Challenge your mobile operators!

In general the development of new mobile services has stagnated. This, despite new technology and advanced mobile phones. Only a few markets such as Finland, Japan, and Norway are really prospering.

Why is this?

Blame the telecom operators. If you analyse the worldwide markets, there is a clear explanation when and where there is a failure or success. In successful markets the telecom operators focus on:

1. Making it easy for consumers to use their mobile phones. It should not be difficult to configure my phone to be able to MMS, WAP, and surf, i.e. use mobile services.

2. Offering attractive prices for consumers.

3. Giving mobile content suppliers a considerable chunk of the revenues to ensure that the array of services continues to grow.

4. Making it easy for content suppliers to produce content for this platform.

Unfortunately, most operators are not making it easy for consumers. Few (consumers) go beyond talk and text (SMS) because it's too perplexing to get the settings right. Also operators are taking between 20-80 percent (depending on the country and the operator) of the revenues of your business just for providing the infrastructure. It's like the post office taking 20-80 percent of a paycheck if it is sent via mail.

I do believe there are other important issues that publishers need to fight for. But most important is for them to make operators know that they can only expect growth from a more market-oriented situation or approach.

The solution is not by offering mobile video messaging or even more advanced services. I urge you, the publishers, to stress to operators worldwide the importance of establishing a sound market approach described in points 1-4 above.

The precondition for business in mobile content is a fair revenue share. For example, in Japan the content providers keep 91 percent of the revenue. This model has been in place since 1999, i.e. the start of i-Mode. Today there are more than 86,000 content portals because of this stimulating approach. Also, the use of content is high because of the wide offer of services.

I am sad to say that in Europe content providers keep only 20-50 percent of revenues, and in other parts of the world it’s even worse, such as in the United States and India. But some “new" markets, especially China, are taking 85 percent from the beginning and try to make points 1-4 work. By doing this, the thriving China market has grown incredibly fast. There are a few other good exceptions around the world, such as Finland, Norway, and the Philippines.

It is also strange to hear the telecom operators talk about the next generation of mobiles and how they are planning to earn more money on data traffic, yet they are not doing anything to try to stimulate this. What could they do? Take Norway – there they are selling preconfigured mobile phones featuring bookmarks for newspapers like VG. Now that's easy for consumers and they use it.

To me, most of the world's mobile operators are not close to finding the right models and practises to enable the next wave of mobile content. News, “infotainment” and the like are far greater services than music and mobile games. Don’t get me wrong, I love getting music on my SonyEricsson. But it's not enough to create great customer value.

In the end, mobile services is not a big revenue market for publishers, but it can be a vital tool for ad sales, interactivity and to create customer loyalty – if it is done correctly.

Page first published: 04.09.2005