Skip to main content

Mobile Providers Can't Identify with Customers

The mobile communications industry's frenzied efforts to reinvent itself as a mobile entertainment business will continue at the CTIA show next week. This is despite the fact that the vast majority of revenue growth -- both for the operators and vendors -- is coming out of developing markets where mobile is fulfilling a basic need for communications.

In the mature markets of Europe, North America and Asia the search continues for the new mobile applications and revenue streams that will compensate for the stagnating voice business. Nevertheless, according to Informa, the U.S. is forecast to post the fourth highest number of net additions in 2007 behind India, China and Pakistan. But, growth won't likely come from new applications adoption, instead it will result from the continued disconnect of landlines.

"We forecast 480.5 million global net adds this year, with almost 21 million new users coming from the U.S., equivalent to 4.3 percent of the global total," says Gavin Patterson, Principal Analyst at Informa Telecoms & Media.

Mobile television was one of main topics at CTIA in 2006, but this year visitors will be expecting to see fully operational trials and compelling content. "Verizon Wireless recent introduction of its VCAST Mobile TV service, using Qualcomm's MediaFLO USA network, in 20 U.S. markets marks the beginning of the age of standalone mobile TV networks that provide multimedia content which the cellular networks are ill-suited to deliver," says Tammy Parker, principal analyst with Informa.

"This entry into the mobile TV business will provide numerous lessons not only for Verizon and Qualcomm but also others dabbling in this nascent industry," says Parker "With Aloha Partners and Modeo currently working on DVB-H networks in the U.S. as well, mobile TV will be a dominant theme at this year's CTIA event."

Another dominant issue will concern the role of WiMAX in future mobile networks. "It would not be accurate to call 2007 the year of mobile WiMAX, but it's clear that the future of this technology in the United States will be built upon the foundation being created this year," says Parker.

Mobile advertising is a concept that has been thrown around the mobile industry for a number of years but which finally appears to be gaining some traction. Informa forecasts that the mobile advertising market will be worth $11.3 billion by 2011. "The sooner the mobile industry understands this emerging business model and its role within the advertising ecosystem, the sooner it can tap into that additional revenue stream," says Nick Lane, principal analyst at Informa.

"Operators have to generate user profiling that can be highly-targeted for the brands, and truly personalized for the consumer. Until this happens, mobile advertising will remain largely experimental."

As the mobile phone morphs into a device that can capture both TV and Internet content, interest is starting to grow in the user-generated content and social networking space. In January, UK magazine publisher Emap acquired YoSpace, owner of the SeeMe TV service which has successfully taken the user-generated content concept into the domain of mobile communications and devices.

Many of the new devices unveiled at CTIA Wireless this year will incorporate new, high-speed, mobile broadband technologies -- HSDPA and CDMA2000 1xEV-DO. Informa believes that mobile service providers are hoping that high-speed mobile broadband will bring to life some of the services that are already available over 3G.

I believe that promoting high-speed access and an abundance of features won't stimulate demand. Clearly, given the past results of using that approach, it isn't the answer to market stagnation. Instead, it's time for service providers to invest the time and effort to learn the definitive needs of apparent customer segments. Uninformed market segmentation has driven provider marketing messages targeted at only two groups -- the youth segment and the business segment.

The rest of the marketing efforts typically apply legacy mass-market thinking, yet they don't address the known consumer common needs. As an example, research has identified the device and service usability issue as a major roadblock to mainstream user adoption. Regardless, service providers have done little to resolve this problem thus far.

Instead, they typically promote irrelevant service enhancements that ironically often add to the user complexity challenge. Therefore, nothing will likely change until service providers recognize the true diversity of their addressable markets, and customize offers accordingly. The root cause of the stagnation is perhaps more obvious to customer advocates.

Most mobile phone service providers can't fully identify with their customers. The evidence is undeniable. The upside opportunity to tailor the user experience, however, is still a very significant incentive.

Popular posts from this blog

Trillion-Dollar Smart Power Grid Transformation

The global energy landscape is undergoing a significant transformation. Renewable energy sources like solar and wind are rapidly gaining ground as we transition towards net-zero emissions. However, this transition hinges on a crucial but often overlooked factor: the modernization and expansion of our aging power grids across the globe. For decades the backbone of our electricity delivery system has been largely static. The influx of variable renewable energy sources like solar and wind presents a new challenge. Smart Power Grid Market Development Integrating these resources effectively requires a Smarter, more Responsive grid that can handle fluctuating power generation and efficiently distribute it across vast distances. This is where a new trillion-dollar energy market growth opportunity emerges. According to a recent worldwide market study by ABI Research, global investments in public grid digitalization and transmission network expansion must exceed $4 trillion by 2030 to meet our