When cellcos effectively entered the broadband access business by way of all-you-can-eat flat rates, most did so with the underlying fear that they would be transforming themselves into "dumb pipes" - mere access channels giving their users access to over-the-top services that cellcos would rather be selling themselves.

Since then, with the rise of dongles and internet-ready smartphones like the iPhone, they've been nervously watching that now familiar chart of data traffic (and the associated costs) spiking while corresponding ARPU flattens or shrinks. And it's well understood by now that cellcos won't be able to raise ARPUs simply by jacking up access fees. They have to either add value to the pipe, or find a way to make money from the services game without resorting to the walled gardens that, for the most part, users have abandoned in favor of web brands and app storefronts.

That was a major theme underlying this year's Mobile World Congress, as delegates talked about the new mobile services value chain and the operator's role in it. Tellingly, many of them blame Google for trying to build a mobile data model that relegates cellcos to bit-pipe status - a charge that Google CEO Eric Schmidt denied during the Q&A portion of his keynote, arguing that Google's push for cloud-based services will become "the backbone of everything you do."
Whatever one thinks of Google's role in mobile, the good news is that the term "dumb pipe" is becoming swiftly anachronistic as the mobile industry becomes increasingly aware that their pipes aren't as dumb as they look.

"We're hoping to see an end to the use of the dumb pipe term. It's outdated and pretty meaningless in our eyes," said Thomas Wehmeier, principal analyst within Informa Telecoms & Media's industry research division, in a blog post on Schmidt's MWC keynote. "Operators have far too much data to ever be turned into dumb utilities. They need to turn raw data into structured information and then draw insight and knowledge about usage trends and user behaviors from that."

That awareness has also led to a resurgence of interest in service delivery platforms (SDPs) as a tool for not only unlocking that data, but also creating opportunities to work with third parties to make additional revenues. Industry efforts like the GSM Association's OneAPI are also working toward that end. Much of the technology is ready - the question is whether operators and regulators are prepared for the paradigm shift required to implement it.

Let the third parties in

Ironically, SDPs are nothing new - they've been around for ten years in some form or another - so much so that the definition of an SDP tends to vary (see "What the hell is an SDP?", p.6). However, operator interest in SDPs has risen considerably in recent months, says Jyrki Holmala, head of sales for the business solutions unit of Nokia Siemens Networks.

"Operators are looking to add new services, increase the speed in which they add them at a lower cost and simplify the whole process. SDPs enable them to do that," he says. "That's been true for some time. What's driving it more now is of course the whole broadband phenomenon that's going on now, even in emerging markets. Also, multimedia services are becoming easier to implement. Markets also are becoming more mature, so operators are looking to diversify their portfolio of offerings for consumers."