Apart from the 3 “special powers” mentioned by Shai Berger, I would add QoS. With IMS deployed, only the mobile operators can control QoS. A guaranteed QoS enables carrier-grade VoIP and other real-time conversational services, like high definition video calls and video sharing, that Internet players can not deliver with best-effort Internet QoS.

Once the operator controls the real-time services, then it is in a strong position to bundle presence, location, user profile and IM with conversational services. Without this bundling, Google, Microsoft and Yahoo are even in better position than operators to provide applications based on presence, location or user profile (including advertisement).

On the content delivery side, similarly the battle is not lost for operators if they show the determination and courage to play their cards. See KDDI example of a music service that competes head to head with iTunes.

http://tech-talk.biz/2008/01/12/kddi-lismo-best-mobile-music-service-in-the-world/

Typical Western European markets are saturating at the 80% penetration level. However, there will be increased operator focus to migrate this subscriber base from the current 2G service offering to GPRS and 3G services. To migrate customers from 2G to 2.5G services, operators will need to migrate their own subscribers and churn competitor subscribers, and attract them to upgrade their handsets to take advantage of new services. As a result, key operating expense drivers like subscriber acquisition cost (SAC), subscriber retention cost (SRC) and customer churn will continue to be an area of focus for operators. Increase in ARPU will continue to be the main driver for revenue.

… and financial markets are expected to challenge operators’ future investment plans
Exhibit 1
Subscriber penetration in the UK

Source: Analysys

A typical operator (in one of the five largest European markets) is expected to invest nearly EUR1 billion in the next four years in expanding GPRS capacity, as well as rolling out initial 3G networks in major cities. The basic operator business model in Europe is driven by voice and SMS revenues. Packet-based GPRS networks for data are still relatively unproven as business successes. As GPRS data networks will have a business model similar to future 3G networks, it is critical that operators prove the success of packet-based systems with GPRS. The success of GPRS will be increasingly measured, not only in terms of subscriber take-up and revenues, but also on the efficiency of capital utilised. In addition, potential consolidation within the industry will put increasing pressure on enterprise valuations.

Financial markets are expected to increasingly evaluate companies on capital efficiency ratios
Markets have traditionally compared company valuations on subscriber and EBITDA ratios, though valuation ratios themselves tend to be volatile

I consider Google, Yahoo, and Microsoft to be among the media companies.

Thanks

Developing applications is not the expertise of media companies nor telecom operators . . .

Thanks for your comments. While there are other ways to enable/leverage network features, operators are still better positioned (currently) for the mass-market (as it relates to mobile). Whether they (or are able to) leverage that position or not is the point of my discussion.

Thanks
Chetan

I agree with Aswath that location, presence and user profile info can be gotten without carrier involvement. For location, see for example what Navizon is doing. For presence and profile, see Jaiku (now part of Google).

I think there are 3 “special powers” that carriers bring to the table: 1) Billing relationship (customer support, extending credit, bundling programs, etc); 2) Integration (shortcodes like 411, “Pound and Star” combinations); 3) Marketing (billing inserts, etc.)
I elaborated on those 3 a bit more here: http://www.shaiberger.com/?p=39