The $250bn smart pipe? | Mobile Networks | Mobile Entertainment

The $250bn smart pipe?

The $250bn smart pipe?
Stuart O'Brien


Networks / O2 / February 28th 2008 at 10:33AM

The GSMA believes new 'upstream' services could culminate in a market worth $250 billion.

A report by consultancy STL, commissioned by the trade body, says operators have a wealth of assets - based on its customer profiles and traffic - that would be immensely valuable to brands, content providers, government, retailers and more.

It describes this as an 'upstream channel' (as opposed to the downstream channel, through which consumers buy voice and text services), and estimates it could eventually be worth a staggering $250 billion in 10 years' time. And that's in the US and Europe alone.

Advertising would clearly contribute a substantial part of it. Last month the process began when Vodafone, O2, T-Mobile, Orange and 3 came together for a GSM Association-backed initiative to define a common mobile ad audience measurement system.

The aim is to make it as easy for advertisers to run campaigns on mobiles as it is across other media such as TV and press. By offering, in essence, a single media pack for mobile, the operators hope to monetise potentially every brand on the planet.

Simon Torrance, CEO of consultancy STL Partners, said: “Voice is in decline and data services are not taking up the slack. That’s why we need a two-sided business model that pulls revenue from both consumers and media. Telcos have assets that can tell brands where niche audiences are, not just on-portal but across the entire mobile network.”

Ironically, this move could turn 'feared' newcomers like Google into customers. Ultimately, this is a ‘smart pipe’ play that accepts operators should do what they’re best at – network stuff – and not try to be entertainment companies.

Tony Riley, CEO of mobile ad specialist Mobile Enterprise, said: “It’s a chance for networks to stop worrying about the big media and online brands and do business with them instead.”