A Look at Consumer Satisfaction with Broadband

One can get a good argument about whether consumer satisfaction with any communications or entertainment video service is strongly related to customer loyalty.

The conventional wisdom is that "happy" customers are "loyal" customers, but that always has been tough to demonstrate in the consumer communications market.

Churn rates for "satisfied" customers often do not seem all that different from the behavior of demonstrably "unhappy" customers, though few would argue there is no relationship between "satisfaction" and "loyalty."

Some new analysis by Parks Associates illustrates the issue. As it turns out, "satisfaction" with various broadband access services is relatively comparable across platforms and networks. Fiber to the home fares better, satellite broadband and fixed broadband a bit worse than either cable modem service or digital subscriber line.

But the differences are not quite as pronounced as one might think. With cable modem and DSL service as the benchmark, FTTH does a bit better and wireless a bit worse. But FTTH, while "above average," and wireless "a bit below average," are fairly close to the baseline.

At the margin, FTTH customers are a bit more happy, wireless customers a bit less happy. But the link between satisfaction and churn is not precise, nor linear. Other surveys tend to show that overall consumer satisfaction with most entertainment video, mobile and fixed line services is reasonable, but not typically among the products consumers routinely say they are most happy with.

Grumbling and grousing just comes with the territory, it seems.

Permanent Changes in Consumer Behavior and Mobility Business?

The economic crisis "permanently" changed how consumers, enterprises and network builders approach everything, says Christopher Collins, Yankee Group analyst. The changes might not be helpful to communications service providers, if consumers do as they have told Yankee Group they will.

About 66 percent of consumers claim they will spend less in 2010 than in 2009, while 25 percent expect to cancel or spend less for core connectivity services.

About 20 percent of business executives also said they had undertaken “severe reductions” in their technology investments.

But one has to be especially careful at times of transition, which by definition lead to changes of sentiment and behavior. And sentiment seems to be improving.

But some of Yankee Group's 2010 predictions are grounded in a continuation of underlying trends.

The number of mobile-only households in the United States doubled in 2009, to 30 percent of homes, says Collins.

And cord-cutting is rapidly expanding to mobile broadband at a rate faster than anticipated, he notes. In fact, Collins estimates that 33 percent of U.K. homes will be "mobile only" for their broadband connections by Deember 2010. That could happen elsewhere, he suggests.

Prepaid payment plans, lower prices and higher speeds might encourage mobile broadband substitution, he says. "These factors will combine to make mobile broadband a more realistic alternative to land-line broadband for the most price-conscious and quality-insensitive consumers," he says.

Another trend just might have the effect of slowing smartphone adoption, though. Yankee believes mobile service providers cannot afford the increased customer acquisition costs subsidized phones represent.

But should that happen, and users start to pay the full costs of their devices, upgrades will slow and churn will lessen. To forestall the slowing of smartphone uptake, which is key to increasing data revenues, service providers could resort to payment plans for phone purchases.

Also, the Yankee Group believes the netbook will face disappointing sales in 2010, something of a reversal of 2009 trends. NPD DisplaySearch reports that year over year netbook sales grew by almost 270 percent through the second quarter of 2009.

Collins notes that netbook return rates are high, running 30 percent. Collins suggests that is a result of user unhappiness with performance, form factor or other issues. The other issue is that prices of notebooks have dropped. The Yankee Group assumes notebooks will take on similar netbook form factors but with more utility than netbooks offer.

Consumers also drive more than 50 percent of enterprise smartphone purchases, Yankee Group predicts. The largest beneficiary of this trend will be Apple, as the iPhone continues to cross over into the business world. The biggest loser will be Microsoft, as Windows Mobile loses mindshare among both business decision-makers and employees.

Analysts also believe the Chrome OS also will start to power a new class of devices and that cloud computing will drive demand for new enterprise management tools.

