Wireless Operators Getting the Runaround

FierceMobileContent published an article today about a report from Pioneer Consulting discussing how mobile operators are facing peer-to-peer pressure. Specifically they refer to the incredible growth in user-generated content on mobile phones and people effectively bypassing the operators networks to distribute and share this content with their family, friends, and social circles. This content is the usual of what you can imagine with multimedia capabilities on mobile phones improving as they have: pictures, audio clips, video clips, music, ringtones, etc.
The article states, “a significant percentage of multimedia content on mobile handsets is either user-generated or just stored on the device, Pioneer reports that a growing number of subscribers are now exploiting alternative technologies like Bluetooth, WiFi and WiMAX to effectively bypass operator networks when sharing their content with friends, family and social networking contacts. The study suggests subscribers who circumvent the traditional content value chain could rob operators of as much as $16.4 billion in potential annual revenues by 2012, more than a quarter of the projected total revenue for the year in question.”
More than a QUARTER of the projected total revenue for the year!!! That’s $16.4 billion with a B! If I were any one of the usual suspects (AT&T, Verizon, Vodafone…BTW, check out this article also on FierceMobileContent where Verizon is pressuring Vodafone to sell its 45% stake in Verizon, where it looks like Verizon wants a bit more autonomy to be “the hunter” and own its own destiny), I would take serious note of these stats and projections.
The only thing that is sad about the article is that users are forced to use highly user-unfriendly technologies like Bluetooth and WiFi. I don’t buy the WiMax part given that there is no such peer-to-peer capability in the WiMax spec (802.16j is not fully ratified, to my knowledge) and besides, there aren’t enough WiMax capable handsets or devices connected to WiMax networks to share a picture with anyways. But Bluetooth and WiFi are certainly capable whether direct mobile-to-mobile (for Bluetooth) or via an access point to a PC or other mobile WiFi-capable device (for WiFi). The sheer pain of dealing with “bonding”, SSIDs, and associating with APs are about as easy for users as a self-driven root canal or impressing Gordon Ramsey on Hell’s Kitchen with my “gourmet” frozen burgers on a rusty BBQ grill. But it appears that the Control by the Consumer trend continues to escalate with increasingly noticeable impact to the wireless operators prehistoric business models and walled gardens.
I wrote a while ago about a company named TerraNet who was doing a GSM phone hack to make them capable of communicating peer-to-peer and bypassing the operator radio network effectively forming ad-hoc networks of GSM phones. Similar to mesh networking where mesh nodes discover each other and form their ad-hoc network for communicating with each other (see a former startup of mine, Firetide, for an example of mesh networking infrastructure). TerraNet has a darn good start to making the user experience of direct mobile-to-mobile communications easy…and they’ve done it via the GSM radio of the handset.
What I’d like to see more of are easy to use and intuitive software apps and UI’s on handsets that use the Bluetooth and WiFi radios in them to facilitate the peer-to-peer communications and sharing that Pioneer Consulting warns operators that they need to realize and find a way of embracing, else major hemorrhaging of value-add services revenue.
One operator who does seem to have a clue on making use of these non-cellular radios in handsets is T-Mobile USA in their Hotspot@Home with unlimited calling while at home connected over their WiFi access point connected back to the T-Mobile core network. In essence a “femtocell” without the pain of the frequency planning or spectrum management. But taking the same advantage of femtocells and using the customers Internet access link at home for “free” backhaul to the core network…FABULOUS model of eliminating a BIG CAPEX problem for themselves.
Hey, TMO! How about a cool Java app that does photo or music sharing over the same WiFi radio you’ve enabled on your dual-mode phones that customers can use all they want? This could create some serious stickiness and up the Cool factor! Actually this call-to-action goes out to all our favorite wireless operators…might be a good time to think about how to embrace the Customer Owns Their Content trend.

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