Monday, 2 March 2009

Mobile broadband customers want it, telco's don't get it

Four stories came together today:

  1. T-Mobile NL reported that iPhone users surf the web 30-40 times more than other mobile data users. In the first half of 2008 the usage of mobile data at T-mobile grew from 2.5TB per week to 3.1TB per week. In the second half this grew from 3.1TB per week to 20.5TB per week. An eight fold increase !
  2. Ars Technica reports that the mobile industry's price plan is discouraging the usage of mobile data. The way they do this is by giving every device a different price plan and discontinuing price plans that become too popular for their price bracket. The article also mentions devices like Kindle that come bundled with bandwidth but are often limited in what they can do over the network.
  3. The iPhone App Store is the best App store around and we'll see it and other app stores making loads of money in the future. ABI projects mobile app sales to rise from "hundreds of millions of dollars" this year to over a billion dollars in 2010.
  4. Orange and O2 in the UK are up in arms over Nokia's idea to put Skype by default on the N97. They threaten not to sell it on their networks . (Thanks to Hendrik Rood on Arch-econ-mailing list.) The best quote is: One operator source told Mobile: ‘This is another example of them trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe. Some people like 3 may be in a position where it could make sense to accept that. But if you spend upwards of £40m per year building your brand, you don’t want to be just a dumb pipe do you? ‘Nokia have tried several ways to own the customer over the years and operators have had to say no.’
What amazes me in the stories is that it shows that the holy Quadrangle is there:
1. Users want it
2. Device makers can make it
3. App developers have the software
4. Networks can deliver it
Except the last one, the network, doesn't want to play anymore. They are taking the football home, because they can't be the star player of the team. They don't want to be a bit pipe. "Yo no soy marinero, soy capitan". 

This is what is killing developments in the mobile market. The kid that has the football, but no talent to become the star of the field, only wants to play if it can be striker and make all the goals. It could have a great afternoon playing football. None of the other guys on the pitch wish it anything bad, they are willing to share their candy with the network. (nobody says networks shouldn't make a return and T-mobile NL made 352 million Ebitda on 1.8 billion turnover this year alone)

Why do we continue to let incompetent sales and marketing people call the shots at Mobile telco's? Accept that your a pipe... not a dumb one, but a smart one. Lean, mean, charging everyone who wants access and not involved in all the pipe dreams of the over the top providers. Tomtom, Amazon, Smart Meters need access for devices, sure pay a little and your my friend, Europe wide, sure.. 

If the telco got out of the way, bandwidth usage would grow through the roof, because all we really want is to be connected and communicate


  1. If T-Mobile users in Germany have problems accessing the web'n'walk homepage on their new iPhones, I guess they might call Apple or Yahoo... but I doubt it! I bet 99 times out of a 100 they would call the customer service number shown on their monthly bill.

  2. As Henk D. would say: connectivity is a to product!!

  3. top product, xcuse me

  4. Of course the pipe kid wants to dream of more! Just providing the pipe is seen as an activity with only marginal profitability (~2%). Most managers want at least 15% or more. A telco I know well is stuffed at the top with marketing people. They dream of money, not telco.


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