Huawei will continue to nab LTE deals from Ericsson, Alcatel-Lucent and Nokia Siemens Networks on their home turf, and Yankee Group predicts that Huawei will expand on its success by winning a major LTE deal in North America in 2010.

Telcos also will start to leverage reliability concerns about cloud computing to win business. As owners of network assets, they can provide enterprises with secure VPN links between private and public cloud environments, plus sophisticated management portals to monitor service performance, Yankee Group believes.

That’s why telcos including BT, Deutsche Telekom, NTT, Orange Business Services and SingTel are leading candidates to become trusted cloud intermediaries.

The coming year also will raise awareness that innovation increasingly requires partnerships, as venture capital investment in hardware and networking start-ups is declining. Venture capital funding for networking and equipment start-ups has declined every year since 2000, according to the National Venture Capital Association (NVCA).

In 2000, the venture capital community invested $11.2 billion in networking and equipment sector companies, but in the first three quarters of 2009, that sector saw just $545 million in investment. If they are to remain competitive, suppliers  must revitalize internal research and development.

In 2010, infrastructure sharing (of both active and passive network assets) will become the de facto business model for efficient telcos in both developed and emerging markets. This is not just a matter of economics; regulators are also forcing the practice. And it’s a critical shift for telcos: Competitive differentiation will focus on services, not network reach. Europe is currently a center of activity, but it’s a global trend (e.g., we see this in India, where regulators are eager to improve the economics of connecting rural areas).

Trailblazers in 2009 included Vodafone and Telefónica, which agreed to share network sites in the U.K., Spain, Germany and Ireland, with more countries under discussion for 2010. Meanwhile, Orange and T-Mobile U.K. agreed to merge in 2010 without changing T-Mobile’s existing 3G network-sharing deal with 3 or Orange’s deal with 3 to provide 2G coverage services.

If telcos don’t embrace infrastructure sharing on their own, regulators may force their hand. The European Parliament (EP) recently approved reforms aimed at helping all telecom operators in the EU 27 share incumbents’ access networks on equal terms. If incumbents fail to comply, regulators can force the functional separation of network operations from service divisions (as the EP did in the U.K., and now plans to do in Italy and Poland). Such approaches are in play across the world: New Zealand with Chorus and Singapore with Nucleus Connect are notable examples; Australia is likely to be next.

Also, U.S. network neutrality rules will have a domino effect worldwide. As a result, service providers everywhere will be forced to become more transparent, both in terms of their internal traffic management practices and the ultimate effects those practices have on end-users.

How Will "No Contract" Smartphone Sales Affect Adoption?

What happens to smartphone sales, data plan sales, consumer behavior and mobile service provider marketing if phones cannot be provided at subsidized prices? If sales of smartphones fall, then use of mobile broadband services likely will grow more slowly. So smartphone prices do matter.

Up to this point, mobile phone subsidies have been seen as a “necessary evil” for the development of mobile phone services and have helped kick start the mass market for mobile phone services in many markets around the world. And it would be hard to underestimate the role subsidized handet pricing has had.

Handset subsidies are viewed as a loss leader strategy, a means for bringing new subscribers onboard, or encouraging existing subscribers to churn away from their existing network and onto a competitor’s.

But investors do not like the practice, as it puts pressure on service provider cash flow. Regulators do not seem to like the practice because subsidies mean contracts, and contracts lessen consumer ability to change carriers.

Global smartphone volumes will represent 14 per cent of total mobile devices sales in 2009, growing by 23.6 per cent from 2008 and to 38 per cent by 2013, say analysts at Gartner.

Smartphone prices are falling as shipment volumes increase, and a new study from ABI Research finds that while in 2007 only 18 percent of smartphones on offer cost under $200 retail, that percentage has already grown to 27 percent in 2009. By 2014, say the firm’s forecasts, 45 percent of the smartphones shipped that year will be priced below $200.

“Manufacturers see consumers increasingly demanding smartphones, because of their better understanding of the value that a smartphone delivers,” says mobile devices practice director Kevin Burden.

