Mobile operators face tough challenges becoming a Smart Enabler

By siliconindia   |   Thursday, 23 July 2009, 17:05 IST   |    1 Comments
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Mobile operators face tough challenges becoming a Smart Enabler
Bangalore: A new report from from global advisory and consulting firm Ovum, warns that despite the potential of mobile industry, the industry is once again in danger of binding itself in too much hype, and keeps trust on it to solve the challenges which prevail today. The mobile operators who wish to establish themselves as smart enablers will witness a big change and some of them might fail to make the transition, to achieve best-of-breed smart enabler status. Operators need to consider their and other capabilities as resources that can be marketed to third parties, not just end users, stated the report. An agreement is missing on commercial framework under which third parties utilize network , as the business model for first-generation enablers is established. Different models are being used, including revenue share on the applications sold, advertising and also from a variety of fee specifically bound on activating APIs, as it can be expensive, particularly for those applications that are transaction intensive. The industry must take measures to establish a consistent commercial framework, experimentation and flexibility are understandable at this early stage. "At Ovum, we think the most equitable model is one where there is an element of risk sharing; for example a tiered approach where operators only charge for API access once an application reaches a certain revenue threshold", said Co-author of the report Eden Zoller, Principal Analyst, Ovum. Operators need to build a technical, operational and rich commercial framework for supporting their assets and capabilities. "Creating a developer ecosystem is part of the smart enabler framework and one of the most challenging tasks for operators. Most operators' developer programs do not compare well to those offered by device or platform vendors and online players", said co-author Michele Mackenzie, Principal Analyst, Ovum. Operators fail in providing the right tools; they need to act fast on the needs and implementing solutions. Application stores provide an attractive retail distribution model for developers. It can help them to offer a wider range of applications and address the long lists of content, which they have failed to do previously. There are wider effects, as consumers might upgrade to more generous data plans as their appetite for applications increases, they also might upgrade to higher-end smartphones in order to enjoy a better user experience for their applications. Ovum states that an operator branded application store is an option for some. Operators need excellent scale and reach a developer platform and support program and a strong brand, to play in this space. "Mobile operators are not the only players who want to take on the smart enabler role. Developers and other third parties can turn to device platform vendors, like Nokia, Apple, Microsoft and Google, online players that, besides many of them also includes AOL, Yahoo, Amazon, and Facebook. These players offer benefits like large addressable market, lower levels of fragmentation with regard to the device and platform, and a trusted consumer brand," said Zoller. Operators have been slow in opening their Application Programming Interface, and might be too late to make the impact in the areas they wanted to. Location is also a case in point. The operator's network based location services including GPS, cell id databases and other technologies are few of many options and are not necessarily the best for all applications. "Before moving quickly, operators need to identify which enablers offer them most opportunity to differentiate as well as generate new revenues", said Zoller.

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