Mobile operators are not alone in providing wireless connectivity. And as end users’ connectivity options become more diverse, mobile operators must seek out new ways to keep themselves relevant.
Mobile World Congress is where the mobile operator community convenes to search its soul. To collectively address the big existential questions: What are we? What are we going to be? In the good old days, when competition existed only within the community itself, imagination was the sole constraint on discussions. In 2015, a new reality has entered the building.
You can answer those big questions in many ways. A mobile operator is at once a legally obligated licensee, engineering organization, retailer, distribution channel, billing engine, customer service operation, brand, wholesale dealer, and more. Many have wider aspirations, their sights set on advertising revenues or the Internet of Things.
Ask a typical end user, though, and they’ll probably get right to the nub of it, telling you a mobile operator is a company they pay for wireless connectivity.
So, how does the operator landscape look today?
GSMA counts almost 800 mobile operator members, which shakes out at roughly one operator to every ten million people on the planet. It seems like a fairly spacious environment. Indeed, the current wave of operator consolidation continues to gather momentum, so it looks as if the prevailing trend is towards a decrease in their total number.
Scan the landscape for the wider category of wireless connectivity providers, however, and it becomes clear that mobile operators are not alone.
There are MVNOs and resellers, for a start. Many may be niche players but by no means all. As discussions around UK consolidation continued in February, Sky and Carphone Warehouse Dixons—both heavyweight consumer brands in adjacent sectors—announced plans to enter the UK market with virtual offers.
Many markets are evolving to quad-play service models as cable and fixed broadband providers everywhere are adding wireless connectivity to the mix. They’re muscling in on what was once the peacefully exclusive preserve of the mobile operator.
And feverish anticipation is building around Google’s entry into the U.S. wireless market. Reports suggest Google will buy wholesale connectivity from two operators, connecting customers to whichever provides the better service in the moment. It simply doesn’t get more disruptive than that.
Wi-Fi will form an additional element of Google’s connectivity mix, one I’d bet will be fundamentally important. We don’t yet know exactly how this will look, but we do know that traction gained by the ‘Wi-Fi First’ service model was one of the key trends of 2014. Initially a means of start-up disruption, Wi-Fi First is now being embraced by larger players. U.S. pay-TV provider Cablevision provides a recent, high-profile example
Emerging, alternative wireless service providers, large and small—unrestricted by legacy networks, investments, and business models—view wireless connectivity as bigger than mobile. They view connectivity as a means to an end, and, in so doing, they align themselves more closely with today’s smartphone user than mobile operators do.
Here’s another perspective shift: Beyond the wider communications sector is a further group of wireless connectivity providers, equally disruptive in their own way. Businesses providing amenity Wi-Fi for free exist in such vast numbers that their continued growth constitutes a genuine connectivity megatrend.
Now, I suspect it’s difficult enough for the mobile operator community to accept Wi-Fi First players as entirely legitimate operators. Businesses offering amenity Wi-Fi probably don’t even register.
But this a dangerously restricted, cellular-centric view. In reality, every consumer-facing business that provides amenity Wi-Fi—from airports, sports arenas and shopping malls, right down to the café on the corner—is a player in the operator landscape.
Like mobile operators, they are providing a valuable connection. Like mobile operators, they are actively sought out by consumers who want to be connected. And they affect the operator landscape on an altogether different scale.
To provide an example: Devicescape has 20 million discrete locations in its Curated Virtual Network of amenity Wi-Fi hotspots worldwide. But, because we deliberately restrict the locations in our network based on quality, availability, and security in real time, that number is less than 10% of our total monitored base. And our total monitored base is itself only a portion of the Wi-Fi that’s actually out there worldwide.
Because the connections amenity operators provide are secondary to their core business, the experience available to users is not always first rate. This is tolerated because connectivity is free and available where the user needs it. But it’s a world away, for example, from the experience offered by mobile operators on their networks.
Mobile operators ensure the best available connection (across three generations of network technology), deliver network access that is invisible and automated, has in-built security, and requires no user intervention. This experience is one of their greatest assets, and it’s the benchmark for all wireless connectivity experiences. But it begins and ends on the cellular network.
Smartphone connectivity very definitely does not begin or end on the cellular network.
At Devicescape, we believe that end users want an integrated wireless service that delivers connectivity everywhere, irrespective of bearer technology. Keen to check we weren’t wide of the mark we surveyed hundreds of mobile operators for their opinion this time last year: 70% of them agreed with us.
Take a look at today’s operator landscape; there’s no way 70% of mobile operators are doing what they said they think is necessary. It does look, on the other hand, as if powerful incumbent players from neighbouring sectors have spotted an opportunity to take advantage of this inertia. And these new competitors may not even be concerned, in the first instance, by profit.
The mobile operator landscape is part of a wider wireless connectivity provider landscape which we believe will be dominated by players that take a Connectivity First approach to service provision. That landscape is changing fast. The biggest question of all for mobile operators today is: How will they secure their position within it?