The result: more and more smartphones and conventional phones are priced in similar ranges. According to ABI Research, by far the greatest increase in smartphone shipment volumes over the next five years will be found in the $100-200 price range.

But what happens if new government regulations bar the practice of phone subsidies, and consumers must pay full retail price for new high-end models? Less buying.

On the other hand, there will be more buying of cheaper models. That doesn't necessarily mean smartphone sales overall will plunge, but it will be far more difficult to sell massive quantities of new high-end devices, as few consumers have shown any willingness to spend $600 for unlocked devices.

Of course, there are other possibilities. Perhaps some providers will be able to create new payment models, such as offering installment plans for purchase of new high-end devices. A few might consider other subsidy programs that serve up ads and default applications in exchange for lower-cost devices.

Advantage also will be gained by manufacturers that can wring out costs, offering high-performance devices that just cost less to begin with.

What seems clear, though, is that mandated sales of full price devices, sold without contracts, will have massive impact on the take rate for high-end devices.

Video Represents 99% of Consumer Information Consumption

Reduced to bytes, U.S. consumers in 2008 imposed an information transfer "load" of about 34 gigabytes a day, say Roger E. Bohn, director, and James E. Short, research direction of the Global Information Industry Center at the University of California, San Diego. That works out to about seven DVDs worth of data a day.

And that isn't even the most-significant potential implication. We are used to hearing about consumption of media or information in terms of "time," such as hours consumed each day. But Bohn and Short also look at information flows in terms of "bandwidth."

If one looks at consumption based on the "hours of use," video accounts for possibly half of total daily consumption.

If one looks at the flows in terms of compressed bytes, or actual bandwidth required to deliver the information, then video represents 99 percent of the flow volume.

That has huge implications for the design of any nation's communications and "broadcasting" networks. To the extent that virtually all information now is coded in digital form, a shift of consumption modes (from watching linear satellite, cable or telco TV to Internet delivery) can have huge effects.

Recall that video bits now represent 99 percent of bandwidth load. But also note that most of that load is delivered in the most-efficient way possible, by multicasting a single copy of any piece of information to every potential consumer all at once. It requires no more bandwidth to serve up an event watched by 500 million people than one person.

That is why video and audio networks historically have been designed as "mutlicast" networks. They are the most effiecient way of delivering high-bandwidth information.

If more video starts to move to Internet delivery, the bandwidth requirements literally explode. To deliver one identical piece of content to 500 million Internet users requires 500 million times as much bandwidth as the "old" multicast method, in at least the access link. If network architects are ruthlessly efficient and can cache such content at the edge of the network, wide area bandwidth consumption is reduced and the new load is seen primarily on the access networks.

All of this suggests a rational reason for maintaining "multicast" video entertainment networks, and not shifting all consumption to unicast Internet delivery. It is extremely inefficient and wasteful of network resources. To the extent that much "on demand" viewing of popular professional content can be satisifed by local storage (digital video recorders), this should be done.

On-demand viewing of YouTube content is harder to rationalize in that manner. For the same reason, local storage of computer games, where possible, makes sense. Interactive, "live" gaming does not allow such offloading, and will contribute hugely to Internet bandwidth demand, just as viewing of YouTube videos is doing.

“Information," representing flows of data delivered to people from 20 sources, is likely to be much higher the next time the researchers replicate the study, because television, which accounts for nearly half of total consumption, now has shifted from analog NTSC to high-definition, which imposes a greater information load.

Television consumption represents about 41 percent of the daily consumption, but computer and video games represent 55 percent of the flow. Add ratio and TV and those two sources represent 61 percent of the flow.

But there is another important implication: the researchers counted "compressed" information, or "bandwidth," in addition to more-familiar metrics such as hours of consumption.

Looked at in this way, the researchers say, "led to a big surprise." In fact, only three activities--television, computer games and movies account for 99 percent of the flow. All other sources, including books, mobile or fixed voice, newspapers, radio or music, contribute only one percent of total load.

