Mobile Internet - the fight to the end, the EdGe

Starting about a decade ago, when broadband came to the consumer, it was marketed as the technology that would increase the "web-surfing" speed from the analog modem connection speeds of 56 kbps to 100s, and later 1000s of kbps. This was the marketing mantra, and ISPs touted every additional kilo-bit they could offer. But that was pretty much it. The point is, there were not too many Internet applications that made money at the time (there was no Google ad-sense) and just about the only folks making money off the Internet were ISPs and Internet equipment makers. There was no other business model other than subscription!

But now with the Mobile Internet, things are a lot different this time around in 2007. Here is a couple of reasons for why mobile operators do not want to let go of what services are running over their 3G networks

1. Mobile operators have paid up a *lot* of money for buying spectrum and installing 2-3G hardware in the early part of the decade. 3G technology that implements high-speed mobile Internet takes up a lot of this spectrum to deliver high speed Internet. Subscription models are not enough to get reasonable returns on this investment, especially since customers may not value the offered mobility more than a few dollars a month, given most of them are city-dwelling, almost always connected folks.

2. On the other hand, operators have learnt (painfully) from the seeing nimble and innovative application service creators like Google and My Space that there is a whole lot of money to be made by offering services directly to users. They missed the fixed broadband opportunity but don't want to miss the mobile broadband train.

So mobile operators are going to fight tooth-and-nail to protect what they perceive as the "next" big technology platform. I do not doubt this perception - companies like Apple (iPhone), Nokia (Ovi), and Google (gPhone?) also think that mobile Internet is huge. Not in the subscription way, but in the services way.

Lets take the example of Nokia's Ovi platform. Nokia's strength is that they make the edge device - the handset. Therefore, Nokia (or Apple or Google) will be hoping to push all the functionality to the edge. Cut out the mobile operator (again!) like this -

server =====(bit-pipe of mobile operator)==== end-device/software

Looks a lot like those money-making fixed broadband application services like Google's ad-sense. This is the heart of the battle now and ahead...the fight to the end, the edge.

Lets wrap up with the questions for a mobile operator right now

• Do mobile operators know how to charm the end-customer like the Nokias, Apples or Googles of the World?
• Can they break out of their "bill-them-monthy" business models?
• Can they be as fast, as nimble, and as trendy?
• Can they change, adapt, reform, morph, rejuvenate as fast as their new nimble competition?
• How long before legislation or technology (e.g. WiMax) wrenches open their presently closed mobile IP networks?