Service Discovery and Mobile Network Operators

In a recent article: Mobile Marketing Magazine: If The Clip Fits... Liora Bram provides a great interview and explanation of how the mobile network operators could potentially benefit from the access they have to their subscribers. Liora promotes the idea that operators have a great deal of access to the previous activity of their subscribers and could use that data - CRM style - to better understand what they should promote for future services.

However...

Time and time again mobile network operators have proven that they do one thing really well - run a network - but not market services. If we're talking about voice or data then the mobile network operators know exactly how to do that. Unfortunately, this space has become near commodity in nature and as such the only way they know how to compete is on price.

Content is the key

For multiple quarters mobile network operators have been trying to figure out how to market content to these subscribers. Liora points out that, "Operators are sitting on a potential content goldmine." - but the consumer is largely unaware. How do you get the message out. Maureen Scott from Openwave will constantly jump in with one of her favorite mantras - "It's all about service discovery." and I couldn't agree more.

Too many options to promote them all

If you include both on-portal and off-portal content there are literally thousands of different offerings in this content goldmine. Some have a broad base of appeal and others are very niche specific. What is problematic is to know which ones to promote and how. And as this is a difficult question, the operators choose not to promote any specific service but instead to promote their platform.

Vodafone promotes Vodafone Live! and spent £100M in the launch alone. But what if they would have spent £1M on 100 different services that all run on Vodafone Live! ? Wouldn't that have given a better result?

As much as operators would like to disagree, practical observation shows that consumers don't do well when trying to discover services from a standard WAP Portal. If what they want is not available within the first few clicks - they aren't likely to bother. And that means that only a few products and services are ever made known to the consumer.

But there is an even better idea...

Ok - so operators don't want to spend money on services that may not go anywhere - they only want to back winning horses. What about another strategy? What about giving more of the revenue back to the individual content owners and letting them spend the extra money promoting their content. Each content owner knows and understands their consumers at a depth that far exceeds any understanding that the operator can hope to acheive - at least initially. Most content owners are already promoting their services through traditional media. Let's give the content owners more of the profits and let them promote their services.

(If this sounds familiar - think NTT Docomo and imode... Imode is as much about empowering the content owners as it is about the underpinning technology.)

But then we are just a pipe!

Newsflash! - Mobile network operators are a pipe FIRST. Ask anyone in the boardroom where they are putting their energy and their investment and it is ensuring that nothing detracts from their voice and data revenues. Yes - they pay lip service to transforming themselves into "content" companies - but only Hutchison 3G has managed to pull that off.

With the exception of 3, mobile network operators have demonstrated and proven beyond reasonable doubt that they are incapable of developing a strategy that truly focuses on promoting and delivering content. ( I'd love to have to eat my words in a few quarters - but I'm not too worried right now...)

Leave service discovery to the people that understand the content and services being offered. Successful content owners will grow and the duds will fade away through a completely organic process. Mobile network operators will benefit from increased data traffic and increased revenue share through higher volumes of transactions at lower percent from each transaction. Btw - in case anyone is wondering - I believe that 15%-20% should be the maximum operator take. That's 10-15%% for the transit and 5% for the transaction clearing through the operators billing relationship with the consumer. The rest of the money should go to the content owners so they can promote their services. Today in premium SMS the rates can go as high as 55% and are seldom less than 30% for the highestariffif and volume combinations. No wonder the content guys are struggling!

One final note on Hutchison 3G

I'd be remiss if I didn't take a minute to talk about why 3 is an exception to the premise that mobile network operators are lousy at marketing content. 3 has done an exceptional job. And it has happened because they started off with the idea of being a content company first - and a voice/data company second.

When you walk into a 3 shop you don't get presented with several 100 different devices to chose from, you presented with a wide range of content and services to chose from. The sales team is focused on presenting, educating and selling the consumer content and services first. The device and the voice plan are secondary.

Admittedly this approach isn't the best for the price conscious consumer who is looking for a glove-box phone solution - but you know - those customers are probably better off going with an operator that understands voice and data and how to milk revenue out of even the smallest voice and SMS service user - like a traditional network operator.