The researches also point out that they count bytes as part of the  "information flow" only when users actually consume the information. Data stored on hard drives or TV or radio signals not being watched or listened to does not count in the research methodology.

The researchers also point out that if “personal conversation” is considered a source of information, then high-quality "tele-presence" applications that actually mimic talking to a person in the same room would require about 100 Mbps worth of communications load.

Three hours of personal conversation a day at this bandwidth would be 135 gigabytes of information, about 400 percent more than today's average consumption.

Will Firefox Mobile Displace App Stores?

Right now mobile apps are hard to develop if what one wants is access to the widest range of browser-equipped smartphones and application stores. Basically, each application has to be re-coded for each mobile operating system.

Mozilla.org thinks it has a better solution: write apps directly for the Firefox mobile browser, using HTML5, CSS and JavaScript, and be done with it.

Firefox Mobile (known informally as "Fennec") will launch for Nokia's N900 handset "soon," with versions for Windows Mobile and Android planned for 2010. In developing its new mobile browser, Mozilla.org is trying to replicate and preserve as much of the current user experience as possible, a sore point with some users.

Firefox for mmobile phones will include "The Awesome Bar" that searches a user's history, bookmarks and tags, allowing users to go to their favorite sites instantly by auto-completing entries.

Firefox preferences, history, and bookmarks can be shared between a desktop and mobile, providing a convenient way to sync important elements of the Web experience. The mobile browser will be continually synchronised with the PC.

If a user starts typing a specific address, and the user has visited that site before, the site will pop up, Mozilla.org says.

Tabs will allow users to browse multiple sites at once and one-touch bookmarking will allow users to quickly organize and add new sites. If a user is working on a PC with multiple tabs open, and then wants to resume on a mobile, the tabs will be available on Firefox Mobile when the user opens it up.

Also, users will be able to "add on" new widgets for the browser itself, something difficult-to-impossible to do at the moment.

For developers, the ability to create apps directly for the Firefox browser will simplify the development process, if not the business model. Developers who simply want people to use an applicatons will find the browser model quite attractive.

Developers who want to create a "for fee" business model might have to stick with the application stores, though, as the billing process will be an issue.

Writing for Firefox should make easier the task of integrating geolocation, camera and calling features of the phone.

Firefox Mobile will offer the fastest Javascript engine of any mobile browser, Mozilla.org says.

"Anyone who knows JavaScript and HTML can develop a great app without having to learn a specific mobile platform," says Jay Sullivan, Mozilla.org VP.

Browser Versus App: Which is Best for Mobile Developers?

Developers can just about flip a coin when trying to decide whether to write an app that runs directly in a browser compared to an application a user has to download from an application store.

According to a survey by Compete.com,. about half the time, Apple iPhone users are running apps rather than using their browsers.

So far, Android users are spending more time on their browsers than using apps, but that likely will change as more apps are made available.

Users of other smartphones tend to use their browsers more than downloaded apps.

40% Will Increase Email, Text Message Marketing Campaigns, Survey Finds

About 40 percent of email marketers surveyed in November 2009 by Silverpop say they will increase their email marketing budgets in 2010, while 47 percent said their budgets would stay the same.

In the coming year, more than half of survey respondents (52 percent) said increasing customer loyalty was a top email marketing goal.

But incremental revenue clearly is the top driver. Overall, 51 percent of respondents want to drive incremental revenue with their email program, while 65 percent of those with larger email budgets say that's their top goal in 2010.

"Inbox clutter" remains an issue for 37percent of respondents. That's an issue, but nothing like the opt in issues faced by users of text messaging campaigns, whose users often must pay "by the message" to receive them. Cluttering up an inbox is one thing, charging someone to receive your marketing message is far worse.

And social media is growing in important. About 84 percent or marketers plan to include social media into their email programs in the coming year, while 38 percent will add text messaging.

