Mobile developers to carriers: Please get out of the way
"There are huge numbers of users who desperately want to use mobile but the right data plan is not available yet," says Mark Curtiss, CEO of mobile dating and flirting applications/social network Flirtomatic. Curtiss cited a recent Friday when British telecom Vodafone offered a window of 24-hour free data service to customers. "Registrations went through the roof," says Curtiss.
He acknowledges that free is not a sustainable price for data services but feels there must be a happy medium. Carriers, traditionally, have viewed data services -- namely, mobile Internet services -- as their growing cash cow. For example, AT&T (T) has posted markedly faster growth in its data services revenues, due to the high level of mobile Internet usage by iPhone customers. But that view has also resulted in data packages that can easily double the cost of a monthly wireless bill.
In comparison, typical wireless bills in Asia, where use of the mobile Internet actually eclipses use of PCs for Web access, are much lower and tend to have unlimited monthly data plans for a smaller amount of money. Asian carriers have been able to make money by taking a slice of a slew of new wireless services such as games where users buy additional weapons or points to get to a higher level.
The U.S. mobile app developers think that making mobile data cheaper would actually result in a bigger revenue pay with a larger gross amount of the carriers. This could be particularly important for the big carriers as they sink billions of dollars in the U.S. into upgrading mobile networks. Another key change would be for carriers to hand over a larger chunk of the revenue pie to mobile application companies. Apple (AAPL) gives roughly 70 percent of the revenues for sales of iPhone apps back to developers. In comparison, large mobile carriers give a fraction of that amount back.
Already these CEOs claim that carriers are starting to see the light. Verizon (VZ), Vodafone (VOD) and others are beginning to offer richer development tools and better access to developers seeking to build rich and innovative apps for mobile networks. "This is a seismic shift. There was a point in time when they viewed themselves as entertainment companies. They are starting to view themselves more as an distribution company," says Adam Zbar, CEO of mobile social network application company Zannel. The faster that the carriers realize the content and application creation is best left to others, expresses Zbar and others, the faster the Mobile web will be able to generate real revenues beyond paying for data delivered without wires.