A Changing Mobile World at MWC
Cost cuts and travel bans have thinned crowds at the Mobile World Congress (MWC) in Barcelona this year. So those braving the uncharacteristically drab weather in the Catalonian capital really mean business—only it’s quite a different business from a few years ago.
With the heady days of double-digit subscriber growth now just a memory in most developed markets, operators can no longer rely on new customers for revenue growth. And price competition has long been chipping away at the average revenue per user from voice calls.
To cope with these problems, many operators have invested in third-generation (3G) mobile networks which allow you to do everything from watching videos to updating your Facebook page on your phone.
These data applications represent a big opportunity for the mobile phone companies, but also pose two important challenges.
The first is to maximize the profitability of data services; the second is to ultimately provide them at a speed which matches wire-line, so users get the same experience on their mobile as they would get on their home broadband connection. It turns out that Cisco can help with both issues.
When it comes to maximizing profitability—or ‘monetization’, to use the MWC argot—it helps to know exactly what the data on your network is so that you can charge for it appropriately.
Users might be happy paying more for video or music file downloads, for example, than they would for mobile e-mail. But making the most of this business opportunity requires a network that can distinguish between a bit that belongs to a video and a bit that belongs to an e-mail.
TDM networks, of the kind traditionally used in the mobile industry, cannot do this easily. Cisco IP Next-Generation Networks can, and last year the company’s engagement with the mobile industry moved up a gear with the acquisition of Starent Networks.
Not only is Starent firmly established as a mobile IP network core supplier, but it is also practically the only company in the world that offers a proven migration path from 3G to 4G—the standard that will finally bring gigabit speeds to the mobile world—over IP, solving operators’ second challenge.
“With the Starent acquisition we are now really well positioned,” says Sameer Padhye, Senior Vice President of the Worldwide Service Provider Line of Business. “We can contribute to the revenue side of an operator’s business, whereas before a lot of our products were seen as an added cost.”
Add Starent’s IP network core expertise to Cisco’s capabilities in the data center and in customer premises equipment (through Scientific Atlanta and Linksys), and you get a complete end-to-end IP-based portfolio for the mobile industry—which is something operators seem pretty keen on.
Cisco customer meetings have more than doubled on the level of 2009, says marketing manager Jeff Steinberg, and the number of executive briefing center events is up 75 percent, Kevin Petschow of the corporate communications team tells me.
But perhaps even more significant than the quantity is the quality of conversations that Cisco is now having with customers. Says Padhye: “Now we are able to contribute benefits, it’s a board-level discussion… it’s a partnership approach.”