Why value is slipping away from the operators


I recently switched to a new handset, swapping my Sony Ericsson W900i for a Nokia N80. It was an instructive exercise which prompted me to think about several issues in the mobile telecoms industry: in particular, I was struck by how little added value my network operator (Vodafone) brought to the process. Almost all of the value in my user experience was associated with third party brands and the handset manufacturer.

My first priority with the new device was to configure it for email access. Vodafone UK’s web-site was able to send me a text message to configure the internet settings and it did this job very well. The interface was easy to navigate and the settings arrived in a few seconds. However, this marked the end of Vodafone’s involvement in the process.

I use Google Mail to manage my personal and work emails because its search technology allows me to access a vast archive of past emails wherever I am, on virtually any device with an internet connection.

To set it up on my N80, I simply opened the browser, bookmarked the Google Mail page and entered my username and password. The browser remembers me each time I access the page, so I will only need my logon details once. I also assigned a short-cut to the Nokia ‘multimedia’ key, so I can open my Google Mail account from anywhere within the phone’s menu system with two clicks.

Email access is a key feature for me and I was delighted to have it set-up so easily. All of my association of value for this was directed towards Google and, to a lesser extent, the Nokia software which allowed me to configure the short-cut. The result is a considerable improvement on my W900i, where I had to open the applications menu, navigate to open the Opera Mini browser and then scroll down to click my Google Mail bookmark.

At no point did I consider my network operator had added anything to the process.

It was at this stage I remembered the N80 supports Wi-Fi and since I was in the office, I simply searched for the company hotspot and switched to using that for my connection instead of Vodafone’s slower and more expensive cellular data network. The operator was now entirely out-of-the-loop.

My next task was to load the contacts from my previous handset. I use Mobical’s free SyncML-based PIM service, so all of my contacts were already synchronised to a remote server. To sync them to my new N80, I simply visited Mobical’s web-site, requested the SyncML settings to be delivered as a text message to the handset and hit the ‘Synchronise’ button. Within a few minutes, my new address book was populated with all of my existing contacts.

Again, the value was attached entirely to the third party brand – Mobical – not the operator. All of the data arrived over my Wi-Fi broadband connection.

With my contacts and email set-up, I could turn my attention to some of the additional features I use. I visited the Shozu web-site to request a download link for their media replication client. This application automatically syncs any photos I take to my Flickr account. Shozu’s sign-up processes is well integrated with Flickr, so I never need to enter any access details – I just know that whenever I take a photo it will appear on my Flickr page. I also set-up Shozu so it would only ever do this when I was within range of my Wi-Fi hotspot to avoid sending the large (approx. 1 Mb) photos at Vodafone’s exhorbitant data rates.

Added value? Yes, and all of it assigned in roughly equal parts Shozu and Flickr.

I repeated similar procedures to load Mobizines, an off-line magazine reader I like, and bookmarks for BBC news, my Google personalised homepage and even two web sites I use for accessing the company intranet and the content management system for our web-site.

By the end of the process, I was marvelling at how much the integration of web services with the mobile experience has improved in recent months. I now closely associate brands such as Google, the BBC, Shozu, Mobical and Mobizines with my mobile experience.

The only consideration I’d given to Vodafone, my network operator, was negative – because of its data tariff, I’d used Nokia’s inclusion of Wi-Fi technology to minimise my reliance on the Vodafone network. Obviously I will still need the cellular connection when I’m away from the office, but the Wi-Fi link has enabled a new group of high volume data services which I wouldn’t otherwise have considered. If I were to add a Voice-over-IP (VoIP) application to the handset, I would also cut my Vodafone voice usage by some considerable proportion by switching to the broadband hotspot for the hours of the day when I’m at my desk.

I need to qualify these opinions by acknowledging my situation is somewhat unusual. I had received the handset directly from Nokia, whereas most users would have purchased it through their network operator. The subsidy and tariff choice would have played a significant role in their user experience and value perception before they reached the set-up process.

However, my usage requirements are quite common: numerous people use services such as Google Mail and Flickr. Typically their loyalty to these services will be stronger than the link they feel to their network operator. Third party brands are taking pioneering positions in the mobile industry and starting to create a pull effect all of their own. They are finding ways to side-step the operator’s control of distribution and applying web technologies to create mobile applications which draw their power by leveraging existing user relationships.

The combination of this trend with more powerful devices from handset manufacturers is empowering users to take more control of their mobile experience. Users who take this approach are making a clear statement: they want the mobile environment to reflect their lifestyles and existing application relationships, not the operator’s corporate strategy objectives.

Operators which still harbour ambitions of creating their own media franchises would do well to heed this message.

