Filling the app gap

John C. Tanner
17 Feb 2011
00:00

One thing it won't mean, Gilles insists, is a fundamental change in the cellco business model. 

"The traditional business models are still pretty much intact for operators - the core platform and core technology is the network, and the revenue stream is pretty much still ARPU-based," he says. "The additional activities are really intended to extend that core technology platform and augment the value provided to users." 

Gilles illustrates the point by comparing the relationship between cellcos and WAC with the relationship between Google and Android. 

"Google's core platform is search and advertising, and Android itself doesn't generate much revenue, but it does put Google search and advertising in the hands of mobile users, and offers Android apps make it more attractive to users," he says. "From an operator's perspective, WAC apps delivered via an operator's own app store makes the operator's network more attractive to consumers, but the main revenue stream is still the traditional one."

If nothing else, DoCoMo chief Ryudi Yamada certainly sees it that way. At a time when cellcos have been wondering how to get by as data ARPUs aren't growing enough to offset the decline in voice ARPUs, Yamada says the current smartphone/apps trend can actually reverse declining ARPUs - with the right strategy. 

Yamada says DoCoMo's various content initiatives from i-mode and i-appli to push services like i-concier and i-channel have boosted packet data revenues to account for nearly 50% of ARPU already.

"We have set a target to increase that to over 50% of ARPU this fiscal year, and to halt the decline of aggregate ARPU in FY2011, and then help it to recover and grow in FY2012," he said. "We're well positioned to achieve that with apps and smartphones."

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