How many devices do you own? 3, 5 more? I actually checked mine the other day, 3 PC’s, 2 laptops, 2 tablets, 6 mobile phones and one internet enabled TV, frightening really. The mobile phones act as a reminder to me as to how fast technology has evolved, but what I find the most intriguing is the shift in ecosystem around the end user whether that be Corporate employee, teenager or even parent for that matter. Historically it has been the Mobile Operator owning all aspects of the customer relationship, then we had the Operating System owners now referred to as the Over The Top providers (OTT) who started to build more of a relationship with the customer, understanding their preferences and starting to have a direct financial engagement with the end user, something which the Mobile Operator had owned for so long. At this point I expect most readers look at this and think – well done good to know you know where we are at! But this isn’t about where we are it is about where we are headed.
In recent reports the industry has talked about there being more than 10 billion internet connected devices in the world in the next 3 years, this represents a significant shift from the days of asking your parents to upgrade their 64kbit Data Phone line! With such a variety of devices we can now choose how we want to communicate, interact and be engaged by our various providers whether they be Mobile, OTT or a specific platform, this is creating new opportunities for individuals to connect with niche providers as they find ways of distributing their services beyond the traditional boundaries of geography or language. Today you or may not be aware but you could find your messaging originates from the US, your voice app from Israel, your news from Germany, your games from Sweden, your online shopping from HK and your security from France (at least for me anyway)! Less than 5 years ago all of these would have been provided by your mobile operator as the single source of communication and data services some would see this as just the evolution of technology but I see this as a missed opportunity.
The most unique thing of living in a device world has been the evolution to ALL IP based platforms for all forms of communications whether that be Voice, Data, Video or even application. For Mobile Operators this is their 4G or LTE networks, for fixed operators this is the fulfilment of W-Fi canopy’s across cities, all of which ensuring access to the end user and hence the ability to offer services consistently to their customers without the risk of other providers hijacking their customers. This access anywhere offering though also means that Mobile operators and fixed operators are opening their networks to OTT’s and app providers to engage directly with their customers, some network providers have taken the approach to charge for access to these OTT or app providers or even limit connectivity to them through DPI (deep packet inspection) technology. There is another approach though and some network operators have seized the opportunity – the creation of their own ecosystems whether that be cultural or language specific applications and content which can work on any network but drives voice and data back onto their own network. One recent example I have seen is the creation of a language specific messaging and social network application developed for a particular highly migrant population, one which has been successful despite the diverse online offerings available.
Operators need to seize the opportunity and become Over the top providers to the OTT’s of this world, the Operators still have the ultimate relationship with the customer, one which – for now - is unique to them – they know who the end customer is, their billing address and their preferences for communicating with the wider world. The Operators are still responsible for the end connection to the customer and instead of defending against the “dumb pipe” analogy which is thrust upon them they need to turn this to their advantage through the creation of dynamic ecosystems around the end user, independent of device or application used yet remaining relevant based on their preferences and engagements with friends, family, colleagues and systems. Some operators would see this as a risk and for many stepping outside of their comfort zone can be a concern, but I would suggest act now or competitors will seize the opportunity and those competitors will be OTT providers and other network operators alike.
We are living in a device world and contradictory to popular belief that with so much diversification markets and solutions would become fragmented, however new opportunities are arising with the potential to actually make OTT providers just another element of the ecosystem an ecosystem which the operators both fixed and mobile can be responsible for facilitating to the end user. The world we live in remains as dynamic as the diversity of our global culture, hence the opportunity is not short term, we will continue to live in a world of devices and it is up to individual operators to decide on what role they will play … Carpe Diem!
2 comments:
Interesting dilemma for the operators. They do own the customer and the customer experience but that in it self does not drive loyalty, and churn is inevitable, site the high churn rates with the Indonesian telcos. Can an operator be a OTT? I think SIngTel seems to think so, with their AmpEd store and today's announcement of their acquisition for mobile advertising. But can that ever compete against a world full of apps developers? Probably not but somewhere out there lies the answer and likely to be a happy compromise of providing efficient connectivity/download speed and localised apps for their customers. Could work for country telco but a huge nightmare for global telcos operating country by country.
From a consumer's perspective thing may look more nasty. It is not only the carrier that faces rapid changes (and may not even know what to build when we talk about 'creating ecosystems')...
As you said, many of us already own 5 or more smartphones, 1 or more tablets, 2 laptops, a pc, etc. This urges most of us to find products and solutions that do not lock us in (or at least makes us feel we are not locked in, like Apple does).
Most consumers perceive operators as electricity companies, railway companies, gas stations, etc. They simply provide the utilities to keep things going. When any of those companies only makes an attempt to make us feel home (let alone building ecosystems for us), we start feeling locked-up.
Likewise, we need to realize it is impossible to "build" ecosystems. Ecosystems aren't built (then they fail like Google Plus and Nokia Ovi) but start off very small and grow organically. In most cases they are successful if they have something simple yet unique to offer that matches what users were looking for all along. They do start off with the dilemma 'how to monetize' but with ' how to delight'. That's why big companies generally cannot do this kind of thing. They build Frankensteins: big, strong but without a soul.
As for carriers, the best they can do is embrace newly appearing ecosystems: make sure they become intrinsic parts of them. This is done by opening up their walled gardens and allow developers to make better use of the wireless network. Offer them access to network resources and when these 'outsides' become successful they can cut deals. In fact, it's a bit like gardening: nurturing the soil (open up), sowing seeds (attract developers/brands), taking out weeds (assure security) and only then... harvest (monetize).
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