Ronnie05's Blog

Why Operators have lost the consumer?

Posted in Industry updates, Revenues and Monetization by Manas Ganguly on April 15, 2011

Operators are like dumb pipes, carrying a lot of data and not understanding how to monetize it”

This statement which has become a cliché acquires a new dimension when Illja Laurs, CEO of Getjar says it because of the simple fact that Getjar was the alternate app store to those of the big platform providers that Operators have been banking on to do “things” with the traffic. Laurs states that operators have absolutely no influence over their customers when it comes to where they go on the mobile Web and what they download. Essentially, customers are ignoring the carriers in terms of where to be headed through the mobile web.

Laurs’ testimony is critical considering that he has been instrumental in building a thriving application portal independent of Google.GetJar storefront is handling more than 100 million app downloads a month, which could make it the second most trafficked store on the mobile Internet behind iTunes.GetJar has revenue share and promotion agreements with more than 50 operators globally on its store front. Even with large accounts like Vodafone, Sprint and AT&T, Getjar gets only 10% of its downloads from Operators and the revenue is lower. Meanwhile, GetJar’s direct-to-consumer business is booming to the point that it has almost completely written off the carrier partnership completely.

Quoting Laurs: “Once we realized this wasn’t a fast way to scale, we gave up on it. We still have those deals in place, but we don’t promote the opportunity at all anymore. … We learned that it would take 1000 carrier deals to double our profits. The return on investment is way less than our direct-to-consumer effort.”

No mincing words there…. it says it all.

Reasons for Operators for not being able to do a meaningful lot with their subscribers are as follows

1. Half Measures: Only a handful of operators are fully integrated with Getjar platform. Very few of them took full advantage of the integration opportunities

2. Operators are deeply abhorrent of surrendering ownership of its subscribers to any other stakeholder. They have can network location and presence engines, they can offer carrier billing, they have detailed information on their customers—all potential goldmines for a developer hoping to make its mark. Such data would be goldmines to developers and App Store makers. The catch however remains that while most of the operators swear to open alliances, the fact remains that in terms of sharing customer data and profiling, operators are taking up walled garden approach.

3. There are 200 major wireless carriers worldwide, and they all have different sets of APIs, resulting in an enormous level of fragmentation. If a developer is presented with the opportunity to build a location feature into a single Google API rather than code to 200 disparate APIs, he’ll always choose the former.

Initiatives like the Wholesale Application Community (WAC) and the GSMA’s OneAPI program are trying to address those issues, but regional and business differences between the world’s operators will still leave plenty of room for fragmentation in a supposedly common API framework. It is very sceptical that 200 different carriers can agree on common frameworks.

4. Another fall out of the operator walled garden approach is that Operators are likely to seek exclusive partnerships, which developers won’t be so keen to lock themselves into.

5. Fifth is the mindset problem. Operators are largely clueless when it comes to monetizing non-telecom services. The operators are slowly expanding their vision and expertise beyond the gateways and routers of the network. But according to Laurs, they’re doing it too slowly.

Thus, operators are being marginalized by their customers when it comes to mobile apps and how there’s little hope of getting them back.

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