Monday, April 10, 2006

Internet giants threaten mobile operators

ZDNet India reports that "mobile telephony companies need to adapt their business models to compete with major Internet players," since "companies such as Google and Yahoo pose a risk to mobile operators."

If the network operators don't watch out, they just might turn out as only the wireless pipes, while others benefit. According to Martin Gutberlet at Gartner the "Internet companies are much better then mobile operators at creating communities." He said, "Disruptive players offer more. They create a community, the community becomes robust, then they start to charge. Mobile operators skip straight to the final stage, and then wonder why the community is not there."

Gutberlet added, "Why should consumers go to operators for Internet services if they are already provided? I can have a Google Mail service on my mobile phone, so why should I go for an operator-offered service?"

Dean Bubley at Disruptive Analysis agreed that "Internet companies pose a serious threat to mobile operators." He said, "Mobile operators like to think they own the customer. This might be true at the moment for voice telephony, but for interactive services they are very far behind. The consumer interactive experience is owned by the Internet, mostly because of the provision of useful functionality. Internet companies start offering something useful for free to begin with, then charge for other services later."

Internet telephony might be an even greater threat, warned Gutberlet. He said, "Let's look at voice. If I could run Skype on mobile phones, that would be very disruptive. We're not there yet, but could be in a few years. It depends how quickly the Internet guys push and these guys are so quick at launching network-agnostic services."