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'We're from the mobile industry and we're here to help,' was the message from cellco heavyweights at Barcelona last month.

Amid the usual calls for less regulation, honchos like Vodafone's Vittoria Colao and Telefonica's Cesar Alierta not very subtly said they weren't looking for bailouts and tried to make the case that cellular was part of the solution to the economic crisis.

Mind you, increased productivity often means staffing cuts and lower spending rather than jobs and spending, but their ebullience reflects the wider confidence of the sector.

The global economy might be underwater, but the mobile industry is doing okay. Not great, but okay under the circumstances. Profits are taking a hit from the recession, but competition is stable and the product mix is increasingly weighted toward data.

Naturally, that doesn't apply to the supply side of the business; infrastructure vendors are consolidating and the handset business is as cut-throat as ever, but thanks to mobile broadband service providers are arguably closer than anyone to a sweet spot in the world economy right now.

If you measured the industry by innovation and its ability to attract new entrants, you'd say cellular was especially healthy.

Mobile is top of mind for IT and internet leaders Apple, Google and Microsoft, and along with established cellular players like Nokia and Intel, they're driving innovation in the industry.
But that is the problem. Very little of the innovation is coming from the operators themselves, and that's why today's self-confidence seems dangerously misplaced. 

Carrier leaders need to recognize that the industry culture has evolved to deliver scale and reliability. Even among small and young cellcos, it isn't geared to innovation. 

Only a few groups - such as 3 and Bharti - have shown much in the way of innovation over the years, and significantly both are part of much larger companies.

Lack of understanding

But the real challenge is to operators that seem not to have realized the world is changing. One cellco executive I chatted to recently was still peddling the line that 'only we truly know what the customer wants and how they use their phone.'

Evidently, they knew it so well that they didn't bother supplying an apps store, a touchscreen phone, compelling downloads, or anything other than ringtones and walled-off access to the internet.

Thanks to the arrival of wireless broadband, cellcos are riding high right now, just as their fixed-line brethren were half a dozen years ago. But like the wireline carriers they too face marginalization and commoditization.

They should heed the underlying message from the success of iPhone: for all their efforts in the past decade, the cellcos have been a miserable failure in mobile data.

To the extent that the jump in mobile data use is not a result of faster network speeds, it's largely because of new devices like the iPhone and the new apps and content that they bring with them.

The iPhone and the BlackBerry have been popular not just because they work well in the hand, but because they're part of larger, integrated solutions.

Cellcos today are enviously eyeing Apple's apps store as a solution. But that is a hot segment, with Nokia's Ovi and Android retail platforms about to launch.

Moreover, an apps store requires managing a developer community, something that only the big players like China Mobile or Orange can sensibly attempt.

For most service providers, the opportunity is not about selling content and apps but enabling them: making sure that developers can reach their customers, can know where they are and can bill them and that they can write to a certain standard and know they will work on all operator platforms.

Operators need to recognize that the broadband bonanza will not last, that they've been outgeneraled by device and internet firms and that they don't know the market anywhere near as much as they think.

Their best bet is to marshall their strengths in network reach and enabling systems, and be the best channel partner and platform for the broadband mobile internet.