In his keynote address to the GSMA Mobile World Congress in Shanghai, Telstra CEO, Andrew Penn, said that operators need to get ready for falling consumer data prices. To the point where the price could reach zero in the next 5 – 10 years.
Last week in the Openet blog Barry Marron wrote about the potential emergence of a two tier mobile society. This would involve one tier paying for data. They’d get quality service, bundled premium content and priority at busy times and high data allowances. The other tier would get free service – but with caps and lower QoS at busy periods. For this tier service providers would make their money selling content and add-ons. Another revenue stream could come from selling anonymised usage data to other companies (e.g. advertisers, planning companies). This blog was written in response to Sprint announcing a marketing deal offering free data for a year to new customers.
The message is clear – data is becoming a commodity.
Back to Shanghai and the GSMA congress. In his speech, Penn outlined the need for operators to stay relevant and ‘avoid falling down the value chain’. The key for operators to make money is to sell other services on top of data connectivity. He also pointed out that operators can learn a lot from internet-based companies such as Netflix, when it comes to offering customer friendly services with clear, transparent pricing.
Talking of transparency and pricing, nothing seems to be more clear than free and free services are at the forefront of ‘the phone box of the future’ announcement by BT this week. BT are getting rid of their public phone boxes and will replace with InLink UK smart kiosks. These will offer free Gigabit public WiFi, free UK phone calls, USB device charging and a range of other digital services, such as local information. These will be provided as part of a partnership between BT, Intersection (LinkNYC – Google backed public wi-fi kiosk operator in New York) and advertising company Primesight. As for the question of making money – it’s not going to come from telecoms services – the main revenue source from these kiosks will be advertising. There’s also the potential to sell data, as the kiosks could have sensors to monitor environmental conditions such as air quality and traffic.
The good news is that the iconic red phone boxes won’t totally disappear. In a smart PR move BT has also announced an ‘adopt a kiosk’ scheme to allow local communities to keep and manage their local red phone box.
Free data, selling third party services and working with partners, such as advertisers, in the value chain. Seems to be a trend that we’ve been talking about for years, but is now fast becoming reality.