Indian Mobile Operators are going to spend over $20B for 3G Licenses – What can they do to recover these license fees?

Last week I went to India and the big news was India’s budget deficit is going to be reduced thanks to 3G auctions fetching in excess of Rs 670B with total likely to exceed Rs 1,000B (~ $20B) after WiMax auctions. In a country with an approximate ARPU (average revenue per user) of $4/month and 420M subscribers, how are operators going to pay for it.

Some Misconceptions on 3G

In reading various articles in Indian magazines, I was surprised at the misunderstanding amongst local pundits and the solutions proposed. The proposed solutions varied from offering 3G video conferencing, TV services (none of the video services make sense unless LTE type bandwidths are available and even then there is no proof of video conferencing making money for service providers anywhere in the world), location services (one doesn’t need 3G to have location services) and for operators to find a killer service. (operators are not known to find killer services)

Obvious Path though not Right

The obvious temptation for mobile operators will be to offer new data services and like the current VAS (value added services), keep a very large percentage of service revenue for themselves. I am afraid this will not work. Look at the examples of US and other western countries where data services  took off only after Apple made it easy for software developers to come up with new applications and keep 70% of the revenue generated.

Some Ideas

This is what I think Indian Operators should do to recover their investments and increase profitability. What do you think?

• Don’t deploy yesterday’s technology and instead take a leap to LTE technologies so that it can actually become a contender to replace DSL for broadband
• Become the best pipe and open the platform for hardware and software developers to innovate on
• Imagine new low cost smart phones, Netbooks, iPads, eReaders, laptops and other new devices all with built-in 3G technologies requiring monthly services
• Imagine new applications customized for Indian markets all requiring data connections where a developer has an incentive to innovate – a large market, good % revenue share with operators
• Imagine every student (India has lots of them and spends a lot on education) carrying a 3G enabled device all the time consuming data services everywhere

Conclusion

Just as mobile phone brought the first phone into majority of Indian homes, 3G has the potential to bring mobile broadband and hence Internet into every home provided mobile operators are not short sighted and provide the best data pipe and leave others to innovate to increase value of their data pipes and hence revenue and profitability.

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Twitterization of our culture – Its Pluses and Minus and Lessons for Businesses

We all know what Twitter is but I couldn’t find a clear cut definition of Twitterization – a phenomena that is permeating cultures everywhere especially among the younger population. Twitterization, like Twitter, is real time but rather than just being limited to 140 characters (VoIP pioneer Jeff Pulver even has a conference dedicated to that), I would call it a byte sized communication whether it is 140 words or a short message or a picture or a video. Most dieticians recommend smaller but more frequent meals for weight loss kind of like what happens in twitter land.

Therefore, Twitterization is

• Real Time Communication
• Byte Sized Communication
• More frequent Communication
• Communication whose purpose is to build & support community

So let us see its impact on various segments of business and share your opinions:

• Twitterization of Media
• Twitterization of Marketing
• Twitterization of Customer Support
• Twitterization of Software Development

Twitterization of Media – Getting to news is fast and seeing the same article many times in your twitter feeds in a matter of seconds is common. We are well informed at least on the headlines, if not on the details. Media has adopted that culture very fast but in a race to be real time, the quality of communication has suffered. Grammatical errors, spelling mistakes, and lack of fact checking have become commonplace; these problems are sometimes corrected but often aggravated by crowd sourcing. How has this affected our consumption of different types of media?

Twitterization of Marketing – Product development for companies can be done much more efficiently, but the down side is that people participating in your twitterization efforts will be self-selected. Therefore, one has to apply the right filters in selecting the right group in order to attract the most intended audiences. A product or company can rise fast but can easily fall faster too. So what are your experiences in twitterization of marketing at your companies?

Twitterization of Customer Support – This is one area that can be revolutionized for good if the companies are honest and supportive of these efforts; Comcast and Southwest serve as good examples. I have seen many a company fail at it or adopt it too late in the game. What is your experience with twitterization of customer support at places you used to call for support?

Twitterization of Software Development – The rise of Apple’s iPhone and Google’s Android apps stores is creating a culture of software development that calls for churning out quick applications with ephemeral popularity. Just as developers are quick to churn out new applications, users are just as quick to use and toss them as well. Vivek Wadhwa wrote an article on “What’s better – Saving the world or Building another facebook app” and this may provide one of the answers to his questions.

While Twitterization undoubtedly has its benefits, one of the main concerns I have about it is the current and future impacts on the younger generation. The new byte-sized real-time culture that they are embracing with increasing frequency may have the effect of upsetting advancements in science and research, as these are avenues that require extended focus and concentration (the antithesis of twitterization).  Tell me what you think?

R. Paul Singh

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