Telcos Failing to Capitalise on Mobile Web 2.0

Telecoms companies are failing to make the most of the growing popularity of the online information-sharing services of "Web 2.0", according to new research by global consultancy Arthur D. Little.

"The key drivers of today's internet growth are the users, who through web 2.0 can now create and distribute content instantaneously and globally in a manner not previously envisaged. In order to harness and monetise Web 2.0 the Telcos will have to rapidly address the needs of this community," says Richard Swinford, a senior manager in the Arthur D. Little Telecoms team.

"Younger Europeans are already showing their readiness to interact on the move, with 38% of them accessing email from mobile devices. Telecommunications businesses now need to offer access to the established web 2.0 services, for both communication and for the fulfilment of their wider social needs whilst on the move."

The challenge for the Telcos is to support these needs in the mobile environment whilst over coming previous barriers such as sharing across companies and territories and high mobile data prices, walled gardens around content and exclusive proprietary formats.

Telecom companies' unreadiness to satisfy this new demand comes at the expense of future revenues and will urgently need to be addressed.

The telecoms industry is now faced with the dilemma of whether to collaborate or compete with the newly emerged yet de facto web 2.0 leaders (flickr etc.) and face the long haul choice of building competing communities or take the reduced margin implied from partnerships with existing players.

Many organisations have already chosen the latter, demonstrated by Vodafone?s partnership with MySpace and 3's X-series portfolio deals including Skype, Google and YouTube. A final more stable but less growth oriented option is to opt out of the fiercely competitive service centric world and focus on pure bandwidth delivery, the so-called 'bit pipe' solution.

Telecommunications organisations which play in the service oriented space will need to be wise in their choice of partners, selecting companies who can successfully grow profitably as the models develop from pure advertising into more mature, and in the long term, sustainable revenue streams."

Posted to the site on 7th March 2007