Comments on: Business Models in the Wireless Industry http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/ Telecom Circle analyses the latest trends and services within the Wireless and Internet space. Fri, 30 Jul 2010 07:03:03 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Neeraj Gupta http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-571 Neeraj Gupta Fri, 29 May 2009 13:32:53 +0000 http://www.telecomcircle.com/?p=313#comment-571 Nice article, Mohit. Do you have similar one related to VAS industry? Also what are the top applications (Mobile VAS) to concentrate? Cheers Neeraj Nice article, Mohit.

Do you have similar one related to VAS industry? Also what are the top applications (Mobile VAS) to concentrate?

Cheers
Neeraj

]]> By: Gerhard Fasol http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-177 Gerhard Fasol Wed, 18 Mar 2009 14:02:05 +0000 http://www.telecomcircle.com/?p=313#comment-177 Mohit- Nice article - its one way to look at the telecom world. We worked intensively with investment funds on understanding the telecom sector from an investment perspective and developed some alternative views from the investor perspective which is a different angle than your angle a NOKIA.- Another important point is that your article does not correctly explain the business model which Japanese operators have developed. You mention DoCoMo, but the Japanese mobile landscape is not only DoCoMo, but a very ferociously competitive market player with a large number of players - DoCoMo is the largest player - but by far not the only one. Your explanation of i-Mode and DoCoMo's mobile data services as a walled garden where DoCoMo takes a huge 50%-60% revenue share is misleading if not wrong. Japan's telecom and mobile sector is VERY difficult to understand - so difficult that Vodafone failed in Japan, and NOKIA only achieved 0.3% market share before ending handset sales (except for VERTU). i-Mode and DoCoMo's business model is different than what you represent above - regarding i-Mode you need to understand Japanese language and use i-Mode yourself + all the 10,000s of off-portal non-Wallet-Garden mobile businesses in order to appreciate. Without knowing Japanese language this is not possible in depth. We have an i-Mode FAQ here where you can find explanations of i-Mode: http://www.eurotechnology.com/market_reports/imode/faq.shtml Gerhard Fasol http://www.eurotechnology.com/ Mohit-

Nice article – its one way to look at the telecom world. We worked intensively with investment funds on understanding the telecom sector from an investment perspective and developed some alternative views from the investor perspective which is a different angle than your angle a NOKIA.-

Another important point is that your article does not correctly explain the business model which Japanese operators have developed. You mention DoCoMo, but the Japanese mobile landscape is not only DoCoMo, but a very ferociously competitive market player with a large number of players – DoCoMo is the largest player – but by far not the only one.

Your explanation of i-Mode and DoCoMo’s mobile data services as a walled garden where DoCoMo takes a huge 50%-60% revenue share is misleading if not wrong.

Japan’s telecom and mobile sector is VERY difficult to understand – so difficult that Vodafone failed in Japan, and NOKIA only achieved 0.3% market share before ending handset sales (except for VERTU).

i-Mode and DoCoMo’s business model is different than what you represent above – regarding i-Mode you need to understand Japanese language and use i-Mode yourself + all the 10,000s of off-portal non-Wallet-Garden mobile businesses in order to appreciate. Without knowing Japanese language this is not possible in depth. We have an i-Mode FAQ here where you can find explanations of i-Mode:
http://www.eurotechnology.com/market_reports/imode/faq.shtml

Gerhard Fasol
http://www.eurotechnology.com/

]]> By: Niall Halpenny http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-111 Niall Halpenny Mon, 09 Mar 2009 11:32:52 +0000 http://www.telecomcircle.com/?p=313#comment-111 Hi Mohit, From what I'm seeing on the ground, the value added real convergence model isn't described. Here the telco partners with players wishing to utilise the underlying network resources, such as identity, presence and even high-street shops as part of their retail delivery and device management. Some of the embryonic examples I would point to would be the sale of "netbooks" with inbuilt HSPA connections. It is easy to see how this model could easily evolve to where the operator partners with services providers and applicaiton developers in a partner/revenue share model. This model utilises a more symbiotic than dominant philosophy. Regards, Niall Niall Halpenny CEO DANÚ Technologies www.danutech.com http://www.linkedin.com/pub/0/392/121 Hi Mohit,

From what I’m seeing on the ground, the value added real convergence model isn’t described. Here the telco partners with players wishing to utilise the underlying network resources, such as identity, presence and even high-street shops as part of their retail delivery and device management.