Marketers enjoying budget increases are even more likely to add these to their programs; About 89 percent of marketers will growing budgets say they will incorporate social media,  while 44 percent of respondents with growing budgets say they will add text message campaigns.

Email linked to popular social networks will work fine for PC-based users, but text messaging will be needed to reach mobile users on the go.

Who Will Lead Mobile Internet Industry?

If there is one enduring theme in the information and communications technology businesses, it is that the industry's leaders in one era are displaced by new leaders in the subsequent era.

That suggests we will see a new list of industry leaders in the "mobile Internet" era that is coming.

The main thing right now is not to worry too much about where we set the boundaries of the various computing waves.

The point is that a new wave is coming. As shocking as the notion might seem, the names that lead the Internet computing wave might not be on the list of "mobile Internet computing." Nothing is foreordained, though. Just because no leader has made a transition from one era to the next does not mean contestants will not try their best and hardest to make history by managing the transition.

Android Gaining Ground on iPhone as App Platform

Android seems to be emerging rather quickly as a "number two" choice for mobile device application development, a new analysis by comScore suggests.

“With handsets on multiple carriers, from multiple manufacturers, and numerous Android device models expected to be in the U.S. market by January, the Android platform is rapidly shaking up the smartphone market,” says Mark Donovan, comScore SVP. “While iPhone continues to set the bar with its App Store and passionate user base, and RIM remains the leader among the business set, Android is clearly gaining momentum among developers and consumers.”

Of those American consumers in the market for a smartphone, 17 percent are considering the purchase of an Android-supported device in next three months, compared to 20 percent indicating they plan to purchase an iPhone.

Although Android’s share of the smartphone market is relatively small, it has quickly doubled in the past year to 3.5 percent in October 2009.

An analysis of mobile media consumption on smartphones suggests that users of both Apple and Android-supported devices are more likely to engage with mobile media than an average smartphone user.

Users of the Apple iPhone were most likely to consume mobile media, with 94 percent of users doing so in September 2009, while 92 percent of Android device users, predominantly T-Mobile G1 users, engaged in mobile media activities, 12 percentage points higher than an average smartphone user and far higher than the 26 percent use of mobile media by feature phone users.

Apple and Android users were equally likely to engage with news using their browser and are nearly identical in their mobile application engagement. About 80 percent of both iPhone and Android users say they access news using their device browsers. About 83 percent of Apple users and 82 percent of Android users say they use downloaded apps.

Some 58 percent of iPhone users say they use mobile social networking, compared to 52 percent of Android users. About 43 percent of iPhone users use instant messaging while 46 percent of Android users say they use mobile IM.

Email is an area where Android and iPhone behavior is distinct. Apple iPhone users (87 percent) are far more likely to use email on their devices than Android users (63 percent).

Google’s Android platform has continued to gain awareness among U.S. consumers. In August 2009, just 22 percent of mobile users had heard of the Android, while in November 2009 this figure had reached 37 percent, largely prompted by the Verizon Droid advertising campaign launched in the fall.

The comScore study found that not only is general awareness increasing about Android, but intent to purchase an Android-supported device is also increasing among mobile phone users.

When mobile users were asked in November 2009 which phone they planned to buy in the next three months, 17 percent of respondents in the market for a new smartphone said they planned to purchase an Android-supported device, with 8 percent of those planning to purchase a Verizon Droid, compared to 20 percent of respondents who said they planned to purchase an iPhone during that same time period.

In comparison, when survey respondents answered this same question in August 2009, only seven percent indicated an intent to purchase either the T-Mobile G1 or the T-Mobile MyTouch -- which were the only Android-supported phones available at the time -- while 21 percent of respondents planned to purchase an iPhone in the next three months.

U.S. Mobile Handset Sales to Double in 2010?

Although 2009 was not the best year for mobile device sales most places in the world, the United States was a rather salient exception. But 2010 will be an even-better year for U.S. mobile device sales, says TNS. In fact, moble phone sales could double in 2010.

