Being A Dumb Pipe Isn't So Dumb
A new report from Nielsen sounds an alarmist note, suggesting wireless operators have only a brief window of time to establish themselves as more than "dumb pipes."
It seems the carriers are listening. The study was released just prior to a group of two dozen wireless operators including Verizon Wireless, Vodafone and NTT DoCoMo announced forming an alliance to create a common open platform for developing applications.
Commissioned by telecom equipment provider Tellabs, the report warns that in the next six months, "media organizations such as the BBC, application developers such as Facebook and service providers such as Google, will be viewed as the most appropriate providers [of personalized mobile services] instead of mobile carriers."
Why would it take another six months? Consumers already understand that the BBC is better at providing news, Facebook, social networking, and Google, search, via mobile than the carriers. The announcement about the study admits as much when it says, "the research shows that users now more readily identify with third-party brands such as Google than with their mobile carriers."
With good reason. Because they're better at delivering the content or services they specialize in than the carriers. But the report urges operators to create their own competing applications and services to avoid letting the Internet interlopers walk away with all the revenue-like they have on the wired Web.
Of course, catching up to the major Internet players may entail using some of Tellabs networking products, which it thoughtfully pushes at the end of the press release. Ugh. What's so terrible about being just a 'dumb pipe,' anyway? It turns out handling the surge in mobile data traffic from smartphones has proven challenging enough for carriers like AT&T.
And now with Google launching its own phone and taking a crack at being a dumb pipe itself, the carriers would best serve consumers by focusing on their main job of providing fast, reliable service.
And it's not like they aren't benefiting from the growth of the mobile Web and applications. AT&T mobile data revenue in the fourth quarter, for instance, increased 26.3% from a year ago. Verizon Wireless' increased almost 46%. At 20 cents a pop, text-messaging alone is a lucrative business for the operators.
All the more reason they should leave higher-level data services to others. Frank Barbieri, CEO of mobile video provider Transpera, earlier this month told audience members at the OnMedia NYC conference that carriers were "flamboyantly, notoriously bad" at developing operating systems and app stores. Carriers may not appreciate that assessment but at least he didn't propose a phony six-month deadline for operators to turn themselves into content producers.