Some of the embryonic examples I would point to would be the sale of “netbooks” with inbuilt HSPA connections. It is easy to see how this model could easily evolve to where the operator partners with services providers and applicaiton developers in a partner/revenue share model.

This model utilises a more symbiotic than dominant philosophy.

Regards,

Niall

Niall Halpenny

CEO DANÚ Technologies
http://www.danutech.com

http://www.linkedin.com/pub/0/392/121

]]> By: Jalal Aslam http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-106 Jalal Aslam Sun, 08 Mar 2009 20:48:58 +0000 http://www.telecomcircle.com/?p=313#comment-106 Mr Agrawal, you have brought the issue to the forefront. Very nice article. I think,Mr Yahya is very near to the correct answer. But I would also define it based on another vital factor: demographics & especially by numbers. One such factor is also the future of our transport systems in metropolices: Like I have travelled in over-crowded buses/railways in Karachi and China;In case of traffic jams or as we have seen worst holiday-driven chaos in china in 2008, the time and the mode of our transport is also important. As sugested there r also QoS issues associated with mobility. Still companies would invest in areas or a specific model which has statistics to back it up.The push shall be towards a greater number of people choosing which model? About the application driven point i would suggest that the world is moving towards a share-ware model, where u know with Java or a java-like interface b/w different platform or for that matter an application that can interact with another application and with NGN--I think would become less relevant. Huba:We still have to keep, the physical-layer/air-interface in mind , b/c if u r mobile chances r u have very little limited BW, still the dominant factors are tothe numbers of users using a particular set of choices in a particular region, as pointed by PaulSingh. Mr Agrawal, you have brought the issue to the forefront. Very nice article.

I think,Mr Yahya is very near to the correct answer.
But I would also define it based on another vital factor: demographics & especially by numbers.

One such factor is also the future of our transport systems in metropolices:
Like I have travelled in over-crowded buses/railways in Karachi and China;In case of traffic jams or as we have seen worst holiday-driven chaos in china in 2008, the time and the mode of our transport is also important.
As sugested there r also QoS issues associated with mobility.
Still companies would invest in areas or a specific model which has statistics to back it up.The push shall be towards a greater number of people choosing which model?

About the application driven point i would suggest that the world is moving towards a share-ware model, where u know with Java or a java-like interface b/w different platform or for that matter an application that can interact with another application and with NGN–I think would become less relevant.

Huba:We still have to keep, the physical-layer/air-interface in mind , b/c if u r mobile chances r u have very little limited BW, still the dominant factors are tothe numbers of users using a particular set of choices in a particular region, as pointed by PaulSingh.

]]> By: Ron Victor http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-89 Ron Victor Thu, 05 Mar 2009 23:22:21 +0000 http://www.telecomcircle.com/?p=313#comment-89 There will be a hybrid co-existance of the application and carrier dominance models. Yes, Huba is right - the masses do want the application dominance model, however the carrier won't cave in so easily and neither is it in the best interest of the app developer to want the entire pie alone - example - when a user subscribes to verizon dsl - they have a choice of Yahoo or MSN as the portal of choice - guess what both Yahoo and MSN get a piece of the action per sub per month. Similarly, while I understand apps such as social apps - linkedIn, Facebook et.al are too big to care if the carrier will or will not carry them, they'll be used a lot more if there's one less click for a user to go from the browser v/s the app being availble through 1-click right off the phone UI - if that has to happen, the carrier will want some piece of the pie. Thus, once again we are back to screen real-estate - however a smaller hopefully virtual 3-d screen and the operator will sell that real-estate to the highest bidder - it could actually be an automated service like ebay - where app developers bid with min and max bids for their respective apps to be on the main screen - users ofcourse have the option to change that - again if a user decides to put a particular app on the main screen - a small pice of the pie goes to the operator. Finally, apps that require QoS - i.e. streaming video, conf calls, voip calling - all these will be much better off if they work in sync with the operator rather than try and do it without them - example: hulu with a better QoS if teh user subcribes to a 10Mbit pipe v/s a 1Mbit pipe for the pc - various hybrid models can be created in the mobile space that will be very beneficial to both the pipe owner and the content owner. Yes, content is still king - but only if it is made available to all easily. There will be a hybrid co-existance of the application and carrier dominance models. Yes, Huba is right – the masses do want the application dominance model, however the carrier won’t cave in so easily and neither is it in the best interest of the app developer to want the entire pie alone – example – when a user subscribes to verizon dsl – they have a choice of Yahoo or MSN as the portal of choice – guess what both Yahoo and MSN get a piece of the action per sub per month. Similarly, while I understand apps such as social apps – linkedIn, Facebook et.al are too big to care if the carrier will or will not carry them, they’ll be used a lot more if there’s one less click for a user to go from the browser v/s the app being availble through 1-click right off the phone UI – if that has to happen, the carrier will want some piece of the pie. Thus, once again we are back to screen real-estate – however a smaller hopefully virtual 3-d screen and the operator will sell that real-estate to the highest bidder – it could actually be an automated service like ebay – where app developers bid with min and max bids for their respective apps to be on the main screen – users ofcourse have the option to change that – again if a user decides to put a particular app on the main screen – a small pice of the pie goes to the operator. Finally, apps that require QoS – i.e. streaming video, conf calls, voip calling – all these will be much better off if they work in sync with the operator rather than try and do it without them – example: hulu with a better QoS if teh user subcribes to a 10Mbit pipe v/s a 1Mbit pipe for the pc – various hybrid models can be created in the mobile space that will be very beneficial to both the pipe owner and the content owner. Yes, content is still king – but only if it is made available to all easily.