About 53 percent of American respondents and 55 percent of Canadian respondents say they plan to buy a mobile phone in the next six months, up from just 24 percent of U.S. respondents a year ago and 19 percent of Canadian respondents.

Touchscreen phones are set to be the big winners, with 29 percent of U.S. consumers and 28 percent of Canadian respondents saying they will buy one as their next phone.

Mobiles with Qwerty keyboards are also rising in popularity, with 23 percent of U.S. respondents indicating they will buy such a device, and 19 percent of  Canadians.

But there are some issues.  TNS’ research shows that consumers find it hard to distinguish one device from another. Also, 27 percent of Amercian consumers and 29 percent of Canadians consumers say "ease of use" problems as preventing them from using some of the new mobile services offered.

Another mobile device that stands to do well in 2010 is the netbook. About 19 percent of American consumers say they are likely to buy one in the next six months, compared to 19 percent for larger notebooks and only five percent for desktop PC’s.

In Canada, about 20 percent of consumers say they are likely to buy a netbook, 22 percent a notebook and five percent a desktop machine.

TNS studied 24,000 consumers in 35 markets to develop its findings.

Have Smartphones Surpassed TV as a News/Information Channel?

The mobile phone has become an increasingly prevalent channel for Americans to receive news and information, in fact surpassing television in terms of importance, says Synovate.

About 35 percent of U.S. survey respondents say they cannot live without their mobile phones. Compare that to the 34 percent of U.S. respondents who said they couldn't live without TV.

There's your shocker: mobile phones now have become more important than television.

But the Internet clearly is the number-one source for news and information. Fully 58 percent of Americans say they can't live without the Internet, the highest response across all 11 national markets surveyed by Synovate.

One way of evaluating importance is to compare the monthly recurring cost of using a multi-channel video subscription compared to a smartphone subscription. Most smartphone fees, for a single user, now run in the $75 to $100 a month range. The typical video subscription likewise runs in the $75 to $100 range.

To be sure, a single video subscription can be shared among members of a household, so the value per person is different. But many households also use mobile family plans, which likewise changes the cost-per-user.

The comparisons are most direct for a single-user household, where it might be argued the value of a mobile and TV are about equal. In a four-person household, one might argue the mobile is more important as per-person spending is something like $50 a person, whereas mobility is about $80 per person.

Mobile Internet Wave Coming: Who Wins?

If a "fifth wave" of computing is about to break, as analysts at Morgan Stanley clearly believe, the issue is who the wave's new winners and leaders will be.

The history of computing suggests that the companies that lead the prior wave do not lead the new wave.

Morgan Stanley seems to think that as social networking and mobility combine, a company such as Facebook could wind up in the "Mobile Internet Computing" leaders category.

Morgan Stanley also is high on Apple making the cut, as well. Should Apple pull that off, it would make history.

Verizon Gives Fixed, Mobile High-Speed Internet Access Customers Free Public Wi-Fi

Though it has not extended the offer to its smartphone users, Verizon Wireless has given some of its fixed broadband access customers (those on plans supporting a minimum of 3 Mbps in the downstream direction) and mobile broadband customers "no incremental cost" access to about 10,000 public Wi-Fi hotspots in the United States.

Verizon Wi-Fi is available in locations across the United States, including airports, bookstores, coffee shops, hotels and other public locations. The service is also available at locations in Canada and Mexico.

The new feature is available to mobile broadband customers using Verizon Wi-Fi supported devices, including the Mobile Broadband USB modem, PC Card, "ExpressCard," Verizon Wireless MiFi 2200 Intelligent Mobile Hotspot, or a notebook or netbook with "Mobile Broadband Built-In" running Windows 7, 2000, XP or Vista.

When within range of a Verizon Wi-Fi hotspot, customers can use "VZAccess Manager" to connect with a Wi-Fi-enabled notebook or netbook computer. When they are ready to move, but want to remain connected, or if they want the added security of the Verizon Wireless network, customers can simply switch back to Verizon Wireless’ 3G wireless network, which is the largest and most reliable in the country.

