I participated in an array of superb briefings last week at Mobile World Congress. The issue of the ‘data crunch’ was never far from the conversation.
One company I met on Sunday morning prior to MWC was apoplectic with rage about Facebook, Google and Apple. I won’t go into detail about the company’s identity except to say they’re a highly influential service provider to the mobile industry.
This company’s perspective was very similar to that of the France Telecom and Telecom Italia Chief Executives (detailed in this post). The collective view amongst many in the mobile operator space is that these ‘b@starding companies‘ (direct quote) ‘are screwing up the network for everyone and not paying a cent toward the network upkeep‘.
It was a fascinating discussion. I listened for a little while before asking this series of questions (I admit to teeing the guy up for the final one):
Q: Do you think it’s unfair that Facebook, Google, Apple and so on are not paying for the use of the mobile network infrastructure?
A: It’s insufferable. It’s ridiculous. It’s outrageous. (I’m paraphrasing his exact words. He used a few F-bombs too — highly entertaining.)
My next question:
Q: But the consumers themselves accessing Google, Facebook and whatnot, they’ve paid their mobile operators for the privilege, right?
A: Yes, but it’s highly irresponsible of these companies to keep on introducing new services that are causing [the industry] to have to spend more and more money maintaining quality of service. (Paraphrasing again)
My final question:
Q: Ok, so how would the industry react if, for example, Facebook simply switched off mobile access for every one of it’s 650 million users and charged the mobile operator £3 per month for the privilege of delivering Facebook content to the consumer?
A: [Silence for a few seconds, followed by a look of horror]
Heh. What happens when Facebook decides to tell the market that it can no longer afford to maintain it’s hugely expensive bandwidth and server infrastructure without the mobile operators coughing up. That could become a rather sticky conversation. Unlikely. But at least the example made this chap — previously apoplectic with rage — sit back and take stock.
I don’t think many people in the marketplace have thought things through when they argue that mobile operators are victims in the ‘data crunch’. It’s laughable that these giants are demanding the biggies like Google and Youtube cough-up when the consumers accessing these services have already paid to do so.
If the model is broken, fix it. Simply doing a T-Mobile and deciding that ‘unlimited’ means 500mb of data per month is silly. And offering ‘unlimited’ 250mb plans is ridiculous. It’s a guaranteed way to ensure consumers think twice about doing anything on their handsets in fear of bill shock.
It’s not about the race to zero. For some reason, the mobile marketplace is consumed with this race to zero. To be the cheapest. To offer the cheapest rubbish because that’s the only thing people will pay for.
Innovate. Truly innovate. And we’ll see some excitement and delight spreading across the market from consumer to operator.
You can see some of the ideas I’d like to see from operators in terms of innovation here.
Meanwhile, it’s not just me speculating about Facebook. The industry analysts Ovum have been doing so too. I’ll be publishing a post from them on that subject in just a moment.