New markets, old competencies

What a busy industry we work in. The range of hot topics keep surfacing. But these are increasingly facets of the same thing, which has to do with emerging mobile broadband and how the technology is unlocking whole new markets.

 

Probably the biggest single thing that the iPhone has done over the past couple of years is to give us a tangible glimpse of what the future might hold. The iPhone and other emerging smart phones give an insight into the huge range of things you could do with mobile broadband. And we’re beginning to see the problem as not so much filling empty pipes, but getting enough bandwidth out there fast enough to satisfy demand.

 

It’s not just the creativity of the 85,000-plus apps that are available; it’s the level of integration between them. For example, take Shazam, the application that lets you discover what that song on the radio is, order it through iTunes and then play it on your phone: it’s so much cooler than trying to hum it to some geek in a record store! Mobile broadband creates an almost unlimited set of opportunities for people to deliver goods and services in an entirely different way.

 

The rock in the pond with mobile broadband is that it drives a totally different set of thinking, business models, relationships and ultimately money from the mobile voice and messaging world. Fixed Internet has pioneered a rethink on different business models where services are generally free at the point of use. So Google, Facebook and many other useful services cost nothing for us to join and use for as long as we want. But in reality, there’s no such thing as a free lunch; it’s of course the sponsor or advertiser who is footing the bill.

 

These new business models evolved in parallel with the growth of fixed broadband Internet connections and for a while, everyone, including the communications providers, seemed happy with plenty of new revenues and relatively little new cost as Internet services piggybacked on existing voice infrastructure. At least until the tipping point where copper/ DSL has to give way to fiber and the cost of infrastructure is way out of line with potential returns.

 

So mobile broadband providers can see what’s coming. For them, their networks are so tightly engineered that there’s no piggyback play here – just more billions to spend on new spectrum, 4G base stations and massively fatter backhaul networks. So there’s no wonder that there is intensive interest in new business models, new services and how the money will flow around.