The death of the Mobile Operators’ Closed Garden and the Dawn of the Smart Pipe
by Gil Rosen

3GSM was overwhelming - Any trade show that takes you more then three straight days to walk through is. From system integrators, content providers, enablers, device manufactures - the industry has indeed matured.

Out of the hustle of such a big event, there is one mega trend that I’d like to focus on - the death of the closed garden and the emergence of the smart pipe.

To understand why this is happening I think we need to quickly examine the role of the ‘Garden’ and see how it came to be in the the first place.

Many Internet years ago, when the world wide web had just started reaching mobile devices, when such devices were few, when they were expensive and of with horrible quality of service - mobile operators felt obligated to fill the default Internet home page with mobile adapted content. This, in turn, was supposed to have given users a good enough reason to surf from their mobile. The mobile content market was non existent and there was simply depth for users to find their own content. In addition, the companies providing mobile content were inexperienced and scarce. WAP was a techie buzzword, but all consumers got was a poor and slow experience, very much inferior compared to what they were getting used to on the PC.

Ego was (and still is) another factor. Yes, pure ego. Mobile operator executives believed (some still believe) that the mobile Internet should not be free as the “PC” Internet. The basic “rational” was that since they controlled the ‘gateway’ already they could and should control the content. This attempt is similar to what AOL has done very successfully for a long time - provide your subscribers with a content portal through which most of the content was consumed.

Most users have supposedly basic needs and when information is prearranged for them - they supposedly just use it, many times being unaware of the rich world beyond the fence. In the regular (PC) world it would be unheard of to have your ISP control your content but in the mobile world it became the de-facto reality.

The accumulated result drove many operators to try and develop in-house content divisions whose sole purpose was to fill the portal with content and services. Since part of the problem was the scarcity of the content, this was a necessary evolutionary step for the mobile Internet to develop. Someone had to get the snow ball rolling.

Today, I believe, the snowball has reached its critical mass ad guess what? People want more. Almost all new devices come with Internet connectivity, screen quality is good, connectivity fast/er, mobile content is abundant, mobile applications easy to install, WAP is rich, an open mobile billing ecosystem is in place, there is an understanding that the mobile web is different (more passive then active), services and sites have developed accordingly and most importantly users are getting more sophisticated. They actually know how to reach the web, save bookmarks and change default settings, all in all leading to the maturity level required to change the closed garden model as we know it.

My argument is not that the portal is dead, but that it can no longer be closed. Operators must focus on two major and parallel agendas:

1. Provide users with selected, popular, edgy content through the portal - a good example is mobile TV. Mobile TV broadcast is not mature enough to be outside the portal.

2. open the portal and work hard on partnering / enabling third party, independent, niche content/service providers serve users directly. Let users roam the mobile Internet world and reach places that are far from the portal as could be - and actually promote it. When more users will roam free, the more they will understand how to use it better and increase their data consumption, overall benefiting the mobile operators more then anyone else.
The almost incredulous statement I am making is that there is such a thing as mobile Internet. There isn’t! The mobile device is only a terminal. The Internet is the same Internet only viewed by a different lens. Its the years of indoctrination that have led most people to perceive them as two separate universes.

For several years now I have heard Mobile operator executives fearful of what they call becoming a dumb pipe. I don’t know who invented this word, but the psychological association in it has made the industry paranoid of what can be (and in my mind should be) the modus operandi for making loads of money - and its far from being dumb.

Becoming a pipe that effectively channels content while creating adequate processes for billing, content delivery and quality of service assurance (and a ton of other things) is very sophisticated, far from dumb. Dumb is thinking you rule the world. Smart is understanding your users want more choice then you (as an operator) can ever supply. Happy customers and loyal. That is the focus.

Focusing on loyalty through openness and wide selection of added value service, whether in house or external, is the right challenge ahead. Trying to win ground by holding on to something that is not yours is a battle all ready lost.

Gil Rosen
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