@MWC: Carriers demand relevance in new mobile climate

BARCELONA – With all the talk at this year’s Mobile World Congress event seemingly centered on the industry-altering properties of mobile applications, the players in the ecosystem that actually own and operate the networks that those applications run on have been conspicuously quiet. But make no mistake, they are a big part of the value chain and will not be left out of the equation.
This was apparent during a morning keynote address centered on the mobile application market, where Hugh Bradlow, CTO at Australian operator Telstra Corp. Ltd., provided the crowd with some straight talk on how carriers view the current mobile application frenzy.
While there has been some debate as to whether it was the applications or the robustness of networks that aer driving the current surge in wireless data uptake, Bradlow’s view is clearly in the network camp.
“Increased speed and lower latency has enabled the application market,” Bradlow said. “Without the network the iPhone would not have taken off. 3G kicked off the world of apps, and 4G will continue that evolution.”
This stance may be questioned in the U.S., where Apple Inc.’s first iPhone launched supporting AT&T Mobility’s EDGE network, forgoing its nascent 3G network until its second iteration a year later.
Highlighting the current disconnect between the developer community and carriers, Bradlow presented a slide showing an inverted pyramid showing perceived value by consumers with application occupying the large base at the top and the small point occupied by network access. This was next to a traditional pyramid showing investments with the applications taking up the small point at the top and network access in the pyramid’s base.
“Application developers can’t expect to get all the return on a small percentage of the investment,” Bradlow said, before later admitting that even without a cut of the revenue stream from selling applications, carriers are garnering benefits.
“Customers that run apps need a data package so it’s big business for us,” Bradlow said.
While admitting that there were too many operating systems and corresponding application stores on the market, Bradlow noted Telstra was not necessarily concerned as it saw itself as a mall owner where people would go to shop at specific stores within that mall.
“We want to be a facilitator like a shopping center in providing options for customers,” Bradlow explained. “We may have our own store, but will provide options. There is a place for shopping center owners and most of them are rich.”
Bradlow also warned the industry to not forget about the majority of customers who do not own smartphones and are thus shut out of the app phenomenon. He noted that smartphones currently account for around 15% of the device market with forecasts of growth to around 30% within three years.
“It’s a subset of the market and a very small minority at that,” Bradlow said. “We are not talking in excess of 50% of the market even within three years time.”
Bradlow added that there needed to be more support for the other 70% of the market and a way to transition those customers toward smartphones.