How do incumbent mobile operators plan to confront the growing 'open access' of wireless networks?
I would like to hear from those directly knowledgeable of how your company or customers among incumbent mobile operators plan to hold onto revenue when confronted with developing momentum behind open access wireless networks.
Key points of interest:
1) Can the 'walled garden' approach keep up with innovations of an open access, and user selected applications and content environment?
2) Is open access necessarily disruptive of overall revenue models or can it be structured to be complimentary as new sources of revenue?
3) How supportive are incumbents to European, U.S., and Asian efforts to reduce data roaming charges and ferment open access business models? (Most efforts and individual incumbents advocate 'freedom' for setting their own agendas in regards to open access/walled gardens. The question is aimed at how this may be shifting to accommodate or continue to mount resistance to open access policies and commercial developments including WiMAX and open IP access envionments in general).
Clarification added July 23, 2007:
XG's xMAX is a disputed, unproven wireless system/technology and is not being considered by the majority of operators. I did not direct this question at outlying technology developments. On the periphery, xMAX represents the general shift to IP based wireless but it must deliver both technical advanage and commercial development to become a factor.
xMAX is yet unproven: claims have been disputed and, some experts assert, debunked. The roll out of VoIP service in Florida must be judged on the ability to compete both from a technical perspective and as a competitive offering. The market has shown limited interest in VoIP only Wi-Fi phones and there is little reason to expect much greater demand for VoIP only WAN phones. Voice is a limited and waning business proposition. If/when xMAX delivers multiple services inlcuding higher BB, it must be able to do so in competition with evolving 3G and WiMAX/LTE 4G capabilities. To do that, xMAX must deliver on several points including spectral efficiency, scalability and network management. These factors won't be known until they are exposed: apparently not until commercial service is delivered because XG has not volunteered disclosure of their technology in sufficient detail to form an understanding of whether it is viable.
So, XG is off the board for this discussion.
Robert
Good Answers (2)
Michael S
Chief Executive Officer of Amethon Solutions
Best Answers in: Wireless (5), Telecommunications (2)
Here in Australia, Hutchison (3) has lead the way in terms of opening up their walled garden. They have a specific page in their ondeck portal with links to some popular off-deck content as well as specific pricing plans for off-deck browsing (A$5/month for 10 Mb). In fact, you can't browse off-deck unless you sign up to this package to avoid customer's being hit by the standard data charges.
My sense is that Hutchison has realised that off-deck browsing is inevitable and are trying to at least get people signed up to regular monthly subscriptions.
This does not mean, however, that their business strategy is about becoming a dumb bit pipe. They continue to focus on delivering compelling content and services on-deck because at the end of the day, mobile phone are about convenience. Most people would prefer to be able to access the information and content they want without having to type in URL's on their handset or navigate through multiple layers of links.
The vast majority of off-deck content (i.e. the internet) doesn't render satisfactorily on a handset (even with the iPhone) and the operators are in the best position to manage and guarantee the user experience in this respect.
For these reason, I think on-deck vs off-deck will follow the 80/20 rule assuming the operator can get their on-deck experience right.
I also think that by understanding what consumer's are doing offdeck, they can selectively choose to bring that content or those sites ondeck and potentially make it more cost effect for the subscriber through a monthly subscription rather than a data charge.
Cheers,
Michael
P.S. I don't work for Hutchison in case you are wondering. I have been a customer since they launched their 3G network here in 2003 and they have been a customer of mine in a previous role.
Links:
Harry A
Founder/CEO, Bluenowhere (Mobile WiMAX, Urban/Rural Broadband)
Best Answers in: Economics (1), Wireless (1)
I would say mobile operators need to embrace open networks. I think mobile operators will eventually become dumb transport networks, charging for bandwidth, QoS, etc. Their value is the network connection to the user device. They need to get over this idea that by selling voice services that they add any value whatsoever. The value is in the network not selling restrictive services. They must open up their networks on a wholesale basis and allow innovation on both the device side and the application side. Then sit in the middle.
Re xMax - i dont see the point. Great for multicast but not for anything else. Distance is not an issue once you have some customers, capacity is. To start with the low cost of deploying a network is attractive, but when you start deploying loads of cells with a similar distance to other technologies you lose the advantages of xMAX and might as well go for another technology. Capacity is key.
More Answers (2)
I think mobile operators will finally wake up when xMax becomes commercially available in August
Reference
http://www.xgtechnology.com/updates.asp
http://www.xgtechnology.com/technical_documents.asp
www.xmarksthefuture.com
www.farreachtech.com
They are confronting this the same way that they do with most: where is most money going to be made? Right now, they are trying to wrap up info, services, ringtones, whatever and present them to the user in an enticing manner. Of course this necessarily limits some access. But if I really want a cool phone from europe, or to access a great website, I can almost always find a way.
There are many opponents of the walled garden approach, but it worked for the television networks for decades and only with the advent of cable did we see a good alternative, now with the internet, all we see are alternatives....but the majority of us still watch broadcast tv shows, even if it is through the web or cable access.
so my answer to all of your questions is if there is money in it, then they will find it.