To use Verizon Wi-Fi, customers must also have VZAccess Manager version 7.2 or higher installed on their PCs.

Will 2010 be a Turning Point for the Telecommunications Industry?

Will 2010 be a turning point in the telecommunications industry? Maybe, says Mike Cansfield, Forrester Research analyst.

Cansfield argues that the recession has brought a new realism to the sector, forcing telcos to cut costs and adopt better operating practices. Might might argue this trend has been underway for several years, though.

Uncertain economic growth also will weigh on the industry.

But new converged services might explode, as the boundaries between Internet, telecom, voice, data video and applications continues to blur.

Cansfield argues that a major telco will disappear in a merger or go bankrupt in 2010. The merger of T-Mobile and Orange in the United Kingdom, the unsuccessful merger of Bharti Airtel and MTN Group in Africa, and the purchase of HanseNet in Germany by Telefonica are examples.

"Green" initiatives will be back on the telco agenda in a big way, Cansfield believes.

Mobile device wars will renew with extra intensity and the battle for the mobile apps market will begin in earnest. Just as iTunes in conjunction with the iPod changed the music industry and the MP3 device market, so the Apple App Store in conjunction with the iPhone transformed the mobile data and applications market for both consumers and, now, businesses.

The boundaries between "work" technology and "home" technology will continue to blur. Traditionally customers have bought different communications services depending on whether they were at work or at home.

But these distinctions are blurring, Cansfield says. Many of us today work part of our week at home and connect with the office through our own terminals and fall into the trap of dealing with business emails at home in our supposed down time. But this is not a one-way-street — hence the high number of personal SMS and Twitter messages sent from the workplace.

Net neutrality will be a major issue in 2010, because the evolution of stable and sustainable revenue models for the entire ecosystem is at stake, though most for network service providers.

Also, 2010 will be the year that many governments will recognize that broadband connectivity is essential for economic competitiveness, the delivery of public services, and an inclusive society, and they will step up to the plate to close the digital divide, Cansfield argues.

All of us likely have opinions about the importance of 2010. I suspect some of us really believe 2010 will not be especially noteworthy in terms of marking a turning point in the telecommunications business, but only because the underlying changes are irresistible forces not dependent on economic conditions, government regulations or industry consolidation.

The business is changing in profound ways because end user needs and interests, provider business models and powerful technology trends are profoundly aligned. Nothing is going to stop those changes.

Surprise, Surprise: Mobile Ops Now See Google as a Partner

Mobile service providers seem to have reached new conclusions about their role in the future mobile ecosystem, Nokia Siemens Networks says.

The single greatest change of business environment is that “the boundary between mobile telecoms and the Internet has all but disappeared,” says Frederic Astier, Nokia Siemens Networks head of customer operations marketing.

So what does that imply about the relationship between network service providers, application providers and end users?

“This study tells us that telecoms operators increasingly see their value, and competitive differentiation, in increasing customer satisfaction through improving network quality, while acting as a content broker for social networks, mobile app stores, TV and voice over IP services," Astier says.

Where the old business model was tight integration of network capability and applications, the new world features an more-open environment where network services and features are sold to third parties who create and deliver services, applications and features to end users.

While voice calls remain at the core of their business, about 78 percent said they plan to open their network as an intelligent bit pipe for new solutions, by while 69 percent said they intend to bundle voice with other content.

Moving away from the walled garden approach of the traditional telecom model, they are embracing two-sided business models by acting as conduits between third-party applications and content developers and the end users.

In that regard, there seems to have been a bit of a shift in attitudes towards application providers such as Google, which now is seen less as a disruptive threat and more as a partner.

The study involved one-to-one interviews with the business leaders of 70 communications service providers from 42 countries, says Nokia Siemens Networks. Its aim was to provide a comprehensive overview of these telecoms operators’ business needs through 2012.