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How Walled Gardens Can Limit Mobile Growth

The message from U.S. mobile phone service subscribers to their network operators is clear -- stay on the same course and value-added service (VAS) adoption will be minimal.

Some 35 percent of respondents to an In-Stat consumer survey of primarily North American users still only use voice services from their mobile providers, reports In-Stat.

This presents a huge opportunity for the entire mobile service industry to get these consumers to partake of some mobile data and entertainment offerings, the high-tech market research firm says. That said, VAS growth tends to remain elusive.

"There is a potential dark cloud on the horizon for the cellular operators, however, as unlimited Internet access packages may disrupt today's enhanced service offerings, which are currently very tightly coupled to what a particular service provider wishes to offer," says Gerry Kaufhold, In-Stat analyst.

I believe that the mounting evidence that identifies closed "walled garden" business models as the primary growth inhibitor is undeniable. Granted, high-priced offerings have also significantly contributed to ensure that wireless VAS subscription is still an early-adopter phenomenon in the U.S. market.

In-Stat's market study found the following:

- Nearly 50 percent of respondents would use the Internet from an unlimited data package in place of other rich media services given the right pricing.

- Too many models of handsets confuse users and fragment the market for services.

- People up to 45 years of age will become surprise drivers for future growth of enhanced services, given the opportunity.

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