February 14th, 2008Globe in Barcelona on the fight for/against Dumb Pipes
The Globe and Mail has an excellent wire story today on Carrier’s struggles to maintain and grow their roll in the value chain of mobile content. The value proposition of content and services delivered by mobile is spreading faster in some cases than the business models available to capture it.
Carriers fight not to become ‘dumb pipes’:
…Bit by bit, carriers are losing control….
Vodafone Chief Executive Arun Sarin said carriers should not sit back and allow themselves to be reduced to mere transporters of data, “dumb pipes” in the industry jargon.
“Customers want social networking, e-mail, SMS, instant messaging, voice — you name it,” Sarin said in a keynote address to the Mobile World Congress. “Communication is our core business. We have to be in all of these spaces.”
The strategy the Canadian carriers thus far have followed is to hold back the tide as long as possible, thereby capturing larger piece of a smaller pie (through lockins, long contracts and punitively high data rates on 3rd party applications for example). And it’s a successful strategy while it lasts, until one or more carriers start to break ranks, or regulators finally step in to open up the market (as we’re seeing with the current spectrum auction).
The alternate strategy for carriers of course is to bet on an open strategy and thereby make capture what is likely a smaller share of an ultimately larger pie. There is a ton of value that carriers can still offer in an open networked world to capitalize on their core assets, customer relationship, brand strength, customer data, location services etc. etc.
