Jeff Zucker of NBC Universal coined the prescient expression “Trading analogue dollars for digital pennies” in 2008 to describe the huge gap that he was observing between the lucrative promises of online and digital advertising and the reality of the meager revenues that it was in fact producing. Could the same be true of the Internet of Things (IoT) revolution? Are we trading the hundreds of dollars that we are generating from mobile users for the pennies that providers get for connecting “things”?
Connecting the 50 billion projected devices, or things, to the Internet is the cornerstone of the Internet of Things. Given the challenges of remoteness, mobility and the cost of wiring up these devices, many of these connections will be made over mobile networks. In fact, Beecham Research estimates that the number of cellular machine-to-machine connections will grow to 1 billion by 2020, up from 172 million in 2013. It is no wonder that the mobile operators are salivating at the prospect of all this new revenue to be earned from connecting inanimate objects. This windfall is especially at a time when there traditional mobile business is under attack. Changes in voice usage and bundled minutes are causing voice revenues to decline and data revenues are under attack from Wi-Fi connections and over-the-top providers (see The Mobile Paradox). Read More »
Tags: internet of things, M2M, mobile, monetization, revenues
In a mobile application ecosystem dominated by Over-the-Top (OTT) providers, mobile operators need to exploit new business models in ways to create value with them. One example of a Monetization use case promising a new business model is Sponsored Data. An early proponent among operators has been AT&T, who defines Sponsored Data as: “a service that enables companies to sponsor the data usage for specific content on behalf of eligible AT&T wireless customers [who] can browse, stream and enjoy content … without impacting their monthly data plan allowance.”
A year after launch, AT&T spokespersons remain upbeat about its Sponsored Data program, despite only signing up about 10 content partners. What are some of the services enabled? Liberty Mutual insurance customers, for example, can send their smartphone photos from accident claims up to the Liberty Mutual cloud, without incurring data charges from AT&T. Kingsoft gives users of its mobile office software sponsored access to file access and transfers. AT&T states that is sees great interest in Sponsored Data from a variety of developers and content owners, but that such a service based on a new business model will take time to establish itself.
Waving the Green Flag
Other operators are experimenting with the Sponsored Data business model. Customers of T-Mobile’s Music Freedom service can now stream all the music they want from the most popular streaming services without it counting against their 4G LTE data limits. Other operators offer similar sponsored Internet radio services such as Spotify and Pandora, or social media applications like Facebook. Read More »
Tags: AT&T, Cisco Virtualized Mobile Internet, Cisco Virtualized Packet Core, connected car, EPC, Liberty Mutual, LTE, mobile data, monetization, ott, packet core, policy, Sponsored Data, T-mobile
Remember the halcyon days of the Dot-Com era? A frothy stock market, venture capital money flowing like water and famous sock puppets characterized the exuberance of the day. One company (Boo.com) spent $188 million in just six months to create an online fashion store. And 16 start-ups spent over $2 million each for a 30 second advertising slot during Superbowl XXXIV to crow of their existence. But, all of the money didn’t matter – the mantra was all about capturing “eyeballs.”
The business theory of the day was that if you could get people to your website (the eyeballs) then somehow the money would come gushing in. You were a heretic if you questioned how that would happen. Eyeballs were a very monetizable item, so the more of them the better. Of course, we know what happened. The Dot-Com era came to a Read More »
Tags: advertising, Big Data, Cisco, dot-com, internet of things, monetization, Smart Cities, wifi
I have just returned from a very interesting and jammed-packed week at Mobile World Congress 2015 in Barcelona. A record 93,000 plus people are estimated to have attended this year’s premier technology festival. Much has changed in the industry over the last year since I reported my observations of MWC 2014. However, what is most remarkable is how the boundaries of mobility continue to expand and morph – everything now seems to be mobile? As such, the show offers a fascinating glimpse into the future of technology and the major social and business shifts that we can expect in the next few years.
The following are my personal observations and extrapolations from the show Read More »
Tags: 5G, business models, Cisco, IoT, mobile, mobile data, mobile devices, mobile networks, mobile operators, mobile world congress, mobility, monetization, MWC 2015, NFV, service providers, small cells, wi-fi
One of the first lessons that every economics student is taught is “supply and demand” – the fundamental economic principle that price goes up with increased demand. Yet we are witnessing the opposite to these age old principles in the mobile business. Despite phenomenal demand for mobility services, the mobile operators that provide these services are engaged in a fierce price war.
Faster, sleeker, and more powerful mobile devices, running countless of applications have transformed businesses and our personal lives. The insatiable demand for mobile devices Read More »
Tags: ARPU, Cisco, Cisco VNI, MNO, mobile, mobility, monetization, ott, pricing, wifi