The value in the mobile experience is being rapidly redistributed and operators will see acclerating commoditisation of their networks. Some change in the value perception is inevitable as it becomes easier for big media brands to make their presence felt in the mobile industry. However, there are steps operators can take to improve their strategic position while at the same time delighting users.

The most important change is to focus on becoming ‘enablers’ rather than ‘creators’ of the mobile experience. Operators must step back from trying to define experiences on behalf of their subscribers and start empowering them to make those choices for themselves. This means supplying easy-to-use tools for aggregating existing services into a mobile application framework and providing users with individual control over the appearance of their handset.

For instance, if Vodafone was structuring its partnerships correctly with companies like Google and Shozu, I should have been able to logon to a personalised Vodafone homepage and add services from those companies to my account. In fact, Google’s own personalised homepage application provides an excellent example of how a company can derive value from acting as an aggregator of third party information and services.

It is a simple vision: every mobile subscriber should have a centralised account management interface provided by their network operator which allows them to add new applications, customise the appearance of their handset, back-up their data and access basic carrier services such as online billing and customer care. This would keep the operator in the loop and benefit the user by providing a consistent interface for defining their mobile experience.

Through their control of retail distribution, handset subsidies and the billing relationship, operators are in an excellent position to build additional value in the mobile industry. A misunderstanding of their strategic position in the value chain and a culture of paranoia over the emergence of third party brands is damaging the user experience for their subscribers and, in the long term, their own prospects.


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27 Comments

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  1. 2
    Hampus Jakobsson

    I really agree. The operators are loosing their value as coverage is a commodity (here in EU, in the US that’s still king). The operators have not understood that the ‘channel market’ is is horizontalizing and that they need to add value, and integration with well known service brands would add value! Their suppliers, the handset manufacturers, are doing this for them now…

  2. 3
    Dean Bubley

    I totally agree with this. Most operators are still doing a slow drip-feed of adding support for new 3rd party applications, but only after they have wasted time & money trying their hands at their own miserable rival services & seeing them fail. Next up is operator-based IM, for example, when it’s blatantly obvious that 500m early adopters already use MSN, Yahoo, AOL et al. But instead of interoperating / optimising / enabling these to work well on handsets, you can bet that most will try & compete initially, or offer try ludicrous pricing models. They don’t seem to realise they’re battling against Moore’s Law, and that every year they waste pushing on a locked door, native handset capabilities improve by 50%.

  3. 4
    Jonathan Greene

    You could have actually skipped the carrier stop completely and used the Nokia settings page – http://www.nokia.co.uk/nokia/0,,77073, – where you can have your wireless settings sent to the phone directly for access points and messaging including email – yes Gmail is there.

    Nokia clearly gets that there are quite a few users who are willing to buy phones directly and have enabled their site to allow full configuration with the carrier at all.

    I’d definitely recommend trying Birstep’s Smartroaming which will let you set up an access point group which the phone sees as a single point. This lets you have a stack of WiFi and cellular and the phone is able to go on the quickest automatically.

    For VOIP – check out TruPhone… there’s a client for the N80.

  4. 5
    WebTrucker

    Marek, even though you represent a very tiny minority (tech savvy who actually spend the time to go through the trouble of setting up a new phone), I think you make a very good point.

    Unfortunately, many execs in large companies still think selling to operators is the way to gain a substantial number of users in a short amount of time. It’s not, but it’s going to take awhile to sink in.

    In the mean while, Microsoft, Yahoo!, Google and the rest of the companies who have something to offer mobile services & apps that the users really want, should take steps in making the over-the-air distribution & provisioning of their services easier … and advertise the crap out of them. Many people don’t know what’s out there!

  5. 6
    Dr QM

    Operators are the main perpetrators who have obstructed the booming of mobile data service. Every time a user wants to do something, almost anything, on the mobile, he has to feel the pain, e.g. gets charged with 50p or more. How will this sort of marketing strategy develop a mass market?! Over the years most people have already developed a mentality that Mobile is just too expensive to use. When you want to use 3 to access your company’s site, you can’t use the URL directly (on Motorola A1000) but have to use Yahoo search and click the link (if found) to proceed. What are they doing? How many common users would be willing to adapt their mentality to this?!

    The phone manufacturers come the second in the problem chain. How long have you guys spent time in trying to access a Wap site using (new) Nokia E61? I bet you failed to have found it yourself in the very beginning but was helped by somebody later.

    From my point of view, it is not difficult to correct all these. For operators, it is just the decision makers are not having the right vision for the future, for their customers and for their own company.

    For the mobile phone manufacturers, it is that they quite often using less-competent people in doing the design.

