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Thursday, December 18, 2008

"Third-party pays" mobile data

One of the themes that I've started to explore recently is where someone other than the end user pays for mobile data access.

We're all familiar with this is when we use "free" WiFi in hotels or cafes - the venue owner picks up the bill, or a conference organiser.

I also saw a very good press release yesterday from mBlox, talking about the need for content providers to pick up the tab for connectivity - he makes an analogy with the sender of a letter or parcel paying for the stamp (sender pays), rather than than the receiver. mBlox's chairman, Andrew Bud, is a regular speaker at events like Telco 2.0 and articulates the need for this type of model very well.

However, my view is that the content-oriented "sender pays" model is just a narrow slice of a much broader opportunity for sponsored / third-party data. In general, mBlox and Andrew Bud tend to be very focused on "packaged" mobile transactions and content - downloadable videos, premium SMS, MMS, ringtones, songs, games and so on.

While these are undoubtedly important, in my view access to more open Internet mobile services will vastly eclipse that segment over time. Packaged content should grow, but I expect that ultimate demand is tiny compared with that for mobile access to FaceBook, Google search and maps, general web access, VoIP, corporate remote access and assorted web-based applications and widgets.

There needs to be a generic mechanism for mobile data - on phones, PCs and other devices - to be sold on a wholesale basis by mobile operators.

There needs to be a "free HSPA" capability to mirror "free WiFi" for notebook users at conferences (or across whole cities).

There needs to be a way to get free mobile web access paid for by advertisers.

There needs to be an mechanism that spans multiple operators and roaming, so for example a local tourist authority could sponsor free access by visitors to websites of local attractions and restaurants on their phones.

There needs to be a way for a new social network site to offer free mobile access, across all operators, to new users for their first month.

There needs to be a way that I can get a "global subscription" to the FT on my mobile device, without worrying about one-off charges.

There needs to be a way to be a way for the government to provide free mobile data for unemployed citizens without PCs, so they can check recruitment websites on their phones.

There needs to be a way to buy a mobile backup service, without the "sender" (ie the user) paying extra.

At the moment, the way to do this is typically a bit of a cludge - perhaps using a separate mobile APN, or trying to use content-based billing based on IP addresses or "application type". Or more usually, just giving people a flatrate bundle. But not everyone has flatrate data, and in any case it doesn't cover roaming, or multi-operator deals. As usual, the SIM gets in the way, which means at the moment it's easier to do all these things via WiFi instead of the cellular connection.

EDIT: Ideally, there also needs to be a way for the service/content provider to choose between different data wholesale products. So there should be different per-MB costs for fast vs slow access, extra-low latency connections for games or VoIP, options for peak vs. off-peak times of access, differential rates for macro vs. femto vs. WiFi access, and so on.

So while I agree with mBlox that "sender-pays" is a useful concept, let's not over-focus on a name and vision that it solely geared around delivery of packaged mobile content. My over-riding belief is that new business models for general mobile access and communication is always more important than mere content, and it's certainly the case here.

I cover sponsored / third-party pays data in the recently-published Disruptive Analysis Mobile Broadband Computing report.

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