Clash of the Titans in the Mobile Ecosystem

As new devices, app stores and rising mobile broadband usage continue to change the way consumers and businesses interact with the cellular infrastructure and even the Internet, power is shifting in the mobile market. On Friday, as part of the Mobile Broadband Breakfast series, I moderated a discussion among five panelists specializing in everything from network gear to applications who had gathered to talk about how that shift in power is affecting the industry.

The Seattle event, put together by Chetan Sharma of Chetan Sharma Consulting, solicited a wide range of insights from the panelists. However, in talking to folks afterward I was floored by the disconnect between the carriers’ perception of their value and the value that app makers and content companies ascribe to the carrier network.

Neville Ray, SVP of Engineering, T-Mobile USA

A perfect example is in the billing space, where carriers attach a lot of value to their billing relationship with their customers, a role that is quickly being disintermediated by billing platforms such as Apple’s (s aapl) iTunes, Google’s (s goog) Checkout, PayPal (s ebay) or Amazon’s (s amzn) 1-Click. Another example includes the access to customers and marketing dollars that carriers once had a monopoly on. However, thanks to the rise of OS or device-specific applications stores such as Apple’s App Store and Google’s Android Marketplace, companies other than the carriers are providing platforms that can reach millions and may even influence which carrier a consumer chooses.

So amid some discussions on the technical challenge created by the capacity limits of the spectrum allotted for mobile broadband, and musings on how regulatory actions with regards to network neutrality, getting more spectrum and even openness in the wireless industry will affect players, I think the business model constraints provide the best fodder for debate as well as the most opportunity for new entrants to the market. Of course, any company that can address the underlying technical constraints by squeezing more bandwidth into a megahertz of spectrum is worth listening to at this point.