Quocirca's Straight Talking: Say 'no' to walled gardens

Mobile operators need to open up to succeed...

What does the term 'mobile internet' mean to you? Being able to access websites from your laptop when on the road? Using email, calendars and contacts from your PDA? Getting digital information from your mobile phone? Probably a bit of all three and more.

The problem, though, is that the mobile operators have historically taken the view that they are the centre of the universe, and that the only devices and services of importance are the ones they provide you with. This mentality led to the so called 'walled garden' approach of the early days, in which the mobile operators confined mobile access to services within their own portals, and created an impression that the mobile internet was something discrete from the fixed internet.

Looked at from a user perspective, most of us would really rather think of there being just one internet with one universal set of services and offerings that can, when it makes sense, be accessed from any device over any connection.

Email is probably the most obvious example of this. Whilst you might want separate email addresses for personal and business use, the last thing you need is a different set of addresses and inboxes for your mobile device in addition to the ones you already use on the PC. It is for this reason that mobile operators' hosted mailboxes with user@someoperatordomain.com type addresses have not been taken up widely. Mobile email is catching on rapidly but the services becoming popular are those that allow mobile access to our existing mailboxes.

Looked at in terms of 'convergence', we could argue that this is an example of a converged service based on bringing together equivalent services from the fixed and the mobile worlds. For something like email, such convergence avoids complexity, but when the principle is extended to services like movie and music subscriptions, access to online games and premium information sources, we also avoid the situation of the user having to pay twice for essentially the same service - once for fixed and again for mobile.

Of course in reality, there are some challenges in achieving genuine service convergence. Some of these have to do with the practicalities of delivering services over different connection types to different devices. The mobile incarnation of a fixed internet service, for example, will sometimes require a lot more in the way of sophisticated middleware to deal with limited and variable bandwidth, interrupted connections and the constrained display and input capability of handheld devices.

The cost of implementing this clever infrastructure, along with the cost of the mobile networks themselves, then leads us to the second major issue - serving the needs of the commercial vested interests. If an operator has invested heavily in access technology, the last thing it wants is for the technology to be simply used as a way to create passive pipes to other people's services.

If we go back to the beginning, this is the real commercial root of the walled garden mentality that led operators to attempt to reinvent everything and create an alternative self-contained world for their users, all delivered under their own brand. The idea was that this would allow them to maintain complete control of revenues and profits.

Over the last five years, however, most have learned that this selfish approach doesn't work very well. It turned out that operators did not possess the kind of brand leverage they thought they did. As time went on, we therefore saw a move towards partnership-based activity, with the operator often assuming the role of intermediary or delivery channel for established content and service brands - retailers, newspaper and magazine publishers, games publishers and other media companies.

This has created a potential win-win approach in which the content or service partner benefits from the operator's delivery infrastructure and ability to collect payments, and the operator benefits from driving more activity by leveraging recognised brands and more compelling services. That's the theory but the operators are on a journey here and still have a tendency to smother other brands rather than creating effective synergies with them.

Even so, this approach is still somewhat at odds with the converged service concept as the mobile operator still only deals with the mobile incarnation of a service, with the original service provider dealing with its fixed equivalent. From a user perspective, this may not always be what we want. For example, if we subscribe to a magazine primarily for delivery via 'traditional' channels such as print, TV and the fixed internet, it might be desirable for us to arrange for mobile access via the original service provider rather than the mobile operator.

This would allow us to reuse all of our options, preferences and user IDs in the mobile context, with any extra charges incurred for mobile access being dealt with behind the scenes. In practical terms, the operators need to be able to take subscription and billing information from other content and service providers where the mobile aspect is seen as being of secondary importance, and not try to hijack the original customer relationship.

Right now, however, this is a step too far for most mobile operators, partially because of the mechanics but also because of a continuing, strong desire to control that customer relationship. Mobile operators want as much billing as possible to take place through them and for users to regard themselves as primarily their customer, not someone else's. To achieve this, they sometimes introduce a 'value added' mobile element, which sits between the mobile user and the service they really want to get to. This may be justified in some cases but in others, the value is pretty dubious.

An example of this is the recently announced PC-to-mobile instant messaging (IM) service from Vodafone, due to be delivered later in the year in collaboration with Microsoft. Rather than allowing Vodafone users to simply log into their existing MSN (or other mainstream IM) account from their handset, the service will require the user to set up a second IM account with Vodafone and route all traffic through that.

This allows the mobile operator to keep control of (and bill) its customers as they communicate with their MSN buddies. But should users really be asked to use a separate IM handle for when they are mobile? And does the world really need another IM network when we are just beginning to see interoperability between the already established mainstream players?

Looking to the future, the pivot point for contracts, billing, user authentication, customer service and management of preferences and options will vary depending on the type of service and whether access is predominantly via the mobile or some other medium. Service providers therefore need to acknowledge that whilst it makes sense for some services to be managed via the mobile operator, many more will sit more naturally with the original provider. Mobile operators in particular need to be careful as users and other providers of content and services will simply find ways to bypass the complexity they introduce if it does not add significant value.

Ironically, this highlights the threat from the entity most mobile operators are scared of muscling into their territory: Microsoft. Windows Mobile-powered smart phones and PDAs, more than any other flavour of device, come out of the box with an expectation of being plugged directly into generic internet services - email, instant messaging, music, video, ecommerce - rather than their mobile operator controlled variants.

So, by attempting to introduce unnecessary layers of complexity and constraint, do operators risk opening the door to another Microsoft-based monopoly? Unlikely, maybe, but in this particular case, the Microsoft view of the world does seem more in line with broader industry interest, though this is probably just coincidence.

For more on the evolving role of mobile operators in the context of delivering corporate business services, see the Quocirca report entitled Beyond the Bit Pipe, available free of charge from our website.