Time now to partner

27 Jun 2007
00:00

In the world of mobile social networking, service providers can either travel alone or with a partner in tow. Whichever way they choose, challenges - and rewards - await them.

Mobile operators have two main options for developing a mobile social networking service: by Internet extension, that is by providing access from mobile phones to existing Internet social networking services, or create new social networking communities from scratch on their mobile network.

These options are not mutually exclusive. They offer separate, distinct value propositions.

Strength in partnering

Mobile operators are finding that social networking sites are becoming keener on partnerships as a result of their experience in trying to do it alone. Ideally, social networking sites prefer to address the mobile opportunity independently. However, most of them have come to realize that by doing so, they will end up being confined to a niche.

As a case in point, Orange UK is now talking to several of the current leaders in social networking.

In early negotiations, social networking sites have all started off with a bullish view of conditions in the mobile world - discounting handset issues, business models, customer demand and so on.

Initially, they often try building Java client versions of their sites, despite the known complexities of such developments for many devices, and the resulting costs for operators of managing several different clients for many different devices.

Such impacts are not initially appreciated by individual social networks and they are skeptical at first, but when they try provisioning Java clients, they realize that it is difficult to make it work smoothly.

Most social networking sites are currently engaged in a 'race for scale,' and are keen to work with established partners to manage the disparity between the scale of their operation and the size of their user base.

There are resulting mismatches between the expectations of the social networks and those of the operators, regarding both the uptake and the revenues of their mobile services. The benefits for operators are initially relatively small, yet could still be comparatively large for some social networks.

The going it alone approach is more of an uphill journey. Rather than building on something that already exists, operators are re-inventing social networking as a new service on the mobile network.

Apart from the investment required to build the service infrastructure, substantial marketing investment is also needed to build the critical mass of service users required to make usage take off.

Another disadvantage of this approach is that the addressable market for the service is confined to the operator's own subscribers - unless operators can agree to interconnect their separate social networks.

However, there are also advantages. There is no need to share revenues and branding. It is also more viable to make this a free service to users since they will be staying on-net anyway to use it.

Orange UK believes that the operator's own approach is well worth exploring.

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