Workspaces:3. Intermediaries changing environment/mobile providers
The importance of mobile providers as information gatekeepers
Claire Milne, Antelope Consulting
The global growth of the mobile phone industry is familiar. In rich countries, mobile phones are almost body parts, and an Economist overview shows how even poor people in developing countries make good use of these valuable tools. Mobile phone companies naturally publicise their successes and underline the social and economic value of their services. Mobile phones are recognised as essential for people on low incomes in countries as different as France, Brazil and Georgia. There is a case for their making a major contribution to mitigating climate change. With the spread of mobile internet, smart phones and their "apps" the potential of mobile services continues growing. But can and will people in developing countries actually realise this potential?
This article provides some background and outlines some recent relevant interesting developments. It concludes that, although many different parties are now involved in delivering services to end users, mobile network operators remain in the pivotal position for determining what will be available. The networks' dependence on spectrum points to an oligopoly for years to come, which in turn points to a continuing need for vigilance by public interest groups and regulators to ensure open accessibility of content. In particular, they should look out for extra content charges by mobile service providers, on top of flat rate internet charges.
Underlying the economics of wireless connectivity is the inherent ease of sharing it. Unlike a fixed line serving one spot and used only a fraction of the time, a wireless ‚Äúline‚Äù can be used in turns by many users in different places within range. This means total wireless capacity can be tailored to demand (gathered in from a large area), while made available in small chunks.
Especially now with wireless internet access, many different actors may be involved in providing service. Mobile network operators like Vodafone, equipment manufacturers like Nokia, and application vendors like Apple, are among the more visible. Application developers, content providers, service resellers, and payment processors (among others) are all part of the "mobile ecosystem". Their commercial relationships are complex and ever-changing, but often exclusive. For example, the iphone has been tied to specific networks, and applications have typically been tied to a specific model of smart phone. Now, manufacturers are moving towards open operating systems such as Android, so applications can be put on very different handsets.
One constant feature is the essential role of spectrum, a naturally limited resource. While the picture varies among countries, typically in any one place only two to four operators get spectrum and operating licences (because of perceived market limits as well as spectrum constraints). The Open Spectrum movement is up against enormous vested interests as well as real technological constraints in some bands, although unlicensed WiFi has been taken up with enthusiasm for small-area applications. Pending major spectrum usage reform, most countries are stuck with a mobile network oligopoly, which often deserves the nickname confusopoly.
3. Some recent mobile developments
Here are some examples of happenings in the mobile sector, some in developing countries, others in developed countries but with implications for developing countries.
- Consolidation of network operators into relatively few large multinational groups continues. Each conglomerate has regional if not global market power, and is in a position to offer uniform tariffs across all its countries of operation (rather than inflated roaming tariffs).
- Industry commentators‚Äô views on changing roles differ, for example on the need for sender pays data, the shape of future networks and app stores, but everyone agrees that the ecosystem is in flux.
- The informality and potential anonymity of prepaid subscriptions has been a major factor in their success. The rise of formal registration requirements has the opposite effect, as found recently for example in South Africa.
- The UK Royal National Institute for Deaf People argues (paragraph 25) for regulatory requirements for open access to mobile network systems, having been unable to implement its own real-time text service for deaf users. The Open Rights Group puts a similar case on broader grounds.
- Voice, the original mainstay of mobile networks, is starting to become just another application. Broadband network operators are providing voice connections through Skype and are driving other network operators at least not to block it.
- Completely virtual services whose users need not own a phone have arrived, for example Movirtu, a mobile network software platform providing a user with a phone number, voicemail box, prepaid account, and alerting facility that can be used through any phone. An Indian version is Comviva.
- Nokia money, a new form of mobile banking in which an equipment manufacturer itself becomes a licensed bank. This and similar moves could provide first bank accounts to many millions. Mobile wallets are appreciated in Japan, but their ability to track minute details of activity causes concern.
- The MiFi device converts a single mobile broadband connection into a WiFi hotspot that can be accessed simultaneously by several terminals. Similar arrangements could spread internet access, for example in rural schools.
- New technology options like mesh networks and enhanced charging intelligence continually expand the options for providing cheap, widespread, and flexible mobile services.
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This is a dynamic market with great potential to support positive changes. Mobile network operators are facing many challenges but retain huge power as the ultimate gatekeepers to information and applications that can be accessed over them. Unlike other actors in the complex mobile ecosystem, the number of separate mobile networks competing in any one area is constrained by physical spectrum availability as well as by man-made licensing constraints. In spite of the rhetoric, competitive forces are not, and are unlikely to become, strong enough in this arena to bring about outcomes that maximise benefits to ordinary users, let alone to potential users. Users in developing countries are far more likely than those in developed countries to depend on mobile networks for internet access.
Governments, public interest groups and regulators will therefore need to monitor and influence developments, and work with commercial players progressively to provide:
- full wireless coverage of all inhabited areas;
- systems enabling both voice and broadband data services;
- a wide range of terminal equipment supporting both basic and more advanced applications;
- a range of service packages, including charging arrangements and payment mechanisms, which bring service within financial reach of everyone (using shared terminals where necessary);
- content and applications meeting development needs, presented in ways that are appropriate and attractive to their intended audiences;
- open access to such content through all networks and suitable terminals.
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CDMA Development Group, a major mobile technology
textually.org all about texting, SMS and MMS
Claire Milne has had a continuing interest in mobile markets since heading BT;s Mobile Marketing Strategy in the mid-80s. From 1990 she has been associated with the UK Public Utilities Access Forum, which supports the interests of low income consumers. As a consultant with Ovum she advised the European Commission on consumer protection in mobile markets, and as an independent consultant she has advised regulators in many developing countries on expanding their numbering plans to meet booming mobile demand. With LSE colleagues she reported in 2006 on measures to make telecoms (primarily mobile) more affordable in developing countries. She now chairs Ofcom's Communication Forum for Consumers.