| [March 07, 2007] |
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Telcos Fail to Capitalize on Mobile Web 2.0, According to New Research by Arthur D. Little
BOSTON --(Business Wire)-- Telecoms companies are failing to make the most of the growing popularity of the online information-sharing services of "Web 2.0", according to new research 'Web re-loaded: Driving convergence in the real world.' by global consultancy Arthur D. Little.
"The key drivers of today's internet growth are the users, who through web 2.0 can now create and distribute content instantaneously and globally in a manner not previously envisaged. In order to harness and monetize Web 2.0 the Telcos will have to rapidly address the needs of this community" says Martyn Roetter, Director of Arthur D. Little's US TIME. "Younger Europeans are already showing their readiness to interact on the move, with 38% of them accessing email from mobile devices, while Google launched Gmail for mobile in November last year. Telecommunications businesses now need to offer access to the established web 2.0 services, for both communication and for the fulfillment of their wider social needs while on the move."
The challenge for the Telcos is to support these needs in the mobile environment while overcoming previous barriers such as sharing across companies and territories and high mobile data prices, walled gardens around content and exclusive proprietary formats. Telecom companies' lack of readiness to satisfy this new demand comes at the expense of future revenues and will urgently need to be addressed.
The telecoms industry is now faced with the dilemma of whether to collaborate or compete with the newly emerged yet de facto web 2.0 leaders (flickr etc) and face the long haul choice of building competing communities or taking the reduced margin implied from partnerships with existing players in exchange for more rapid access to larger communities. . Many organizations have already chosen the latter path, demonstrated by AT&T's partnership with MySpace and 3's X-series portfolio deals including Skype, Google and YouTube. A final more stable but less growth oriented option is to opt out of the fiercely competitive service centric world and focus on pure bandwidth delivery, the so-called 'bit pipe' solution.
Telecommunications organizations which play in the service oriented space will need to be wise in their choice of partners, selecting companies who can successfully grow profitably as the models develop from pure advertising into more mature, and in the long term, sustainable revenue streams.
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