Opportunities for Mobile Providers in the Post-Smartphone Age

So it won’t literally be the post-smartphone age until we all have communications devices embedded in our retinas. But for mobile network operators (MNOs), the post-smartphone age is a real thing, right now. As revenues from traditional voice and data services have become commoditized, so have the devices themselves. Whether iPhone or Android, there is very little meaningful carrier exclusivity for handsets. It’s no longer a differentiator when you can get pretty much any phone from any carrier or even BYOD thanks to unlocked phones and eSIMs.

So what can carriers do to reduce churn and acquire new customers? It’s less about standing out by waving around the next big device, and more about diversifying services. Here are some of the most promising opportunities for MNOs in the near future.

Value-Added Services

Services are the lowest hanging fruit and mobile value-added services (MVAS) are the largest category. They go beyond the traditional voice, data, and mobile messaging offerings MNOs provide. By 2020, revenues from MVAS are projected to hit $655B, up from $330B in 2015, according to one industry estimate. Examples of MVAS include mobile advertising, mobile money, location-based services, and mobile entertainment.

MNOs could see substantial revenues from advertising and mobile entertainment in particular as mobile becomes the dominant platform for content of all kinds. Innovative providers can drive revenues further still by creating entirely new mobile experiences. Imagine Pokémon Go, but monetized in endless ways to incorporate elements of mobile advertising, location awareness, and streaming video content.

Telecom Data as a Service (TDaaS)

Wireless providers have unique access to customer data that encompasses everything from application usage to subscribers’ physical whereabouts throughout a day—information highly coveted by mobile advertisers, device makers, and application developers, among others. Revenues from TDaaS could reach $80B a year by 2020, according to industry watcher 451 Research. Privacy concerns could hamper those results, which is why the most viable scenarios will likely involve the use of anonymous and aggregated data. To win in this arena, MNOs must manage data resources far more efficiently than they’ve shown to date.

The Internet of Things (IoT)

Of the many emerging revenue sources available to mobile providers, IoT is potentially the largest prize of all, with estimated annual revenues in the hundreds of billions of dollars. Two IoT options in particular could be especially lucrative.

Wireless pipes

Because connectivity is their stock-in-trade, MNOs are in a prime position to monetize connections from IoT’s billions of smart objects. But those revenues will be fiercely contested. That’s because the majority of IoT connections won’t require the high throughput and security that MNO’s cellular networks provide. Instead, they’ll rely on low power, wide-area technologies that are better suited for transmitting mundane information intermittently. Think connected washing machines and office printers. In the race to capture this far larger slice of pie, some mobile operators like AT&T and Verizon are scrambling to launch their own low-power wireless networks based on technologies like LTE-M, a version of LTE designed specifically for IoT use cases. AT&T has an early lead with its first commercial deployments of LTE-M slated for later this year.

IoT services

Mobile operators can also generate new revenues by providing their own IoT platforms, offered on an as-a-service basis. Examples include Verizon’s ThingSpace and T-Mobile’s new IoT Access packs. In addition, providers can grow recurring revenues by offering diverse IoT enablement and support services that target specific industry verticals, including smart homes, connected vehicles, smart cities, and connected medicine. Success here, however, requires technical know-how outside MNOs’ core competencies.

Seizing opportunities

An abundance of monetization options lies ahead for mobile operators. The ones who’ll gain the most are those who make the right technology investments today and then execute by applying imagination, agility, speed to market, and digital aptitude. Those traits have traditionally been in short supply among MNOs. They’ll need to acquire them quickly if they hope to maximize revenue opportunities in an increasingly connected, fiercely competitive communications landscape.

Read the Aria for Communications whitepaper to see how Aria gives communications organizations the agility to compete in the digital age.