Mobile app explosion changing network planning

Tom Nolle, CIMI Corp.
14 Apr 2010

For a decade or more, mobile service was synonymous with mobile voice calling, and the only mobile appliance was a handset. Today, the service dimension has expanded to SMS, content and internet services, and the device dimension has grown from handsets to dongles, eBook readers, smartphones and tablets.

At first, service changes like SMS drove changes to mobile devices, but now that's turning around, and the consequences of the change to a future driven by mobile appliances are truly profound. That's especially true for those who plan and deploy mobile network infrastructure.

Service opportunities evolve because mobile users think of new things to do with mobile services. The explosion of interest in smartphones and their mobile applications drove the largest change in services in the history of telephony because the new smartphones and their developer programs created a flexible way of experimenting with new models of behavior support. Services make money by supporting things users want to do, and new money means wireless operators need to find and support new things.

The challenges of free internet content

The challenge for mobile operators is that the appliance-driven model of mobile services creates a new risk of disintermediation. The internet creates a kind of seamless service fabric that crosses operator and national boundaries and touches every smartphone and every Web resource. Developers use this fabric to build applications for smartphones.

While the applications may have to be tuned to the software architecture of each phone, the Web resources available to them are universal. The problem is that this universal fabric is packaged and priced with mobile data plans, and for most mobile appliances, those plans are all-you-can-eat.

When generous data plans are offered in connection with devices with internet connectivity, they encourage the development of Web-based third-party applications to exploit the combination of devices and connectivity. Those plans boost average revenue per user (ARPU) for operators in the near term, but they may also reduce the market for a mobile operator's own specialized services.

The ability of users to get free internet content makes it harder to sell content as an operator service, and at a minimum, it tends to reduce pricing power. That means mobile operators need to consider how to create specialized services of their own before the mobile-appliance-driven revolution proceeds too far.

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