dinsdag 16 augustus 2011

Mobile internet and why it shook the C in ICT

In The Netherlands the communications incumbent KPN (Telecom) and its multinational followers like Vodafone and T-Mobile have found a new cash-cow, they think. Mobile internet. Well, think again friends, because it may be your demise.

Here we have a rather strange business model. The C1-companies have lured customers by providing mobile phones “for free”. And of course they battled on their hourly, seconds, kilobyte rates. They also paid an unhealthy amount of money for ether space, but that is just their own error.

To attract new customers, of the mobile internet type, they – the telco's – introduced low cost internet access, “buy now, pay as you go” smart phones and the like. But alas, short oversight: new internet applications on these mobile units, the famous 'apps', started to rule the old telephone business model. So internet access didn't just ADD new income but also COST them old income, like text messages (MSN, Whatsapp) and telephone voice calls (VoIP, Skype).

It is rather amazing that they didn't see this comin'. Every internet user is familiar with Skype, MSN IM, Pidgin and the like. Why would any intelligent board member of KPN think that the old POTS2 would hold in a new world? If paying for POTS is far more expensive than using internet for free? So the Board goes for the shareholder instead of their own client! With dire consequences.

Their users, their clients, must pay additional fees for using protocols that are a threat to the POTS business model. Just to save a technology that's just old, plain old. This is like having to pay extra if you drive a new (green eco-friendly) car because there are still diesel or petrol driven engines around. Let us get a few facts straight.
  1. Argument “The increased internet usage is costing a lot more”. Well, all mobile internet uses a lot less radio space than POTS does. The bandwidth for MSN or Whatsapp is not worth mentioning.
  2. Argument “The increased internet usage is costing a lot more”. If they mean: more users it also means much more income, so one is compensated by the other.
  3. Argument “They are all downloading movies constantly”. Well, most never do, some do a few short clips streaming from YouTube, which is a master in reducing load. Besides, even if the telco provides a flat rate internet access, there is always the maximum 'fair use policy' as part of the contract.
  4. Argument “They are all downloading movies constantly”. If you want to watch streaming video on a mobile, you will search always for WiFi hotspot because you will get uninterrupted and fast access, something 3G mobile will not handle.
  5. Most people will have their WiFi access always on, so the device will search a local access point (WiFi AP) which doesn't interfere with telco's bandwidth, but it provides them with income without cost.
How to go forward instead of stepping on the breaks?

For the telco the next free advice: search out a consultant used to think for your stakeholder (=client) instead of your shareholder. One who is very much familiar with the social effects of new technology. Go from ICT to IcT to IPT.

For the stakeholder, the mobile internet user, the following advice (of course it's free): if your telco start charging more for internet access or, much worse, charges different rates for different apps in use, go for a pure telephone subscription – no internet! Get internet from WiFi AP's only, at home, the office, a shop, bar or restaurant. Faster, more reliable, and free!

Also support the claim for net neutrality with your politicians and policy makers. Net neutrality means that internet access providers are forbidden to charge different rates for internet access, based on the TYPE of usage. Only the AMOUNT should be fairly chargeable.


1C = Communications, which makes a C-company a Telco.
2Plain Old Telephone System

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