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Wireless Utopia

The journey towards a free wireless world.

The Telco. God's

Tuesday, August 29, 2006

Another month is coming to an end and what's better than finishing it off with a Mobile Monday event. So yesterday we had the August edition in Bangalore and the topic was Mobile VAS. It was carried over from the last month's discussion where we could not spend much time on it. Rishit from Verity Technologies gave us an good overview of the scenrio in India. The dicussion as usual was very lively with Harish, Sujai, Rajan and all others joining in actively.

The part that fascinated me the most was the challenges in actually providing a VAS application to the subscriber. It is seemingly very simple. Talk to the Operator and get him to host your application on his WAP portal or some other content provider's portal. Its easier said than done. The Operators are God's and God's rarely oblige. To even get a chance to talk to the right person is a big acheivement. Assuming that one has past that stage and the operator is ready, they will eventually ask the content to be delivered through an exisiting Content Provider with proven relationship.

So now the Content Provider becomes the God and you are back to square one! The same process has to be repeated once more. Assuming that one did manage to convince someone and get somebody to host the stuff on the portal, the revenue distribution will be something like 60:40 in favor of the Telco's. The Telco's will take the majority share just because of they hosted the application! So in the end of all the haggling, you dont really make much out of it.

The question goes abegging, why? Why make it so difficult to do business? Eventually its the Telco's are going to gain with more airtime usage and more revenues coming in from the subscriber. A Ecosystem is always helpful for the business. The present state of the industry is a classic case of the lose-lose situation. Eventually the content providers will be driven out of business due to the low margins, the consumers will be deprived of good content and the Telcos will lose the value addition. And I dont think that it can be justified for the simple reason that they invested so much in the network infrastructure! It still does not make any sense.

And this is a global phenomenon. Newsforge recently carried an article by someone under a false name ranting about his experience. All Telco's are born obnoxious. All Telcos are cash rich. And all Telco's fudge their numbers, provide poor customer services and simply scam people whenever they can. The best example of the scam in India is actually the dating services that the Telco's run. Both Airtel and Hutch provide this IVR system where one can hear sweet voices of girls telling about thier ideal mate. Only at Rs. 6 per minute. Dont bother to try it out unless you just want to hear someone's sweet voices and sleep deserts you in the nights. Nobody replies to your messages there (yes, i tried it out!).

The only way to break thier monopoly is to bypass thier network completely and create a new community sponsored voice network. Its a pipe dream and may not happen for a long time. But there are attempts being made. Skype is one amongst them. WiFi is another. And FON is the project which is being watched very closely by many. Their success will have far reaching implications for Telcos and their walled gardens.

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posted by Rajiv, 8:05 AM

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