]]> By: vijay http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-87 vijay Thu, 05 Mar 2009 20:06:56 +0000 http://www.telecomcircle.com/?p=313#comment-87 Hi Mohit, Kudos for an informative article. Carrier & device dominant models are yet to staurate the market and are still in a growth swing (both China & India are shining examples). Once done ie. after reaching out to the farthest customer, content/application model will rise to meet the consumer needs both for the large global cross section of population and for the small village needs with carriers and devices taking up roles of enablers in the background as rightly pointed out by Tom exemplifying DoCoMo. But this stage looks afar as yet but approaching fast - eh! regards vijay Hi Mohit,

Kudos for an informative article.

Carrier & device dominant models are yet to staurate the market and are still in a growth swing (both China & India are shining examples). Once done ie. after reaching out to the farthest customer, content/application model will rise to meet the consumer needs both for the large global cross section of population and for the small village needs with carriers and devices taking up roles of enablers in the background as rightly pointed out by Tom exemplifying DoCoMo. But this stage looks afar as yet but approaching fast – eh!

regards

vijay

]]> By: Praveen Shetty http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-81 Praveen Shetty Thu, 05 Mar 2009 08:13:24 +0000 http://www.telecomcircle.com/?p=313#comment-81 The ttle of the article could be stakeholder analysis in wireless industry, but of course business models sounds more interesting :) nevertheless, great article, with the convergence of Web and Mobile, it will be interesting to see how the application providers are able to disrupt the dominance of device/platform providers. I am assuming the carriers will be the least significant in the whole value chain in times to come. The ttle of the article could be stakeholder analysis in wireless industry, but of course business models sounds more interesting :)
nevertheless, great article, with the convergence of Web and Mobile, it will be interesting to see how the application providers are able to disrupt the dominance of device/platform providers. I am assuming the carriers will be the least significant in the whole value chain in times to come.

]]> By: Huba Rostonics http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-79 Huba Rostonics Wed, 04 Mar 2009 19:01:36 +0000 http://www.telecomcircle.com/?p=313#comment-79 Good article Mohit! Glad to see that Nokia is still looking with clarity! The Application Dominance Model is definitely what users will be looking for. This model reached popularity in the web space as this psace is totally market (or user) controlled. The web has been particularly fast in becoming device (PC-Mac), platform (Firefox/Explorer/Safari) and operator (Compuserve/AOL) agnostic. And when that happened first those that have not adopted this model where weeded out and then the best applications survived. This is what the public wants and proof of it are those applications that work accros these patches (first voice, SMS and now, twitter). It is just a matter of having enough bandwidth on the device so that hosted applications run as fast as device or platform specific clients. http://hubarostonics.blogspot.com Good article Mohit! Glad to see that Nokia is still looking with clarity!

