U.S. operators are quietly and cautiously moving into the advertising-supported mobile content realm as a way to expand data consumption and generate more data revenues as monthly recurring charges for content begin to hit the ceiling. Several operators already allow existing content publishers that reside on the carrier's deck to insert in-house advertisements, and they are looking at bringing outside advertising onto the carrier deck as a way to subsidize content on their portals. While operators are careful in this arena since they don't want to annoy customers or invade their privacy, they also know there is a limit to how much their customers are willing to pay for content. Advertisers see a captive audience with the millions of mobile customers who turn on their handsets everyday.
We'll see many experiments in this area as carriers delicately look for ways to create acceptance of wireless advertising without turning off the customer. Content provider Mobileplay recently launched an advertising-driven service that delivers free games, news, weather and other services to PDAs and smart phones. We'll see how that catches on. Free services are very enticing, but the mobile phone, unlike the Internet, is also an extremely personal device, making advertising a tricky proposition.