The central role of operators in the mobile content and services value chain has been a given since the start. Initially, their biggest asset was distribution. Their access to millions – even hundreds of millions of consumers — allowed them to call the shots and dictate the terms to providers and companies lining up to offer their content via operator portals. However, the advance of smartphones changes all the rules.
Mobile operators are now struggling to find their place in a value chain that is stacked in favor of the handset makers and OEMs that run the app stores. Sure, mobile operators can launch a competing app store. But the chances of success are limited. (In fact, we have yet to see a carrier leave its mark on the app landscape.)
So if distribution isn’t going to be operators key leverage point going forward, what is?
Operator assets
The answer becomes obvious when we examine Google’s strategy. The Internet giant recently admitted that it isn’t satisfied with the number of paid app purchases via the Android Marketplace. The solution: increased resolve to pursue carrier billing relationships (similar to the ones already in place with T-Mobile & AT&T).
Nokia knows this already. It recently reports that efforts to bring carrier billing to its own Ovi store have been paying off big for developers. In fact, Nokia claims that carrier billing has increased Ovi store application sales by more than ten times (!)
Connect the dots, and it’s clear that mobile operators have a hugely important role to play in this new app value chain provided they adjust their strategies.
Command and control
Rather than compete head-on with app store players (and make huge investments to build in-house app stores, for example), mobile operators should focus cultivating the assets that add real value to the equation. This means enabling payment (direct billing) and providing app merchants/developers with anonymized customer data.
In short: mobile operators have to focus on what they really control.
Read the rest of my post over at the Amdocs Interactive blog.
Matt Anderson is Head of product marketing for Amdocs Interactive, a distinct business within Amdocs focused on Value Added Services, which is the world’s leading provider of digital commerce, Mobile Internet and personalization solutions. Matt has over 13 years experience bringing products to market in the telecommunications industry. Prior to joining Amdocs in 2008, he directed marketing for Nuance’s mobile business unit, focused on market development of speech activation applications in the mobile, navigation and automotive industries. Previously he launched the next generation of T9 at AOL Wireless and was responsible for managing mobile VAS offers at AT&T. Matt also founded a start-up in the telematics business and managed marketing and sales for one of the first wireless data networking companies. Matt has an MBA from the University of Washington. You can follow Matt on Twitter (@matt6156).
Disclaimer: Amdocs Interactive is an MSG client and supporter.