Coming off the 2010 Mobile World Congress event, one of my key takeaways is that the groundwork is starting to be laid for what the "operator of the future" might look like. This is not the traditional "smart pipe vs. dumb pipe" argument. Rather, leading operators should be undertaking a broader re-think, recognizing that:
- The competitive landscape is changing, rapidly and radically
- The pace of device innovation has accelerated, which means 4G will be leveraged far more quickly than 3G was
- Data is the main growth driver of this business, yet wireless "economics" are not Internet "economics"
- There are core assets that need to be unlocked, taking operators out of their traditional comfort zone
Here are four guiding principals of what I think this new world might look like.
1. Disappearing distinction between voice and data
The Verizon-Skype announcement was an important signal here, analogous in some ways to the fact that WiFi, initially perceived by the operators as a threat, has become a lifeline. With capable 3G networks and progress on voice over LTE, I believe a few years from now, a customer will have an "access plan," rather than thinking about "voice" and "data" plans. They'll buy an X number of gigabytes "bucket" from their operator, with much greater flexibility about how those bytes are shared across multiple devices, or even individuals. Think "family plan," for data. A MiFi or Sprint Overdrive type device will be the core, portable "access card," with numerous other devices drafting off of it.
2. Economics will be front and center
Even with 4G, the realities of wireless economics be an important governor of what people will be able to do with their mobile devices. Current assumptions peg the cost of delivering data in a 4G world at about $1 per gigabyte. Today's average broadband household consumes 10 GB to 15 GB, but that number is growing nearly as quickly as mobile, given video and other rich media. As an example, Comcast recently sent a letter to its subscribers, inviting them to "view their data usage" while at the same time essentially capping them at 250 GB per month.
When a customer wants to download a 10 GB movie on their mobile device, they might be flashed a message to "switch over to WiFi," or incur a premium charge--similar to how the HD version of a movie on iTunes costs extra. One can see how femtocells might play the role of residential traffic gateway.
3. Operators are out of the "product" business
When is the last time you saw a major, national product launch from an operator that wasn't a new phone, price plan, or network-related message or enhancement? The app store phenomenon has certainly caused a re-think of what a product (a la VCast, Navigator, and so on) means, from an operator's perspective...Continued