Research Notes

Status on the 3G-survival game

Many operators are 2-3 years behind schedule, and in danger of not making it to the finishing line.
Mobile operators are taking part in the greatest survival game the world has ever seen. Those who make it will make a killing. Those who don’t will die.

A new report “Show me the money” by Strand Consult conclude that many operators taking part in this 3G-survival game are 2-3 year behind schedule and in danger of not making it to the finishing line. The reason being that they are using old gameplans for a new game. They are using 1.generation strategies for 2, 2.5 and 3.generation markets.

The rules of the 3G-survival game are few. The challenges are many. Operators must successfully make it through its five stages:

2.Premium SMS
3.Premium WAP

During each stage, they must successfully meet a number of challenges:

-They must implement the new technology
-They must design new revenue models
-They must establish partnerships with content providers and media businesses, and make it attractive for them to develop and market quality services
-The must educate their customers in using, buying and paying for mobile services

Most operators have succeeded in implementing the new technologies on time, but have failed to design revenue models, co-operate with content providers, and in educating their customers.

Content providers in 12 countries are ready to deliver content to mobile operators and their customers. In 15 countries content providers will soon be ready to do the same. They are ready to help operators make money.

However, many mobile operators are NOT ready. Many of them often act as if mobile phones were still purely for talking to each other, and this old mindset is keeping them from developing the new revenue models necessary to be successful in the market for content-based mobile services. It is because of this old mindset and its outdated strategies that many operators are 2-3 year behind schedule:

-Operators should have focused on SMS services between 1997 and 1998. Many did not do so until between 1998 and 2001.

-Operators should have focused on Premium SMS services between 1998 and 2000. Many operators have delayed this focus until between 2001 and 2003.

-Operators were expected to focus on Premium WAP between 2000 and 2003. Many operators have delayed this focus until 2003 and 2005.

-Operators were expected to launch UMTS services in 2003. Many operators will not be UMTS ready until 2006.

To these operators the delays spell financial ruin. They cannot wait that long before beginning to make a real return on the huge UMTS investments. The revenue generated from Premium SMS and WAP services will simply not be enough to finance the debts incurred from buying UMTS licences.

What mobile operators must develop, and develop fast to make up time, are new game plans – new revenue models. Many operators need to formulate strategies that can better help them meet the challenges of the 2. and 3.generation mobile market.

In a new report ‘Show me the money’ Strand Consult maps and analyses 28 different operators’ different revenue models and how successful these models have proven in different markets. The report shows how mobile operators around the world are meeting the challenges of the 3G-survival game.
More information on the report

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