Have you noticed that mobile networks are becoming increasingly commoditized and more efficient for the consumer? Years ago, text-messaging was a value-added service, now bundles of unlimited text messages are common. And while unlimited data plans are no longer widely available, mobile bandwidth is becoming cheaper and more plentiful. The ultimate trend is that profit margins in pure connectivity and basic services are becoming tighter for mobile service providers.
Another big threat to the mobile operators is the app and social-media revolution. This puts pressure on their own messaging services, such as SMS, as users migrated to social-networking tools such as Facebook and Twitter to communicate with other users over the mobile platform.
So, as usual, mobile providers have to look for ways to diversify into new revenue streams. Clearly the app ecosystem is one place to look, although it’s unclear exactly how mobile providers can profit from apps as many apps are downloaded from third parties. In the case of the Apple OS, it’s Apple that controls the revenue channel — and clearly service providers have made little headway in breaking down that relationship.
So what’s next? Service providers have to look at a spate of new potential business models as the mobile device takes over the world. Here are the top contenders for new revenue-generating services in the mobile network:
- Mobile Payments. Nearly every day I experience a “it would be nice to be able to pay with my phone” moment. We are moving in that direction. In one example, Starbucks has released an Android app that allows customers to pay with their phone. But to me, mobile payments should become pervasive — as easy as swiping your card at the gas station. Service providers can step in providing secure ecommerce connections and taking a piece of the transaction.
- Cloud Services Store your contacts. Back up your files. Replicate data. It’s an important feature that service providers and charge a bit extra for if they do it right.
- Mobile Health Hi-performance mobile health systems have much promise for service providers because by improving network connections and reliability, service providers could demand a premium. For example, if a patient and health-care provider require a remote-monitoring health applications, service providers could step in by providing high networking reliability and quality of service.
- Enterprise Connectivity Services. The number-one headache for the corporate IT manager these days may be the bring your own device (BYOD) phenomenon. But this is where service providers can step in, providing outsourced management and security services. The number-one concern for enterprise managers is mobile security, which is a growing market. Service providers can step in and provide a more secur environment using tools such as Virtual Private Networks (VPNs), remote-monitoring, and anti-virus security features.I expect to see more and more news about this in the next two years, as service providers and app developers step up the pace of innovation to find new mobile business models. Below is a collection of news of just some recent developments over the last week or so:
- Starbucks announces new mobile payment app
- Startup adopts Qualcomm platform for remote health monitoring
- Healthcare sector to spend $69 billion on telecom
- Telefonica to launch European mobile security service
- CIOs cite cloud and mobile as spending focus