The Future of Mobile – Without Phone Numbers

Sol Trujillo

Sol Trujillo

The most striking exchange at the recent Mobile World Congress in Barcelona was the give and take of jabs between Sol Trujillo , CEO of Telestra and Josh Silverman, CEO of Skype.

Sol represents the mobile business of the present and the past.   Josh is the future.

Josh Silverman

Josh Silverman

The rate of innovation and fundamental change in the mobile industry is out pacing the oligopoly based businesses ability to react or perhaps even acknowledge what is happening on multiple levels.

The basic argument was about whether that phones with Skype capability would grow the market with low cost, data application, voice calling services.

Sol Trujillo was less than enthusiastic about voice as a data service and as much said that he would use his monopolistic power to prevent that in Australia. (Those are my words, not his)

This is the classic industry transition that has been taught in every business school of merit. The existing entrenched companies reaction to a shifting structure is predictable, since their company’s enterprise value, their careers and their personal fortunes have been created with an old, but soon to be outdated industry structure.

The interesting aspect of the interchange in Barcelona was that the market shift is even greater than either of them hyped (Skype) or condemned (Telestra). This is much bigger than arguing whether making voice calls is a voice service (Mobile Carrier) or a data service (Skype).

There are five technologies and business models coming into play that will change the way the world utilizes mobile phones in the near future. These colluding forces are: Mobile Application Stores, Powerful Smartphone Devices, Advanced Mobile Data Networks, Social Networks, and Voice Over IP.

Here is my prediction for the mobile environment of 2015.

facebook_phoneYou purchase your sleek, touch screen, mobile communications device in an electronic retail store (or online). It is likely that some devices will have applications pre-loaded. Any subsidy or rebate that you receive for your device will come from the application providers who want you to use their specific services, not from the mobile data provider as it is today.

Once you have your mobile communicator you will then purchase data access, similar to the way you subscribe to your home or business Internet Service Provider. Your data provider might provide full roaming services (VZW, AT&T, T-Mobile), and/or fixed WiFi access. Your device will work with your home or business WiFi network in a seamless manner.

With your device and data access you can shop over the mobile IP network to download applications for you mobile communicator. Two of the must have applications will be your social network application(s) and your VOIP application.

It would make logical business and technical sense for the VOIP software to come bundled with your social networking package.

mobile-skypeYou will be able to aggregate your “friends” from several Social Networks and load them on your phone. Your VOIP provider (Skype) will be able to place calls to your friends directly. The use of phone numbers will diminish and be used for the 5% of calls you make to people outside of your friends group. Businesses will advertise to become your social network “friend”, so that you can communicate and call them with ease.

This model is not that far off from today’s reality. The Iphone application has several available Facebook applications and Skype applications, and can switch between mobile broadband service and WiFi.

The issue is that this new model strips the mobile carriers of their service model and relegates them to wireless roaming Data IP providers. You can understand why an executive of a Wireless Service Provider would take an aggressive stance against this thinking. The problem is that he is on the wrong side of the technology curve. This will happen. The issue is how long it will be stalled by politics. By politics I mean both company politics and governmental politics.

The fact is that it takes billions of dollars and Euros to license the spectrum and build out mobile data networks. The service model that these investments were predicated upon is quickly becoming invalid, and must evolve and is replaced to reflect the coming reality. There will not be a “free lunch” for the Facebook’s and Skype’s of the world to reap (or rape?) the investment of the world’s mobile carriers.

Rather then ignore, deny or fight an inevitable technology tsunami, the carriers would be better served by creating a business model that fairly compensates then for their considerable investments going forward. The new application providers such as Skype and Facebook will need to acknowledge the value of these mobile networks and work on creating the proper framework for all to move forward.

My follow-up article to this topic is here

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14 Comments

Filed under advertising, blackberry, blog storming, facebook, mobile, Mobile Application Stores, skype, smart phone, Smartphone, Social Media, social networking, Web2.0, wifi, wireless

14 responses to “The Future of Mobile – Without Phone Numbers

  1. Nice insight on a idea which sounds implausible at this moment.

    I would really be honored, if you can have somebody rephrase this article or give me permission for the same to publish this idea in my blog.

    Thanks

  2. As long as you give attribution with a link back to my blog , you can use the material from this article

  3. Wirelessman

    Steve,

    I agree with your article, but you know the wireless carriers will not allow this to happen. Wireless carriers (800 pound gorillas) will need to start now to invest (buy) in companies like twitter, facebook and others. This will stop (allow them to control) the technology migration. You may be reading the tea leaves. This is very similar to Time Warner and AOL. This is why Microsoft has such a great interest in these companies.

    This is déjà-vu from the 80s/90s when the wireless carriers were battling (beating up) with content provider companies for control of the customer. Remember, you taught me to follow the money trail (who bills the customer) and you will predict the outcome early. This is a great pitch to the wireless companies for stealth marketing of wireless services and outside products while investing in the social networks.

  4. Excellent insight. So are you suggesting that in order to achieve ROI, the licensees of *very expensive* spectrum must put up their walled garden unless apps providers (including the Skype voice services) negotiate some sort of revenue sharing formula? What other option is there for the traditional mobile operator?

  5. I think that the walled garden model is done.

    The question is will regulators permit the carriers’ investment in spectrum and cap ex be diminished by this scenario. The technology and innovation curves favor Web 2.0 style, open API, collaborative applications.

    This is not the realm that the carriers have lived.

  6. Wow – Great response to this article. My inbox is buzzing. I will write a follow-up article, to be published on Monday, that will address the trend on of the questions and comments I have gotten.

  7. Mike

    Just passing by.Btw, your website have great content!

    _________________________________

  8. Pingback: Cheers and Jeers for Mobile without Numbers « Mobileman

  9. Pingback: Shared iDiz » Posts » The status quo is no go.

  10. I’ve dreamed about being able to place voice calls using e-mail addresses as the primary point of contact. This article made me realize that the wireless industry is not that far of from this reality from a technical standpoint, but that the incumbant carriers will likely stifle the innovation in order to maintain control. Great read! Thanks!

  11. Jonas

    Interesting article. There is no doubt that the software based service providers like Skype and others will radically change the eco system of the mobile industry. The trend is so powerfull and disruptive that any preventive measures taken by the operators will only be temporary.

    However, the phone numbers are here to stay, I think, and will continue to serve as a convenient link to the old 1.0 mobile world.

    The winners will be those 2.o players who succesfully manage to seamlessly integrate the large installed base of mobile users and phone numbers with VoIP and Social networking services. The trick here is to seperate the phone number from the mobile network provider. In addition to Skype you might want to check out new players like Truphone.com and Vopium.com who are leading this change.

  12. Thanks for the wonderful insights on this upcoming scenario likely to unfold in the days to come.

  13. Greg Scott

    You assume that a carrier will be required.
    The future will allow you to connect to multiple mesh networks to accomplish a connection to a friend.
    The femtocell hubs of the next generation will permit this and other inter-net platforms.
    Greg