Getting Smart for the New Decade

“To everything there is a season,” Proverbs tells us. Could it be that the season for wireless networks is back for a return visit? One could argue that for wireless carriers it had better be.

 

For the first 20 years wireless was all about networks; specifically, building and managing new networks for the never-before-provided application of ubiquitous mobile voice. It was an arduous task that has delivered wireless access to 95 percent of the world’s population and connected over four billion people.

 

The dominant role of that network was upended in the last half of the 21 Century’s first decade. The carriers’ network initiatives were hijacked by handset OEMs (one in particular) and apps developers. Networks that were built to connect “my customers” were flooded with traffic connecting the customers of others.

 

Then came the ultimate indignity: as the decade closed the omnipresent Google (News - Alert) unveiled its own phone, including hints that it could bypass carrier retail stores and directly offer consumers an unlocked phone. The thought of consumers using Google’s Web marketplace to get carriers to bid for their business is the ultimate end of the “my customer” era.

 

Yet at the very time when the good old days of networks seem but a quaint memory the networks are perversely becoming more important. With the proper investments and direction wireless networks could become like the BASF commercial: “We don’t make the application, we make the application better.”

 

It’s time for wireless carriers to get smart…in the network that is. The hemorrhaging decline in revenue per bit has created an unsustainable gap between network demand and revenue. It is no longer sufficient to be solely in the carriage business. By exploiting the network’s smarts wireless companies have an opportunity to recast their business and generate new revenue streams.

 

The opportunity is created by the nature of the wireless network itself. Internet Protocol has become the lingua franca of both the applications and the networks that carry them. Once information is in such a common format all kinds of things become possible, including use of the metadata it generates.

 

The FCC (News - Alert) cleared the way for carriers to use their network information several years ago. The old Consumer Proprietary Network Information restrictions now apply only to “telecommunications services” and not “information services.” The regulatory path is wide open to take advantage of how the carrier’s network knows more about its users than anyone else. Within the bounds of privacy protections that information can be harnessed to improve the consumer experience, help application providers monetize their services, and generate new carrier revenue as non-voice services continue their exponential growth.

 

But now is not the time to dither. Carrier slowness to fully exploit location information is an object lesson. Google saw the relative lack of activity and seized the initiative for itself, using the carriers’ own customers to report back (unknowingly) the topology of the network they were using. In an all-IP world unused network intelligence won’t lie fallow for long.

 

Over 1.5 million products were purchased on eBay (News - Alert) via cellphones this past holiday season – a three-fold rise over last year. For all of 2009 over half a billion dollars were spent on eBay from mobile devices (yes, that’s billion with a B). Just think how harnessing external as well as internal databases could have made the consumer experience even better and created new revenue opportunities for both eBay and the wireless carriers that provided the information.

 

If the online music service Pandora (News - Alert) can learn my listening preferences to deliver what I want to hear, imagine the carriers’ ability to combine that with other information about my usage patterns to further improve their experience.

 

If I download a bar code scanner to my phone, I am a customer of the app developer. But if the phone knows where I am and can connect that with information from others in the same shopping mall, think of the added value.

 

If demographic information is the Holy Grail of advertising, imagine the increased effectiveness that would result from knowing on a non-personally identifiable basis who I am and where I am.     

 

Such network-based information is a value-adding asset that will leverage carriers into the application revenue stream and away from the dumb pipe. Consumer privacy, of course, is paramount. But personally-identifiable information isn’t necessary for this to be a successful carrier service.

 

What after all is the scope of Google’s vast wealth and power anyway? It is their knowledge of the online user’s desires and patterns. They aren’t the only folks with such insights, however. Especially in the mobile world smart network opportunities await – but as Google showed with location information, the opportunities won’t wait forever.

 

The smart network never really went away; it just traveled to the edge where it was taken advantage of by others. Recapturing those smarts and putting them to work could help application developers deliver a better product; in return for which the app developer should be willing to part with a small fee to pay for the carrier’s smarts.

 

When this happens – Bingo, the dumb pipe is dead!