EDITORIALAPRIL10
A familiar problem
at the industry: Just how, exactly, is money going to be made from LTE by the mobile operators? They, after all, are the ones that will be paying for LTE to make it to market in the fi rst place. Deployments of 3G technology saw indus-
A
try self-belief run riot. Today we must take account of the sobering realisation that those deployments have really only just begun to show their fruit—in ways that were not an- ticipated at the outset. Only by following the fi xed line community into fl at rate data plans have operators been able to coax meaningful data uptake from their customer bases. But mobile operators have little time for the lean pipe model that such strategies have forced fi xed carriers to adopt. There seems to be little doubt that LTE will
work as a technology. At this year’s Mobile World Congress technical performance was treated pretty much as a given. Business models, not technology models, are exercising carriers today, with even the infrastructure vendors reporting that their expertise is being channelled in this direction. And the more the operators question these business models, the more potential for concern there seems to be. Flat rate pricing is no longer looking sus-
tainable, for example. But how easily can end users—consumers in particular—be persuaded that they need to spend more to guarantee the kind of service to which they have already become accustomed? Increas-
s we stand on the brink of the fourth generation of mobile telephony a familiar problem is nagging away
ingly these consumers are spending on over the top services, with the mobile pipe relegated to a delivery mechanism while direct credit card billing relationships with content and application providers pull the revenues away. Something has to change. In one of our
interview features this month, MTS’ strategic marketing director Garrett Johnston suggests that carriers need to face the truth and ap- proach the likes of Google with the question: “How can we make you more money?” Only by focusing on enabling other organisations to exploit their relationships with end users can carriers derive revenues for themselves, he says. This would require a psychological as well as business transformation for many operators, shifting them, in some senses, from the centre of their own universe. Others have suggested that content origi-
nators need to subsidise the transport cost of the content they wish to deliver. It’s a potentially contentious issue, among those discussed by a range of experts in our bill- ing feature on p32, one of whom raises the worrying suggestion that operators have no idea what the cost of delivering various services actually is. When eventually it began to perform commercially, 3G raised more questions than it answered. LTE will surely prove no different.
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