Have mobile operators become ‘dumb pipes’?

Osman

Osman Iqbal

13th October 2008

Around this time last year I was researching the ‘Navigation & Location Europe’ conference and I was speaking to lots of LBS application developers who were telling me one thing: They wanted more support from mobile operators. This essentially came down to two points – with the lack of GPS enabled phones on the market they wanted easy and unrestricted access to Cell ID information. But, moreover, they wanted much greater help from operators when it came to promoting and getting their applications to market.

So, a year has passed and what has changed? Well, basically everything…

It's been a bit of a mad 6 months for LBS, smart phones and applications

The two complaints mentioned above now aren’t really a concern and the market has been blown wide open. Firstly, developers are in mobile GPS heaven. Apple iPhone, Samsung Omnia, Nokia 5800 (to name one), HTC/Google G1, Blackberry Storm, Sony Ericsson Xperia… Essentially, we can say that smart phones now come with GPS.

The second concern (getting your apps to market) is also now not a problem thanks to Apple’s app store, Nokia OVI, Android’s marketplace etc (I won’t bore you with another long list!)

So, how do operators fit into the whole mobile LBS ecosystem now? What can they offer and, for the operator, how are they going to get a chunk of the profits from LBS?

My questions is: have operators become a ‘dumb pipe?’

So, what is a dumb pipe? Well the term refers to an operator being used simply to transfer bytes to and from the customer’s device and not being able to increase their position or add any additional services beyond simple network operations. The term basically stems from the internet where ISPs managed to botch their position and now provide nothing but connection and bandwidth.

Has this happened to the operator? Well, I think it’s a bit premature to say that – but they really have not helped their cause. This time last year they could have tied in application developers and pushed LBS hard to market. But it’s still the case that the average consumer isn’t even aware of what’s possible.

Although, that’s changing fast. I haven’t travelled on the London Underground in the past month without being confronted with a Samsung or Nokia poster informing me about the wonderful world of maps. But it was the feeling last year that devices wouldn’t push this – it would be the operator.

The big thing is this – last year operator and their portals were the only way you could get your app onto a phone (apart from it being preloaded on the device) so they were vital. This year, it’s all about the marketplace, so it’s been blown wide open. The point is you don’t need the operator anymore. You can completely circumvent them if you so wish.

Think about the iPhone – you don’t need the operator for any reason in your experience. You even use the Safari browser to go online – completely bypassing any operator portal.

Well, what now for the operator? If you don’t need them then aren’t they dumb pipes? That could be said, but the operators are not out of the game yet…

There are a few services that operators can still offer app developers, but the one thing I’ll pick out is the creation and sale of APIs – especially those that give access to Cell ID information. Ok, so the smart phone is sorted – but the mobile phone is still an issue. GPS will become pervasive, but not yet. And also – Cell ID information can always be used to compliment GPS for Hybrid location. So the operators can provide an API to lookup a cell with a position and also they can also provide server side Cell-ID positioning – both for a price.

So, there are opportunities for operators to keep offering services – meaning they can keep active in the market, for now at least…

Also, this wouldn’t be a good blog without a quick plug for my conference! Think the mobile industry in Europe and the U.S is huge? Well 300 million mobile phone users in India should put things in perspective – its big money. Check out the Navigation India 2008 conference agenda http://www.telematicsupdate.com/info/708