Mobile industry turns recession buster
As featured on TM Forum’s the Insider Blog
Let's get one thing straight. There is no recession in the mobile telecommunications industry.
Anyone present at Mobile World Congress in Barcelona last week for the annual tapas and telephone fest will vouch that it was the most energetic, positive and crowded event in years, attracting a mass of new peripheral players that are finally seeing that connectedness is everything.
The Insider cannot recall a time when so many different industries were represented in keynote sessions, on the exhibition floor, and in cross-industry panel discussions. On the surface it was all positive, but some of it was almost too upbeat. Maybe it was the bright sunshine, copious amounts of sangria or the hallucinatory effect of cafe-con-leche on tap, but the love-fest involving OTT players and operators seemed, at times, almost too good to be true.
Facebook was well represented not only in the keynotes but also in the TM Forum led “operators as intelligent partners” stream. Don’t let the tongue-in-cheek title fool you, this was where the likes of Expedia.com and Facebook came straight out and said they are not only actively seeking out ways of cooperating with operators, they felt it essential for their long-term growth, nay, existence.
Flanked by senior representatives from AT&T, TeliaSonera and Telus, Vaughan Smith, vice president of mobile partnering at Facebook outlined that CSPs had skill sets and reach that his company did not wish to emulate and, particularly in the area of billing, wanted to work closely with them, happy to share the revenues. His realistic view was confirmed by the fact that a large percentage of mobile Facebook users do not even have bank accounts, let alone credit cards with which to pay for goods and services online.
Facebook’s future revenue growth will come from online commerce and if customers are unable to pay, the whole exercise becomes academic. However, by utilizing the existing billing arrangements operators have with their pre-paid community, the payment issue could be circumvented. He gave examples of the dramatic uptake of Spotify sales once they launched on Facebook, and how that could be emulated by almost any digital services provider.
His views were echoed by his chief technology officer, Brett Taylor, who announced in his keynote address that the company is participating in “a number of industry-wide initiatives” intended to support the development of the mobile web, focusing on technology standards and payment enabling.
With the objective of reducing online payment verification from eight steps to one, he announced a partnership with “operators around the world to improve the user and the developer experience of operator billing.” This work will remove the need for the SMS verification step for the “vast majority” of customers, while providing developers with a single SDK to get global reach with “very, very simple” technical verification.
“That way, payments on the mobile web can be what it should be – a single step to confirm the purchase,” he concluded. Operators working with Facebook on streamlined billing are AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI and Softbank.
Jeff Warren from Expedia, now the world’s largest travel sales company, said the need to work with mobile operators hinged around connectivity for travelers wherever they are. The whole nature of the business is travel, much of it offshore, but to provide the best service Expedia needs to be in contact with its customers wherever they are to provide the latest updates, cancellations, alternative travel, etc. However, the nature and cost of roaming means that most of Expedia’s customers switch off their phones as soon as they leave their home country, and the whole value proposal is lost.
Warren wants to see how his company can work with operators to make roaming, specifically for Expedia customers if possible, a seamless and cost-effective service.
David Gurrola from Orange's consumer mobile business, in his presentation said that increasingly complex value chains meant the way operators partner with other organizations has “completely changed”, with it being “much more about bringing together ecosystems.”
Gurrola added that operators will need to become more flexible and more willing to compromise with partners in the future, as well as develop a clear understanding of the value partners can bring. “Operators must go deeper, overcome risk aversion, and act quickly in to changing roles within the partnerships,” he said.
Sounds like a future TM Forum ‘agile business case study!’