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It wasn’t too long ago that the path to success for mobile carriers was a straight one: Simply offer compelling handsets at competitive prices and maintain a top-notch network and your customers would be happy. And for those that weren’t, manage a competent customer-care division. That model is rapidly changing, though, as we reach the point of market saturation.
Carriers in Western markets have precious little room for growth unless they poach customers from their competitors. Cell phone penetration in the U.S. stands at 89 percent, according to CTIA, and Chetan Sharma pointed out earlier this month that mobile’s market penetration in America is 99 percent for people over than the age of five. The increase of machine-to-machine connections and the coming wave of connected consumer electronics (non-phones) will help, but carriers will have to evolve beyond being simple network operators if they’re to thrive in the coming world of mobile data.
Another factor beyond market saturation is at play here, too. Mobile is no longer just about being a provider of wireless phones and connectivity; it’s about adding value with applications that leverage Web 2.0 features like presence and community and combining them with mobile’s unique characteristics, such as portability and location awareness.
While the rise of mobile Web 2.0 is a looming threat for network operators, it also presents an opportunity to develop and market more compelling “over-the-top” offerings — applications and services from carriers that can be targeted at users on other networks. In my weekly column over at GigaOM Pro, I’ve taken a closer look at this topic, with a special focus on AT&T’s Buzz.com offering. I’m sure we’ll see more examples as carriers attempt to make a very difficult transition beyond their established business model into uncharted waters. What kind of opportunities do you see?