Vendors pitch VAS platform solutions to beat «dumb pipe» nightmare

Dylan Bushell-Embling
22 Jul 2009

Email for all, mobile phone backup and integration of contacts with other apps - these are some of the features that mobile software vendors are pitching to help operators them stave off their "dumb pipe" nightmare.

Right now operators' worst fears are being realized, as device and internet firms set up app stores and plot cloud services on what they regard as their home turf.

Carsten Brinkschulte, CEO of AIM-listed Synchronica, says Cellcos fear Google more than they fear other carriers.

"I recently asked the CEO of a [Latin American] carrier who his main competitor would be. And the CEO said Google. He didn't mention his direct competitors, other operators in the region, he said Google, and next is Nokia," Brinkschulte said.

Both Google and Nokia have strong value-added service (VAS) strategies, he said, and if fresh services to capture more of the telecom market - such as Google Voice - pay off, it could be disastrous for operators.

"If [Nokia app store] Ovi and Google's mobile strategy succeed over the next five years, then the operators will be left with just data tariffs. There will be little if any revenue from VAS, there will be basically no differentiation except for price and performance [and] there will be very little customer retention," Brinkschulte said.

Synchronica is pitching its mobile email gateway suite as the kind of added functionality that can help bind mobile operators to their customers. "It is just one of the services. There needs to be more, but it is a key value-added service," he said.

The appeal of the gateway is that it works on virtually all kinds of handsets, whether they are smartphones, feature phones or basic phones, expanding the mobile email footprint to almost the entire customer base.

It obviously offers potential for emerging market carriers. So far Synchronica says it hasn't signed up any Asian operators, but Brinkschulte said he has received a lot of interest from the region.

The product boasts varying degrees of functionality on around 1,200 devices. Synchronica last month launched a shrink-wrapped version for enterprise customers that can be installed within a day and downloaded for a free 30-day trial.

Synchronica was receiving three to five requests a week from businesses for such a product, and the company finally gave in. But Brinkschulte said the company would continue to seek deals with operators.

"There are 700 carriers worldwide in hundreds of countries," he said. "You could call it an interim solution for the next two years, when we think we'll have hundreds of operators using our software," he said.

Carriers offer the better route to market because they can offer the service with special pricing arrangements, or bundled with data tariffs. "[And] with carriers we are able to offer our product not just to businesses and enterprises but also to professional consumers and consumers."

Another vendor, Critical Path, says the success of Apple's AppStore has created huge follow-on interest in mobile storefronts, while consumers are simultaneously becoming more willing to download applications from brands other than their operator.

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