Malaysian mobile phone users make up of more than 21 Million subscribers or equivalent to 80% penetration rate of the addressable market in 2005. Currently, these mobile subscribers contribute the highest revenue per user amongst all other existing subscription in the service industry. It is not surprising that the mobile business has been in constant observation by investors in and out of the country.
Telecommunication operators are looking into several technology investments amounting to billions of Ringgit to ensure that further advancements can be made to port more service over to the mobile landscape in order to inculcate more services to complement the existing arrays of service portfolio that they currently offer.
However, with the increasing capacity of bandwidth capabilities over existing 2.5G and 3G telecommunication networks that they have, the convergence of technologies have also made it possible for other service providers external to the mobile telecommunication industry to participate without the commitment to the infrastructure development. These are companies that are generally called the “free-riders” from the internet industry.
Globally, we have seen trends in the digital economy where internet service providers are being plagued with the existence of similar free-riders that would post services on the web and profiting from it. Operators are left to earn the fixed rate access fees and these free riders will benefit from the value added services they offer. These are commonly companies that are funded by advertisers for their huge database of subscribers and communities
The threats are real. Here are examples of these free riders that may be the dominant player in the mobile landscape in the future ;
Yahoo! : Yahoo is in the search engine that has expanded its portfolio to serving the mobile segment through the introduction of Yahoo!Go and Yahoo! Mobile. Yahoo!Go provides a client that is similar to a walled-garden portal consisting the comprehensive range of services that they offer in the full blown web version, it creates a single point of reference for mobile users to access their mails, picture sharing services, directory and more. Yahoo mobile on the other hand, offers wallpapers, ringtones and logos. With the potential of cheap VoiP Services in the near future. Currently they have 23.3 million mobile subscribers (or 12% of their total web subscribers) using the mobile portal.
Google : Its core technology and business is the search engine algorithm. It introduced the free e-mail service with the largest mailbox size to date to ensure that they can deter its subscribers from terminating their services. Now, they are adding more services such as Google Earth, Excel viewers and more interesting innovations to the point of even threatening the dominance of Microsoft. They have introduced a mobile version of their services recently and we may see services such as mobile search engine, VoIP services, GPS-enabled business directories over mobile (leveraging on Google Earth) and other location based services from them. Another possible move, MobileTV through their acquisition of YouTUBE recently.
SKYPE : Free PC-to-PC VoIP services at the moment and the sales of VoIP minutes for services extending beyond the PC environment. They are currently announcing their entry into the mobile space next year through several collaborations. In September 2006, they declared having more than 100 Million subscribers worldwide.
The three cited examples are just the more significant players that are pushing their way into the mobile business, there are many others like them offering free push-mail services, instant messaging services, Personal Information Management (PIM) and so much more.
In retaliation, some operators in the U.S and UK had made restrictions to these services to ensure that the free-riders do not succeed in their domination strategies. Others are looking into possible collaborations to have a win-win situation over revenue sharing negotiations and exploration of new business models.
Mobile operators will need to explore more innovative ideas and new services to ensure that the needs of their subscribers are well served, in addition to nurturing inelastic dependencies over the value added offered. This will ensure that the revenue leakage could be placed in control. With the convergence of technologies and competitive VoIP call rates, revenues from voice services are being corroded and data revenues are flattening… mobile telecommunication business will be in competition not only from the oligopolistic nature of the industry but also on the free market pressures of the digital economy… that is the imminent future.
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Mobile operators will need to explore more innovative ideas and new services to ensure that the needs of their subscribers are well served, in addition to nurturing inelastic dependencies over the value added offered. This will ensure that the revenue leakage could be placed in control. With the convergence of technologies and competitive VoIP call rates, revenues from voice services are being corroded and data revenues are flattening… mobile telecommunication business will be in competition not only from the oligopolistic nature of the industry but also on the free market pressures of the digital economy… that is the imminent future.
True, I agree with that. The so-called traditional Internet players are moving towards mobile. These people have strong presence and influence, it'll be ridiculously idiotic for any mobile players to mess with the former's territory.
I would say that mobile technology is still a few steps behind internet's technology. But with introduction of infrastructure, devices, standards and protocols, pricing and availability comparable to traditional internet, they are catching up fast. Question is, what will both of them do when that happens?
Possibly, mobile players can form a strategic alliance with Internet players. Both combined, there is a huge enough pie to share with, no reason why they can't co-exist symbiotically.
I see some local players are gearing towards that - Maxis recently did something with Windows / MSN Live. Again, interesting to follow and see what's next. I'm sure other mobile players are not sitting quietly :-)
Oh, by the way, you forgot 2.75G! :-) It is reliable and perhaps better than the current 3G!
3G will not be it*! It will fade into oblivion, just like Laser Disc. The introduction of VCDs and DVDs completely killed LDs (although there are some hardcore dudes who still swears by LDs...)
3G is like LD and WiMAX is DVD. Now, let's see what will happen when the government announce the WiMAX licensee early next year.
*This is my opinion based on feedback and personal experience.
True.. good observeration.
As at the moment, as 3G is making its debut, the mobile landscape is changing almost overnight and more competitive technologies are peeping in to challenge the promises of 3G with improved bandwidth capacity and technical efficiency.
Personally, the converging technologies are creating a mess in the overall telecommunication industry on determining the next or future path.. eroding the barriers of multimedia services, broadcasting media and communications...
But whatever may come,... the benefit is all for the consumers :-D
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