Telecom Operator as Dumb Pipe?

In the heady early days of the Mobile Web, telecom operators proudly proclaimed that they would not go down the path of their wired ISP brethren and become “dumb pipes”. They would control the media and services built around the mobile web unlike the AOLs of the world. So they built what they called, a “walled garden”- an operator controlled portal to be accessed by subscribers. The operators in their desire for total control decided to build services and products on their own and limit access to the open internet. Subscribers, on the other hand, resisted and wanted more from their wireless internet services. So operators instead of partnering with the popular service companies and building customized monetisable services for their subscribers decided to do what they resisted in the first place- open the floodgates and replicate the ISP model of allowing unrestricted access to the web.

So now you have telecom operators peddling unrestricted FREE internet services on their phones in their desire to get the subscriber on to their data plans. This has lead to subscribers accessing FREE Sports scores and News on the mobile Web. You know that the business model of the mobile web is all wrong when the most profitable services on SMS-Sports scores and News, are being made available for FREE on the mobile web. The content companies that provide these services for free on the mobile web, in their quest for eyeballs have, for lack of a better word, foolishly replicated their business model of the internet where services are ‘ad supported’. There are already murmurs of discontent brewing about how this ad supported model of offering free services on the INTERNET too is a business model that doesn’t make sense.

As mentioned in my previous post, the mobile web allows for great exciting possibilities of revenue generation and these must be exploited by content companies as well as the operators. The subscriber is accustomed to paying for services like news, sport scores, astrology on the mobile sms/web till now but with growing access to free services, he will expect these services to be free- that expectation will be death knell for the operators and the content companies.

With the specter of recession looming large and mobile advertising hard to come by, it is more important now more than ever that Content companies and telecom operators go back to the drawing board and chart out a new saner business model where both parties thrive and subscriber interests are protected too. Telecom operators must take charge of this before they become irrelevant commodities in the brave new world.