ISPs of the Skies: Where’s Their Value Add?

Making up for arguably an ambivalent consumer attitude towards mobile Internet browsing, several industry players are taking some extraordinary game-changing moves to shake the telcos from their bloody-mindedness (and self-delusion) that they are, and will remain, the gatekeepers of the mobile Internet.

Google’s Android OS blasted onto the scene in early November 2007. What’s more, the Android announcement included the establishment of the Open Handset Alliance – a federation of some heavy hitters in the handset, software, hardware and telco industries.

Then another bombshell. Nokia announces at the Mobile World Conference the formation of the Nokia Media Network (NMN). Already the network will manage the mobile real estate of brands like AccuWeather, Discovery, Reuters, Sprint, and of course, Nokia’s own M-sites.

Two sweeping changes to the mobile space, both with the intention to consolidate a fragmented service-provider environment, where a lack of compatibility is doing little to encourage value creation in terms of content development, applications and media buying.

In less than a month, the international mobile industry now has a handset manufacturer playing the role of media and marketing broker for the mobile space, while a search specialist sets the agenda in terms of an open-source operating environment for mobile devices, then stumps up US$10m as a cash incentive for would-be application developers.

At a local level, Vodafone Australia takes the uncommon step for a telco of educating agencies and advertisers about the mobile Internet, specifically on how to incorporate mobile into a marketing plan and media schedule using Vodafone’s Mobile Advertising Portfolio.

Some great collateral has been circulated, clearly detailing key points around CPM rates, response rates, top-line demographic data, dimensions, how to buy and inventories. This is a tremendously beneficial step in the simplication of mobile Internet as an advertising platform.

However, there is one interesting “pre-requisite” for businesses deciding to build their own campaign microsite, rather than outsourcing it to Vodafone. That is, all external links must be removed and “no attempt to obtain the consumer’s mobile number can be made.” The point is there remain limits to a carrier’s ‘openness’, even while new market entrants emerge and traditional players change their spots.

This is an extremely dangerous period for any proprietory supplier or network in the mobile space. Telcos can view these developments positively, realising the enormous upside for their data revenues, or they can fight tooth-and-nail to maintain some semblance of a walled garden. The proliferation of virtual mobile networks is an added complication, suggesting an almost certain content war between operators to build and retain their on-deck audiences.