    Dr_qm@yahoo.co.uk

  6. 7
    Marek Pawlowski

    Thanks for all your comments on this article. I didn’t realise these sentiments were so widely shared.

    Just wanted to pick-up on a few points…

    Dean Bubley’s reply identifies “…a slow drip-feed of adding support for new 3rd party applications…” I would agree with this, but in defense of the operators, I would also add that service integration is not an easy task, especially if you want to ensure a reliable user experience from the outset. Part of their failings here can be attributed to legacy architectures which don’t allow for rapid deployment of new services.

    I can thoroughly recommend reading the article referenced in Anders Borg’s comments. It provides an interesting perspective on the structural issues which may be responsible for the culture of ‘equipment focus’ rather than ‘customer focus’.

    Finally, to pick-up on WebTruckers comments about my needs as part of the “tech savvy minority,” I’d certainly agree that I have more experience with mobile technology than the average person, but I’m not sure my actual usage patterns are all that different. Web-based email and services like Flickr are extremely common these days among all user types, not to mention a whole generation of younger users who have grown-up with access to web services. I may be slightly earlier than most in using them in the mobile environment, but I believe there is a great deal of pent-up mass demand out there if only the user experience could be improved.

  7. 9
    JR

    Our company provides mobile applications, content and games to operators worldwide. We see the same trend. Operators attempt to know what is best for their consumers rather then allowing the consumers the freedom of choice to make their own purchse decisions. As consumers become more educated and informed they feel allienated by their operator and left with the clear impression that the operator does not understand their “unique needs” nor cares. Look how AOL has had to evolve in the Internet space. From walled garden to its free. The operators are still in a good position to retain value by opening up access and provide consumers with a variety oc choices rather then their own proprietary applications. They are still the first stop on the consumers journey of discovering new applications and providers. I suspect they will realize this too late.

  8. 10
    Tommi Vilkamo

    Good post.

    > You could have actually skipped the carrier stop
    > completely and used the Nokia settings page

    Actually, you could have just used the built-in Setting Wizard app on your N80 to configure your GMail.

    > My next task was to load the contacts from my previous handset

    In the future, if you continue to use S60 based devices, you can use the built-in Data Transfer application.

    Anything else you would need (built-in S60 features) to help set up the device, please drop me a note 🙂

  9. 11
    Tommi's S60 applications blog

    Mobile user experience: operator vs. device vs. 3rd parties

    Good article at MobileUserExperience.com: Why value is slipping away from the operators. Quote: I was struck by how little added value my network operator brought to the process. Almost all of the value in my user experience was associated with…

  10. 14
    bshell

    Note that the new iPods will have WiFi. The much rumoured Apple iPhone will have WiFi. Should be very interesting. Yet here in Canada the E61 is sold by Operators as the E62 which is an E61 with WiFi disabled. Amazing. You can buy the E61 all over Vancouver from third party shops anyway. It seems to me that WiFi in mobile phones is the way of the future and it remains for a killer ap mobile skype-like application to appear. Perhaps Apple will be first to provide this in January 07.

  11. 17
    Marek Pawlowski

    As a follow-up on my personal customer experience, I should mention a situation I encountered with Shozu and Flickr after writing this article. I had been away from the office for several days and taken about 40 photos on my N80. Shozu had dutifully informed me that sync would be suspended while I was away from my home network as soon as it detected I was roaming in a foreign country.

    However, when I returned to my Wi-Fi coverage, I couldn’t work out why my photos weren’t appearing on Flickr. It was a very frustrating problem and something I spent about an hour trying to solve before giving up.

    I had started thinking very negative thoughts about Shozu, when I suddenly realised that the only reason the photos weren’t appearing on Flickr was that I had come up against my data transfer limit. This was a Flickr problem rather than a Shozu problem, but I had instinctively laid the blame on Shozu.

    Although I have now realised my mistake, it just goes to show there are still many pitfalls for brands pioneering the open services approach and that the absence of a central point of responsibility can sometimes have a negative effect on the customer experience.

  12. 18
    Andy Tiller

    ShoZu knows when your Flickr account is full, and puts your photos in a queue for uploading next month (when you are in Fickr credit again). You should have received an email from the ShoZu server explaining this – (clearly it would be better to receive this info on your phone rather than by email, and we’re planning this for the next ShoZu release).

    But you’re absolutely right – creating a good user experience when integrating services together is a complex business with many pitfalls!

    Andy Tiller (CTO ShoZu)

  13. 22
    Mobile4u

    Why value is slipping away from the operators

    I recently switched to a new handset, swapping my Sony Ericsson W900i for a Nokia N80. It was an instructive exercise which prompted me to think about several issues in the mobile telecoms industry: in particular, I was struck by how little added value…

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