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BLOG: Tackling telco troubles

Michael Yin | Sept. 20, 2011
Addressing the needs of telco operators could make things better for everyone.

It seems like what everyone talks about today is mobile - the speculation around the new version of Apple's iPhone, the failure (or surprise success) of HP's TouchPad, RIM's woes over its ageing Blackberry platform, who knows what will come of the Google/Motorola partnership and the Asian fascination with mobile phones that has resulted in the highest mobile subscription rates in the world.

The number of mobile phone subscribers is growing daily. There are about 5.3 billion mobile subscribers in the world (around 77 per cent of the world's population), according to estimates. The rate of mobile adoption is led by China and India at the moment: by 2014, China will have 1.31 billion subscribers, while India will have 853 million. The rest of Asia should follow suit: the mobile phone is the main (and for some, only) channel of communication, information and entertainment.

However, there is one part of the mobile ecosystem that rarely gets a mention in these conversations, and that is the telecommunications operators (telcos). Telcos all over the world face immense pressure to build infrastructure, roll out more services, and do whatever is necessary to meet the unprecedented demand for mobile communications and services.

Mobile data is in demand because it is the key to rich media experiences delivered over the mobile channel, as well as enhanced services such as mobile payments, location-aware services, and augmented reality systems. Consumers are becoming more demanding of their telcos, expecting to pay low prices for high-speed broadband connections that can provide them with high-quality streaming video and other rich content, while maintaining a constant connection to the Internet for social networks and other online activity.

Much of this online activity is done through downloadable apps or from the mobile Internet, this content is effectively platform-agnostic. This, in turn, commoditises telco services - it does not matter which telco provides the service, because the experience is the same. Commoditisation allows for more competition, because it levels the playing field, so now the only competition is around price. The end result: telcos find themselves at the mercy of customers, forced to develop better and better infrastructure in order to offer the best online experience, while having to offer services at low, low prices at the risk of losing customers to a competitor with a better deal.

The solution may be for telcos to offer their own content, in order to be able to offer value-added services to their customers, and as a way to retain customers from switching to other telcos. As social networks are a key attraction for mobile consumers, it makes sense for telcos to integrate social network use into their existing service offerings.


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