The Application Dominance Model is definitely what users will be looking for. This model reached popularity in the web space as this psace is totally market (or user) controlled. The web has been particularly fast in becoming device (PC-Mac), platform (Firefox/Explorer/Safari) and operator (Compuserve/AOL) agnostic. And when that happened first those that have not adopted this model where weeded out and then the best applications survived.

This is what the public wants and proof of it are those applications that work accros these patches (first voice, SMS and now, twitter). It is just a matter of having enough bandwidth on the device so that hosted applications run as fast as device or platform specific clients.

http://hubarostonics.blogspot.com

]]> By: Constantin http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-76 Constantin Wed, 04 Mar 2009 17:06:51 +0000 http://www.telecomcircle.com/?p=313#comment-76 Public notifications in the last couple of years seem to hint toward a device dominance model for the next decade. However the device I am picturing is a very morphed smart phone ( and "phone", too, is a legacy word I am using for a lack of better word). RIM (off-spring from service) introduced their device in 1999 (see http://press.rim.com/release.jsp?id=687 ) for mobile e-mail and it morphed in a smart phone. Almost 7 year later the others cought the lead: Nokia (off-spring from handsets) announced the computer-mobile-smart-phone see http://www.nokia.com/A4136002?newsid=1077775 . Later on Apple (off-spring from computer mfg house) introduces their device in 2008,( see http://www.apple.com/pr/library/2008/07/14iphone.html ) and it calls it phone. I am not sure the next device that handles voice will also be called phone. What do you think about this one from Virgin?: http://virginmobileusa.marketwire.com/easyir/pkit.do?easyirid=13135DE328B72AB2 Without giving references, big splashes in growth were made by genuine device dominance model applied where carriers benefitted sideways. Platform dominance doesn't count yet. My two cents. Public notifications in the last couple of years seem to hint toward a device dominance model for the next decade. However the device I am picturing is a very morphed smart phone ( and “phone”, too, is a legacy word I am using for a lack of better word).

RIM (off-spring from service) introduced their device in 1999 (see http://press.rim.com/release.jsp?id=687 ) for mobile e-mail and it morphed in a smart phone. Almost 7 year later the others cought the lead: Nokia (off-spring from handsets) announced the computer-mobile-smart-phone see http://www.nokia.com/A4136002?newsid=1077775 . Later on Apple (off-spring from computer mfg house) introduces their device in 2008,( see http://www.apple.com/pr/library/2008/07/14iphone.html ) and it calls it phone. I am not sure the next device that handles voice will also be called phone. What do you think about this one from Virgin?: http://virginmobileusa.marketwire.com/easyir/pkit.do?easyirid=13135DE328B72AB2

Without giving references, big splashes in growth were made by genuine device dominance model applied where carriers benefitted sideways. Platform dominance doesn’t count yet.

My two cents.

]]> By: Pandith JP http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-74 Pandith JP Wed, 04 Mar 2009 12:21:10 +0000 http://www.telecomcircle.com/?p=313#comment-74 Any model that is flexible enough to meet the needs of the mobile user will win! If a carrier is able to offer every conceivable service or information that a user needs, at a reasonable price, it will be a winning model. If a device vendor can provide location based services to a mobile user for free, based on advertising revenue, the model is a winner. Mobile users will continue to demand value, services at a reasonable price (price tending to zero ;)) Any model that is flexible enough to meet the needs of the mobile user will win! If a carrier is able to offer every conceivable service or information that a user needs, at a reasonable price, it will be a winning model. If a device vendor can provide location based services to a mobile user for free, based on advertising revenue, the model is a winner. Mobile users will continue to demand value, services at a reasonable price (price tending to zero ;) )

]]> By: Michel Mars http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-73 Michel Mars Wed, 04 Mar 2009 11:40:19 +0000 http://www.telecomcircle.com/?p=313#comment-73 for personalFor personal use the Device Dominance Model. At this time all smartphones have the same functions. Marketing will be a key element with this model. At the workplace I think the Application Dominance Model. Take a good look at your processes and the infra. Talk with the users. Then decide which device is the best for your users and processes. for personalFor personal use the Device Dominance Model. At this time all smartphones have the same functions. Marketing will be a key element with this model.
At the workplace I think the Application Dominance Model. Take a good look at your processes and the infra. Talk with the users. Then decide which device is the best for your users and processes.

