Tag Archives: mcsp

Mobile World Congress 2008 Barcelona

Next week in Barcelona we have the yearly Mobile World Congress, the biggest event of the Mobile industry. The theme for this year is “Ubiquitous Mobile Services”, but could have been well re-named as “Ubiquitous transformation”, as the industry is more than ever in a continuous change.

What are the main axes on which the industry is transforming, on which there will be a focus in Barcelona?

Universal Broadband:Wimax, Long Term Evolution (LTE) and 4G. Femto cells as part of the Digital Home
IP Transformation: “all-IP” networks are a reality for the transport and the Core Network. Evolution to IMS to enable Multimedia Services blended with Internet and Web 2.0
Mobile Entertainment: Broadcast Mobile TV, Interactive TV and Advertisement. Monetizing the knowledge of your customers. Enabling UGC
New business models: MVNO, wholesale, RAN sharing
New handsets: convergent smartphones (mp3, phone, camera, PDA, video, wifi, email…) with iPhone as a reference, as well as future Android. Also new terminals for specific use bundled with applications: health-care, metering, surveillance, automobile, or Amazon Kindle

Mobile Operators are threatened by smarter phones, and by Internet players, to become dumb pipes or pure Mobile Connectivity Service Providers (MCSP). Many MSPs will show in Barcelona how they are transforming, or planning to, to avoid becoming MCSPs. We will report it from Barcelona next week.

MSPs towards Mobile Connectivity Service Providers

Nokia N81 ovi

In the past, Mobile Service Providers (MSPs) have successfully managed to keep full control -and get a share of revenue- over the premium content delivered over their networks. MSPs were determined to retain customer ownership, and so MSPs created walled gardens under their control.

Thanks to that model, MSPs have been enjoying good revenues from premium content downloads -ringtones, ring-back tones, logos, games, songs or videos-, premium SMSs and premium rate voice services (80x numbers). To get these revenues, MSPs have not invested much in promotion, advertisement or improvement of the premium services. So far, MSPs owned the customer billing relationship, and simply taxed content providers to reach the mobile operators customers, leaving many times the promotion on the content provider side.

As mobile data bitrates increase with 3G (UMTS, HSDPA or EVDO), and as handsets become more intelligent – iPhone, Android, Windows Mobile or Symbian-, MSPs premium content model is under threat.

MSPs does not seem to realize that if they do not invest in improving and promoting their own value added content services, they will be bypassed by Content Providers, and will be relegated to Mobile Connectivity Service Providers (MCSPs), or in short dumb pipes.

Recent news about Ovi (Nokia’s content services venture) rolling our N-Gage games confirm the threat. iPhone will kill any music download service an MSPs could have, to be swapped by iTunes. Google already has applications like Gmail and Google Maps, that can be installed in most smartphones. Unlike with RIM, operators do not get any revenues from the Gmail in mobile phones. This will not improve with Android.

Data usage is the only revenue MCSPs will be able to retain, but with the move to data flat rates, MCSPs will not even benefit from the growth in these services.