Now is the time of many New Year predictions. Instead of predictions, I would like to make my 2014 wish list. We cannot expect any dramatic changes in 2014, but there are several trends that make the telco and mobile businesses more challenging. Sooner or later telcos, phone vendors and app developers must decide, how they make money and profit in the future.
It is hard to make money by selling only smartphones (see Surviving in the smartphone business). Telcos are struggling with declining voice and SMS ARPU. Generally customers are not too happy with Telco's and their customer service (see The best churn-management solution). The smartphone market is now dominated by two ecosystems: Apple and Google. People have a lot of privacy concerns. Can we see betterment in 2014?
Here is my 2014 Telco and mobile business wish list:
1.New Telco culture becomes real, and not just limited to John Legere’s t-shirt. Telcos need new business models, new attitude and a new way to work with partners (see The future of carriers' revenue). T-Mobile’s John Legere and Uncarrier are promising early signs that something can happen and old models are being challenged.
2.We start to see a third mobile ecosystem. And I hope it comes from the open source space with a model for several parties to be able to utilize and develop it equally. It can also offer more opportunities for telcos. And it can mean better transparency as a way to resolve some privacy concerns.
3.Wearable mobile devices start to be something real and useful, not only gadgets in consumer electronic shows. Now we have seen many fancy demo devices, but nothing that would be real business soon.
4. Users get better control of privacy, including tools to see and manage their own data, but also tools for secure communications. This is now a business opportunity, not only mandatory obligation.
5.Mobile payment solutions take a practical and feasible route, and not focus on developing further more fancy technologies (see Vision 2014: Finance services finally go mobile). A good starting point is cooperation with retail chains to get users and points of sale.
6. More app developers could find enough users and revenue, when the market is now dominated by a few popular and millions of ignored apps. There is a need for niche apps too, but apps stores don’t make it easy to find them. Telcos could also utilize this opportunity to offer localized and niche categorized apps (see Localization an underrated opportunity).
7. Telcos don’t use any money and time to make their own VAS, but they really make an effort to find win-win partnerships and offer services from third parties for reasonable revenue share.
I assume most people in this business can agree on many of the above points. But it is always difficult to make changes until you are forced to make them. For example, the traditional telco business cornerstones, voice and texting, are melting away slowly and it is easy to postpone changes and just fine-tune pricing packages. Anyway, I believe those who are brave enough to make changes in 2014 will be winners in the longer run. 2014 is the year to face the facts, create new models and build the future. It is a year for brave business people.
Jouko Ahvenainen is serial-entrepreneur and co-founder of Grow VC Group (growvc.com), a new funding solution. In the 1990s Jouko worked for Nokia in Europe and Asia, and then lead the 3G practice at Capgemini globally. The last 12 years Jouko has been an entrepreneur and investor.