Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
A few months ago while in Paris, I got a bit miffed at my mobile services.
It knew I was outside my hotel and that I had an appointment I needed to get to. But the phone never offered to call me a cab.
Why not? I would pay extra for that type of mobile service. Providing such context-aware services is an opportunity that mobile network operators cannot afford to ignore. Smart phones and the mobile broadband Internet are a boon to the wireless industry. Yet in the midst of vast opportunity, mobile operators struggle to retain relevance. Voice has become a commodity, and all-you-can-eat data pricing has spawned ever-growing capacity demand with limited room for profitability.
With offerings that are merely bandwidth-related, Facebook, Hulu and other popular applications are decoupled from the network. Many users do not know which operator provides their connectivity. The result is ever-diminishing returns for operators, with little more than the next capacity upgrade to anticipate.
To combat these unfortunate trends operators need to rethink their strategies and overall business plans. A tactical response to declining voice-generated revenue and razor-thin data margins won’t do. They need a strategy to achieve relevance in an increasingly commoditized marketplace.
The intelligence built into smart phones must be matched by network and service intelligence to deliver operator-generated context- and content-aware services that are compelling for users.
In short, the focus across operator organizations should be a move from traffic and network engineering toward applications engineering. This is critical for providing an optimal and differentiated user experience.
Pricing and purchasing behavior must change because of erosion of traditional revenue sources. Edging beyond all-you-can-eat data plans is a good start. Providing relevant and differentiated apps stores is also welcome.
Operators can leverage their traffic control to reaffirm their primary role in managing and billing for the user experience.
Data-centric networks that use next generation packet core platforms will enable operators to deliver more network capacity with intelligence that prioritizes an application’s use of spectrum and network resources. Done properly, the advanced networks will enable new revenue streams by providing real-time information about the content and context of the traffic, while again providing a better user experience.
This information enables operators to deliver the required services most efficiently and creates a new marketplace for applications trends, security, support requirements and associated analytics.
We’ve barely tapped the power of information contained within communications networks, but it promises to be rich indeed.
As an example, recently an international team created a social map of Great Britain using more than 12 billion landline phone calls as a resource. By correlating calls to and from local exchanges and measuring the length of calls as an indication for closeness, the researchers drew boundaries defining regions where people have social connections.
While stripping individual identification to protect the privacy of the callers, the exercise yielded some surprises, such as the affinity of people in parts of Wales for those in the West Midlands. The usefulness of such maps for planning and government services would be even greater had the researchers included cell phone calls, e-mails and instant messaging in their analysis, the project’s leader, Carlo Ratti of the Massachusetts Institute of Technology, told the BBC.
Mobile operators have the ability to gain that deep knowledge. They know where the customers are, their patterns of interaction and their contacts. Operators can offer customized service to individual users who opt to let their information be used in exchange for convenience. Social media’s popularity demonstrates that many people, especially the young, freely give up some personal information to receive something they value. It follows that if the network is enabled to harness the vast potential of this information, it will yield tremendous benefits for both operators and consumers.
Traffic engineering has also been an integral part of network management for some time. We anticipate when a train pulls into a station that we need capacity for six dozen commuters as they use cell phones to initiate calls.
The next step for carriers is application engineering. Users are moving beyond just mobile phones. Some stream video to tablet devices and will soon play games on 3D action devices. Networks should anticipate not only where and when traffic volumes rise and fall, but also the traffic’s nature, to provide each user with an optimal experience.
Wireless device proliferation provides a unique opportunity to rebuild the user’s relationship to the network. Today, mobile phone SIM cards carry much information. In the future, an individual user may fulfill this function. The mobile network, knowing when a client is in his car, office or home, could adjust for different communications needs and devices for each setting. Meanwhile, appliances, cars, medical devices and so forth will have their own communicable information that will foster a significant machine-to-machine ecosystem.
As people find themselves owning more gadgets, each with a wireless connection, they will appreciate subscribing to a network that competently manages numerous devices. Wireless operators, who go beyond competence anticipating needs before the user does, can differentiate their service.
Providing premium service should inspire customer loyalty to their network operator. As operators develop expertise in applications delivery, they can start to become more strategic to customers, rather in the same way that today some game players prefer PS3 or Wii over Xbox because of a perceived superior user experience.
Digital media and wireless broadband are changing virtually every aspect of our lives. The old ways of watching television in a linear fashion are disappearing fast as people become accustomed to entertainment on demand, detached from the traditional constraints of time and location. We will come to a point where TV programmers use a viewer’s context to enhance shows.
The confluence of social networking, real time feedback and advanced devices makes this all but inevitable. Program makers are waking up to the potential for real time massive multiplayer online user interactivity – not just for MMO but for mobile MMO.
What prevents this from happening now? Nothing really. The basic technology already exists. All that’s needed is for program makers to work with operators to assure that applications and possibly “event engineering” – dynamic network changes based on consumer-impacting occurrences – become reality.
In the digital era, the only constant is change. There are significant gains for those who are willing to look for opportunities, to leverage areas where they have an advantage, to foster partnerships and actively cultivate a new way to engage with users.
And, maybe one day soon, perhaps such innovation will make it so my network will offer to call me a cab before I’m aware that I need one.
Ben McCahill is strategic sales team manager in Europe, Middle East and Africa at Tellabs. In this role, McCahill is responsible for building customer relationships and delivering innovative and cost-effective mobile backhaul solutions to our customers. McCahill joined Tellabs in 1993 and has held various positions in R&D, customer services, product management and business solutions group. McCahill holds a Bachelor Degree in engineering from the University College Dublin and a Master of Science degree from Heriot Watt University in Edinburgh.
