Media companies: the new mobile providers
| There has yet to be a decisive breakthrough in media companies entering the mobile arena as providers. However, there are signs that an increasing number are considering this possibility, and that some are even ready to move forward. By becoming mobile providers, media companies hope to create an extra shop window for their products, as well as a new media channel for their content. Media companies have been active and highly visible in the mobile sector for a number of years. Among other things, they have licensed their content to mobile providers and developed services and content for handsets. Media companies are now in a good position to exploit the knowledge and experience they have so far gained – and to launch as mobile providers themselves. The past few years have, indeed, seen colossal growth in media companies’ interest and commitment to the mobile sector, as a result both of market and technological developments. These developments have cut the investment costs and access barriers to launching as a mobile provider, and reduced the need to have comprehensive knowledge of the mobile sector and mobile technology. Market developments Growing media company interest in becoming mobile providers is partly due to improved market conditions, which have made it easier to launch a mobile service without a network. The mobile sector has experienced a number of phases (see chapter 3.2 of the report) that have resulted in it becoming progressively easier to launch and do business as a mobile provider. Traditional MNO unwillingness to allow SPs and MVNOs access to their networks has decreased significantly, and some now even have active strategies to attract wholesale customers. This has led to growing interest from other companies to launch as mobile providers. The MNOs that have actively focused on attracting SPs and MVNOs have already established a very good wholesale business. More have since copied this model, leading to an increase in the number of MNOs with a wholesale department. Technological developments The other major reason for increasing media company interest in the mobile sector is technology, which has led to a big reduction in access barriers. It is no longer necessary to have a telecoms background to become a mobile provider, because the whole technological setup can be handled for a price by the technology providers themselves or the MNO. Changes in technology providers’ business models have also meant lower financial risk for new market entrants. Technology providers are increasingly adopting models whereby payment is linked to mobile traffic or customer numbers; revenue sharing is another approach, where the cost of certain wholesale products depends on whether they generate turnover/earnings or customers. With this business model, newcomers are able to establish a relationship between growth, turnover and costs. |
| To learn more about the role of media companies in the mobile market, we refer you to our report, How to Succeed in the Second-Generation MVNO Market. The report examines the different strategies open to media companies, and how these will impact the mobile market as a whole. The report also assesses the risks and benefits of each mobile provider strategy, using inspirational case studies to illustrate that the time for media companies entering the mobile space is here already, and that their participation and impact will grow tremendously in the coming years. How to get success in the second Generation MVNO Market |
