As the buzz around last week’s Mobile World Congress in Barcelona subsides, some are questioning its future. Despite 60,000 attendees, dozens of launches, announcements and keynotes from industry luminaries there is a feeling that the real action is elsewhere.
We did see the arrival of the Chinese devices giants Huawei and ZTE – already major players in unbranded phones and with clear ambitions to build strong brands. But Samsung chose not to announce their next Galaxy smartphone – instead planning to launch on Twitter in the next few days. And Apple – as ever – didn’t show up but stole attention anyway with the news of their event on 7 March, which is rumoured to be the launch of the iPad3.
Google, Facebook and Amazon, the companies who essentially run mobile and digital, don’t take MWC that seriously. Facebook did announce their support for mobile web apps and HTML5 – which is going to be very significant over the next couple of years. But their key people were in New York selling their new advertising model to Madison Avenue. Google invested heavily in support of Android and mobilised the sites of many of Barcelona’s tourist attractions. But Apple and Amazon weren’t there and few of the startups that generate so much of the energy in mobile showed up either.
The operators – the people that used to drive the industry, and who still have the power to generate huge momentum in mobile – were (predictably) there in force. There are signs that, having been written off as dumb pipes by many, some operators are looking for ways to reclaim their throne. With their revenues under pressure from new legislation (significant cuts to roaming charges and lower termination rates) and changes in behaviour (leading to a $14bn (£8.8bn) hole in SMS income) they need to evolve their business models.
With huge customer bases, a billing relationship with millions and control of the plumbing that makes mobile work, operators should be able to compete with the big players such as Google and Apple. They have the potential, and the marketing budgets, to take useful mobile services mass market.
Project Oscar – where the key operators plan to collaborate on a mobile wallet (subject to regulator approval) – is a good start but doesn’t seem to be solving the right problem. Why can’t operators use their size and customer knowledge to create the context where a mobile wallet is truly helpful?
How about EverythingEverywhere helping to improve their customers’ social lives? FourSquare is hugely influential but has just 15 million users. Why doesn’t Everything Everywhere take lessons from FourSquare, Gowalla, Path and others to create a mass market service for people to share their social life using photos and locations. Build in ways that Everything Everywhere customers can invite their friends on other networks, but reducing the utility for non-customers. So, on a night out, their customers can find friends and share where they are and where they are going next. Layer on offers from bars, clubs and cinemas that are actioned through the wallet, and you have a social tool that can drive revenue and reduce churn. And give those on other networks a compelling reason to switch. Diageo did this sort of thing 10 years too early with NightFly.
What about O2 making shopping a better experience? One idea is a mobile service where customers can scan a barcode on any product, read reviews, check the green footprint and compare prices. On food products, they can check health information such as calories and whether it contains trans fats. They could also create a mobile loyalty service for small shops where customers can check in with their mobiles to receive offers tailored to their preferences. I suspect that fast-moving consumer goods (FMCG) brands would love a way to target offers and coupons that isn’t controlled by the supermarkets. This creates real context for a mobile wallet.
Similarily, can Vodafone make our commute better? Information on buses and trains is available in real-time in most cities and towns; so why not develop a mobile service that knows where you are and gives you the information you need; the time of the next bus at this bus stop, whether the next train is on time etc. Add in the ability to share your location and speed when driving (hands-free of course) and Vodafone has a crowdsourced traffic service sharing delays and issues on the roads. All they need then is a way for customers to quickly and easily order a taxi – and pay for it on their mobile bill.
Some of these services already exist but have small user bases and tend to be standalone rather than converged services. They have huge potential outside of early adopters and operators are perfectly positioned to help them cross the chasm.
These sorts of service are a natural extension of the original business model of an operator – services for their customers that maximise use of their networks and drive additional revenues and reduce churn. They would differentiate an operator more effectively than their latest 30-second TVC.
One argument against these initiatives is that they could work better if available to everyone, rather than just customers of one network. Which is true, but we have an emerging industry that is largely about peddling these sort of ideas to customers of just one device manufacturer. And the three big operators each have around twice as many customers as Apple does in the UK.
Given that operators spend about $350 to acquire each new customer perhaps they should make these services available to everyone and use them as a smarter way to recruit new customers. It’s easy to identify the operator and device of users, so very relevant offers can be delivered as advertising.
Operators have a huge opportunity and it’s time for them to step up – or leave these converged services to Google, Facebook and Amazon, and just accept playing the role of a dumb pipe.