Mobile social platforms help telcos up retention, revenue

SINGAPORE--It is not enough for operators to simply provide access to popular Web services such as Facebook, Twitter and Google as this will not lead to revenue growth beyond data traffic to these sites. Rather, Asia-Pacific telcos need to "be brave" and look to create a mobile-based social platform for their users to increase stickiness and boost dwindling average revenue per user (ARPU).

That was the call by Michael Yin, CEO of Mozat, a local company founded in 2002 which specializes in designing and marketing mobile social networks for mobile carriers and service providers. He told ZDNet Asia in an interview Tuesday that many operators today are simply offering users access to services they frequent such as Facebook and Twitter, but this is self-limiting and relegates operators to being just "dumb pipe" providers.

In order to increase customer loyalty and interactivity, telcos will need to seriously consider developing their own mobile social networking platform that encompasses services such as instant messaging (IM), and that allow users to post messages and pictures on popular sites such as Facebook, as well as social games for in-app monetization opportunities, Yin said.

"Operators need to step out of their ordinary role [of providing telephony and data access], and recognize that they can do more than [play second fiddle] to popular Web services and give people what they want," he said.

As such, he lauded offerings such as the Mozat platform which he suggested could prove useful in not just increasing revenue from new, data-based avenues but also from existing core services such as voice, short message service (SMS) and ringback tone.

By incorporating all the services within one application, users can have a seamless experience and avoid having to multitask and toggle between various applications such as Whatsapp for IM, Twitter for social feeds and individual social games apps, for example, he noted. This is particularly handy for lower-end mobile handsets that do not have the compute power to juggle several apps at the same time, he added.

In terms of monetization, operators have several avenues to pursue, Yin pointed out. First, an operator can simply go for a subscription-based service that bundles data access with services the operator chooses to provide to consumers. Alternatively, carriers can pursue growing ARPU via sales of virtual goods through social games, or they can choose to do a hybrid of subscription and in-app purchases, he said.

According to Yin, one of Mozat's mobile carrier customers launched the app to all its users spanning five mobile platforms--Java, Symbian, Android, BlackBerry and iOS. The client clocked "about six times returns on investment (ROI)" in the span of two months after deploying the Mozat mobile social network tool, he said, adding that this figure was based on the assumption that US$1 million was spent on advertising and it generated US$2 per subscriber per month. He declined to name the customer due to confidentiality.

An industry analyst ZDNet Asia spoke to earlier corroborated what Yin pointed out. Daryl Chiam, principal analyst at Canalys, said it was no longer a matter of simply pre-bundling a social networking client on to the device. These social networking features and capabilities must be well integrated into the device user experience, such as a single sign-on to eliminate the need for repeated logins.

Challenges from "most advanced operators"
However, changing mindsets would be the most challenging task Mozat is likely to face in promoting its whitebox mobile social platform, Yin admitted.

Classifying telcos in Asia-Pacific into three groups--"most advanced, strong, and most ambitious and innovative"--he predicted that the toughest demographic to break into would be the "most advanced" group. This is because operators in this group are likely to prefer building their own platforms from scratch, or are "content to offer what customers want" without looking beyond that, the executive explained.

That said, with Indonesia's Telkomsel and Philippines' Globe Telecom either deploying or about to deploy Mozat-based mobile social platforms, Yin noted that he was confident others would soon follow suit, including Singapore's SingTel, which he said belongs to the "most advanced" group of operators.

"Both Telkomsel and Globe Telecom are SingTel subsidiaries, so we already have buy-in from SingTel's affiliates. Whether we will launch our service in Singapore remains to be seen, though," he stated.

He also pointed out that Mozat's revenue growth of 300 percent between 2009 and 2010 was testament to the viability of the company's product and success in the region.