Mobile Carriers Are Lost

This week all the movers and shakers of the mobile phone industry are gathering in Barcelona for another edition of Mobile World Congress (MWC) or as I like to call it – Boondoggle de España. MWC is a gathering of wireless carriers, device manufacturers,  mobile infrastructure players, content providers and others that are interested in the mobile space.

I’m sure one thing that will be on everyone’s mind is the USD $19 billion acquisition of WhatsApp. That single acquisition has clearly shown that mobile is the future and there is big money in it. The mobile carriers must be hitting their heads against the wall because the money they are losing to these messaging platforms is a sizeable portion of their revenue. Currently, the mobile carriers are just dumb pipe providers and enabling companies like WhatsApp to make all the money.

You hear terms like social, local and mobile thrown around all the time and the mobile carriers have the keys to the kingdom since they have access to all the components:

Social – they know how often and for how long you call people (call records are much more richer then just a phone book entry)
Local – they know where you are via GPS data and cell phone tower triangulation
Mobile – they are the Mobile in Mobile, need I say more?

Yet, the mobile carriers can’t monetize their way out of the low ARPUs (average revenue per user) they are currently getting. For the past 10 years the carriers have been living off exorbitant roaming rates, SMS and VAS (value added services). VAS was not really value added anything, it was garage services offered by the carriers. SMS is officially dead on arrival and roaming rates are coming down everywhere. It appears the carriers are locked in a battle with themselves to offer higher speeds and monetize via the download caps that are in place.

It’s a shame since the mobile carriers have the 3 pieces to the puzzle that every app developer wants. Many might say there are privacy concerns with the data that the carriers have and thus they cannot monetize it. I say BS, if the carriers came out with a free phone that was entirely paid by advertisers that phone would sell out overnight in India even if it had a long list of terms and conditions attached to it – free is free. Imagine a phone that could serve up local offers based on your geographic location or based on the number of times you called Dominos Pizza. The ideas are endless and the revenue potential to the carriers could be much more then what they now generate from end consumers. But, with all the technology the mobile carriers have they are clueless and lost when it comes to monetizing in the mobile era.