]]> By: Chandan Seernani http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-72 Chandan Seernani Tue, 03 Mar 2009 21:40:42 +0000 http://www.telecomcircle.com/?p=313#comment-72 There are primarily 3 components here i.e. the bandwidth, the devices and the application/platform/content. The good news for the carriers is that they have a lock on the bandwidth because of high cost of entry and other factors. Ironically its the very thing that pigeon holes the carriers as "pipe providers" (borrowing from an old adage). The carriers are however taking advantage of this position to boost their ARPU by providing a variety of pricing plans for Mobile Data. Lets now talk about devices. This field is highly competitive and device providers such as Nokia, Apple, RIM etc are always in quest for producing the next "toy". The biggest challange for the Device Providers is to pick the right horse to ride as far as the application/platform/content is concerned. Some ride a single horse (eg: Apple and RIM) while others ride multiple horses (eg: Nokia). Revenue share opportunities, if any exist ,will be between the Device providers and the providers of application/platform/content. I see a greater revenue share opportunity between the providers of application, platform and content. Case in point the revenue share offered by Apple to its developers. In this case, while Apple is a Device provider, its also the provider of the Platform. The revenue share is between Apple (the platform provider) and the application providers. There are primarily 3 components here i.e. the bandwidth, the devices and the application/platform/content. The good news for the carriers is that they have a lock on the bandwidth because of high cost of entry and other factors. Ironically its the very thing that pigeon holes the carriers as “pipe providers” (borrowing from an old adage). The carriers are however taking advantage of this position to boost their ARPU by providing a variety of pricing plans for Mobile Data.

Lets now talk about devices. This field is highly competitive and device providers such as Nokia, Apple, RIM etc are always in quest for producing the next “toy”. The biggest challange for the Device Providers is to pick the right horse to ride as far as the application/platform/content is concerned. Some ride a single horse (eg: Apple and RIM) while others ride multiple horses (eg: Nokia). Revenue share opportunities, if any exist ,will be between the Device providers and the providers of application/platform/content.

I see a greater revenue share opportunity between the providers of application, platform and content. Case in point the revenue share offered by Apple to its developers. In this case, while Apple is a Device provider, its also the provider of the Platform. The revenue share is between Apple (the platform provider) and the application providers.

]]> By: Liz Blake http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-71 Liz Blake Tue, 03 Mar 2009 20:58:25 +0000 http://www.telecomcircle.com/?p=313#comment-71 Mohit I also found your synopsis of the models interesting. I also agree with Alan that we will see a hybrid, similar to what has appeared in the wireless industry today. I also think that the market segment may drive different variations. The adoption of the IPhone or Instinct by the Consumer to meet the social networking demands versus the Blackberry, Treo or to a lesser extent Motorola by Business for Corporate work productivity/work flow management tools are a couple of examples. Mohit
I also found your synopsis of the models interesting. I also agree with Alan that we will see a hybrid, similar to what has appeared in the wireless industry today. I also think that the market segment may drive different variations. The adoption of the IPhone or Instinct by the Consumer to meet the social networking demands versus the Blackberry, Treo or to a lesser extent Motorola by Business for Corporate work productivity/work flow management tools are a couple of examples.

]]> By: R. Paul Singh http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-70 R. Paul Singh Tue, 03 Mar 2009 20:32:35 +0000 http://www.telecomcircle.com/?p=313#comment-70 You have created a great overview article. However, every geography will have different models that will win. I addressed this issue in my blog at http://mobilepov.wordpress.com/ R. Paul Singh You have created a great overview article. However, every geography will have different models that will win. I addressed this issue in my blog at http://mobilepov.wordpress.com/

R. Paul Singh

]]> By: Jacques Monchamp http://www.telecomcircle.com/2009/03/business-models-in-the-wireless-industry/comment-page-1/#comment-69 Jacques Monchamp Tue, 03 Mar 2009 20:08:48 +0000 http://www.telecomcircle.com/?p=313#comment-69 In my view the part of the world you are in might adopt a different model. I would see the handset manufacturers be given a preference, if they deploy applications rich devices with ease of use and with most of all hi-res screens then they will dictate the way. In my view the part of the world you are in might adopt a different model.

I would see the handset manufacturers be given a preference, if they deploy applications rich devices with ease of use and with most of all hi-res screens then they will dictate the way.

]]>