Carriers must remain fluid for mobile Internet to succeed

The future of the “anywhere Internet” likely will involve a variety of networks and devices, analysts said during a teleconference last week-and if wireless operators want to get in on the innovation, they’re going to have to open up the full Internet to customers and develop partnerships with the innovating companies in the Internet space.
The tight control of the wireless Internet, where customers are offered specific applications by the operator and there is a limited ecosystem of access devices, reflects legacy telecom business models and not of the newer, Internet-focused models, according to Yankee Group Senior VP Phillip Marshall. The high degree of control over mobile Internet access and the ecosystem “has resulted in the market not being a particular success,” Marshall said.
The traditional companies that were dubbed the “imperialists” will need to become more nimble and take more risks if they want to compete with the innovating “guerrillas,” according to Yankee Group Senior VP Boyd Peterson. He added that in much the same way as an earlier generation put forth the model “Don’t trust anyone over 30,” customers today are wary and distrustful of “anybody that’s trying to control [their] access to the Web and the things [they] want to do there.”
People want to do the same things on a mobile Internet that they do on the regular Internet, panelists concluded: consume content, join communities and conduct commerce. Carriers are more likely to succeed with lightweight applications and partnering with companies like Google Inc. and Skype Ltd. and building upon the innovators’ work to add value.
Traditional telecom companies’ success in the anywhere-Internet world will depend on several factors, Marshall said, including their quickness and willingness to offer new services-and to tear them down and offer new ones if some aren’t working-and their ability to take advantage of a wide range of third-party applications to build upon.
Networks, Marshall added, “are very communication centric. We believe that that has to change, to become more media-centric.”
Consumers, Peterson said, are likely to carry a number of devices and select which one-and which network-best suits their needs at a given time. He gave the example of a mobile worker in need of directions who has a laptop, PDA and cell phone. Consumers are likely to go through a number of decisions that basically boil down to “What’s the cheapest broadband access I can get for the application I’m going to use?”
In that scenario, he added, applications such as over-the-air music downloads for mobile phones aren’t going to be the wave of the future, because there are easier and cheaper methods of getting their favorite music onto a portable device. “Portable” does not necessarily equal mobile connectedness, and ubiquitous cellular broadband may not always be a consumer’s preference. Technologies such as Wi-Fi, WiMAX and other networks will help fill the gaps. In short, even if a cell phone could do everything, consumers may not necessarily want it to.
Peterson also said that in surveys conducted by the Yankee Group, consumers indicated that if they had to replace their digital music player and a phone was able to perform the same functions, 51 percent would still replace the player with a version of the one they had. Only 17 percent said they would go for the phone.
Although the panelists concluded that the true mobilization of the Internet is still a ways off, some carriers are moving in the right direction.
Caroline Gabriel, research director for Rethink Research, cited the strategy of Hutchison Whampoa’s 3 in Europe, particularly in the United Kingdom. The carrier has an all-3G network and plans to introduce flat-rate prices for an open Internet, plus it is preloading services from companies such as Google, Skype and eBay Inc. onto its handsets to “make the user experience as transparent and automatic as the one we see on the PC,” Gabriel said. She also cited Deutsche Telekom AG’s T-Mobile division as an example of a company using a converged Internet to drive bundling, with virtually unfettered Web access via its mobile Web’n’Walk service, plus DSL and the ability to leverage the company’s Wi-Fi hot spots.