The worst fear of the mobile network operator, it seems, is becoming what those in the know call a "dumb pipe". At the moment their "pipes", which are actually radio waves running from tower to tower all over the world, are far from dumb. They are, in fact, quite clever little earners bringing in billions of dollars of revenue for the mobile operators every month. But as the market becomes saturated and mobile technology becomes cheaper, these lucrative revenue streams could disappear for the operators who could look more like old-fashioned telecommunications companies that make virtually no money from their miles of copper lines.
The fear of becoming a "dumb pipe" was highlighted in a series of speeches at the Mobile World Congress in Barcelona yesterday. Telstra, Australia's largest telecoms company, plans on becoming a digital shopping mall for mobile applications, or apps, and media content, its chief technical officer Hugh Bradlow said. "We will build the shopping centre environment, which means we won't be bypassed in the value chain."
While the handset makers such as Apple, Nokia and Research In Motion (RIM) operate the top shops for mobile applications, Mr Bradlow said there was a profitable future in competing with them and taking a share of the booming market. "We only want a reasonable share of this app revenue," he said. "But it would still be big business for us, as the customer will need to have subscribed to a data plan to access the service."
More surprising was the announcement from Verizon Wireless, the largest mobile network in the US, that it would soon launch an internet calling application for its customers in partnership with Skype, the company that popularised cut-price calls over the Web. Verizon customers who download the application can make unlimited free calls to more than 580 million Skype users around the world, while also calling regular landline and mobile phones at a discount price.
Verizon said the application would boost adoption of its mobile broadband plans; it also hinted at a revenue-sharing agreement with Skype for paid calls made through the service. email@example.com