams around mobile data.
Considering the options available at a conceptual level is one thing. However, carriers will ultimately need to step through a process of evaluation and decision-making regarding their mobile internet services and how they can most effectively monetize their network assets. For such a process to be effective, it must be informed. The carrier must be able to understand its customers in order to provision mobile internet services to address customer needs - while also delivering a commercially viable product.
This is where most mobile internet services fall short. In the vast majority of cases, visibility of user behavior patterns and content consumption is not available. Even where it is available, the level of detail is insufficient to enable effective decision-making and often limited to the carrier’s on-deck content or oriented toward network-focused metrics. Also, the information is frequently suppositional and based on small sample sets. This should not be the case when the data is carried over the carrier’s own network. So how big an issue is this? Should carriers really be that concerned?
I believe that carriers do have an important role to play in the new world of the mobile Internet and that there is enormous opportunity for them. After all, carriers have the potential for an intimate relationship with their customers through what is arguably the most personal communications channel – the mobile device. The perspective that it is just a matter of time before carriers will need to adopt a low-cost ‘utility’ business model is seriously flawed.
Marketing executives and managers within carriers need to be empowered with information and insight so that they can act, ensuring that the industry makes the most of the opportunity for customer intimacy. In order to seize this opportunity, they must have factual data about their users and what they do on the Internet. This is the key to unlocking business value that will successfully address carriers’ current revenue, cost and profitability challenges.
-Kingsley Harding
