Mobile Data Rip-Off?
There’s a thought provoking piece on The Register about how OpenHand, an email software provider, has found it hard to sell its service through network operators.
OpenHand says that network operators are not taking up their service because it costs less (than say BlackBerry RIM) which translates to less profit for the network operator. Furthermore, the service is more open which doesn’t suit the network operators’ need for services that lock the user in beyond the initial length of their contracts.
Looking beyond OpenHand’s ‘Let’s create some PR via a feel sorry for me story’, this is a problem I have seen with lots of companies I have worked with. Network operators are not very altruistic. They want payback now. A mobile solution must be a good financial proposition for the network operator if you want them to cooperate.
How does this affect new mobile applications? Well, if you want a large slice of the market you currently have to partner with the operators. This means designing (or rearranging) your product or service so that it looks attractive to a network operator…. both financially and in creating facilities such as customisation that lock in users.
In the longer term I expect fixed price ‘all you can eat’ and ‘WiFi inclusive’ data plans to affect the balance between network operators and third party providers. Released from the high (and ambiguous) cost of data, companies such as OpenHand will prosper.