For the last decade, network operators have been touting data as being the way forward for revenue growth. With the exception of SMS, this promise has largely been empty. WAP was a failure and MMS failed to achieve note-worthy volumes. Network operators around the world rolled out application after
application in the hope of spurring data revenues, and while several succeeded, (most notably NewBay Software) most failed to achieve targets.
The iPhone has changed all of this. The Internet, in all its glory, has truly come to the mobile phone. From poker to porn, the iPhone has it all. However, no sooner had the reality of true mobile Internet dawned, than the network operators hoisted themselves by their own petard – pricing.
Pricing is something that most network operators should be proud of. It is with complicated and well-costed pricing that they have managed to keep Average Revenue per User (ARPU) at its current value. However, when it comes to data pricing, they seem to have lost the plot. Let’s use my price plan as a guide.
With O2 Ireland I essentially pay €10 a month for 1 GB of data.
Now I don’t know about you, but for me, a Gigabyte of data is quite a lot– about 250 MP3s– every month. Even if your iPhone’s battery could hold the charge, your phone would literally melt with this amount of data! Fundamentally what this means is that O2 have given you all the data a normal person could possibly
process in a month, for the very low price of a tenner. And I’m sure they are aware of how easy it is to lower the price a consumer pays for a service, and how difficult it is to increase it.
So it would seem that all of the promise of future earnings from Data (SMS & MMS excluded) comes down to a tenner. That’s it. All the money spent on 3G licenses, all of the investment in new technology, the man centuries of blood, sweat and tears, boils down to a ten euro charge to the consumer.
So with market saturation a reality, data revenues being sold off for a tenner and retail customers with decreased spending power, where is future revenue growth going to come from? Well, I think it’s from voice. And I don’t think it’s because we are going to talk to each other more. After all, I think
the past decade has taught us that we don’t like talking to each other very much. It seems that we would rather deal with frustrating web user interfaces than talk to a real, live customer service rep.
I think that there is new era of internet applications upon us- applications that are controlled by voice rather than by keyboard. Network operators are in a unique position to take advantage of it. Imagine controlling your Facebook updates or booking a hotel online by just looking at your screen and talking.
It is the iPhone application development environment working alongside the recently announced stereo Bluetooth that will make this all possible.
What the operators need to do is provide the backend infrastructure and APIs so that Internet application developers can access core functionality. Such services could include voice recognition, access to CDRs, the ability tomake and receive calls, and other IVR functions. In my view, operators should make no attempt to develop or deploy applications themselves, they should simply make the infrastructure available to the army of developers that is eagerly waiting.
Something that operators need to be careful about is price. There should be absolutely no barriers to any application developer. Applications should be free to use, with the operator making revenue on the minutes clocked up when users access the application. It is my belief that if the infrastructure is
easily available, independent developers will create thousands of applications in arenas that we could never have imagined, earning billions for operators worldwide.
