Aging Dinosaurs or Baby Monsters?
by Aner Ravon

I’ve been hearing a lot of “mobile operators are dead” lately. Bleeding voice, cut throat competition, garden walls falling, devices taking over entertainment and internent access points, MVNOs grabbing loyalty…what a nightmare! Or is it?

If you have a neat operator centric solution in mind don’t pitch it to the investment community. Chances are you will kindly be thanked for your time and be advised to focus on the internet, enterprise or another golden egg space of the month that shows future potential.

Operators dead? Bullshit! Operators very well maybe on the brinks of becoming even more gigantic. Monstrous.

Strategy Analytics has released a new report, which concludes that the conditions are finally right for wireless payments growth over the next five years, projecting that mobile contact-less payment will be used to drive sales of US$36 billion by 2011. FeliCa, mobile payment service in Japan, is going to generate $900M this year and that’s in less less then 3 years fro inception. $900 Million! More then Myspace, YouTube or FaceBook…

It’s not simple, granted, and requires formation of new value chains which currently do not exist. Banks, Credit Card companies, Operators and Device Manufacturers need to build an ecosystem. In the end, operators will become wireless supermarkets of a new kind. That’s not trivial. Think about it for a second though. It makes so much sense!Operators stand better chances of becoming mobile supermarkets then they had of becoming serious content players. Operators are large, bureaucratic, organized, established enterprises with a natural orientation towards operating services; privacy, security, procedures, payments, customer support and calculating ongoing margins. Much closer to banks, credit card companies and retail chains then to record labels and internet portals if you ask me. Yes, there’s a market shift involved, but the cultural and organizational shift is not as dramatic. The DNA is there, and that, in my opinion, is the key.

Today’s pure communication services cannot generate tomorrow’s profits. It has more to do with the natural path of aging technology then with dramatic changes in the market. Tomorrow’s growth engine is not voice, video, WiFi or any other sort of enabler. These will only set the stage for services and applications. Operators will enable wireless trading and will benefit from mobile entertainment and media. Both ain’t peanuts. Hold off the obituaries.

Aner Ravon
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