Throughout the history of mobile, consumer demands have determined how the industry’s businesses turn a profit.
Voice led the way for nearly three decades, then messaging began to gain on its standing, and now data access is rising against both messaging and voice as a revenue stream.
Data access, unlike voice and messaging, has spawned an influx of new types of services that have disrupted the normal cycle, beckoning a new “fourth wave” of mobile on the horizon.
Mobile industry strategist Chetan Sharma has detailed the potential in a research paper, “Operator’s Dilemma (and Opportunity): The 4th Wave,” in which he explains how the fourth wave represents the next age of mobile services following the previous three periods defined by voice, messaging and data. Sharma shows growth during these three periods as similar curves based on revenue and subscriber penetration. The curves slowly rise when penetration is below 25 percent, accelerate until penetration reaches 70 to 90 percent, and then flatten before eventually declining.
Unlike its single-service predecessors that followed similar growth trajectories, Sharma’s fourth wave challenges this cycle because it includes a combination of value-added applications like cloud services, mobile payments and connected-life technologies, which represent a composite of curves rather than a single one. His insight proposes a radical transformation with a host of new market forces that must be taken into account.
For one, the services constituting Sharma’s fourth wave will have to respond to mobile end users’ increasing demands for personalization—a dramatic departure from the one-size-fits-all capabilities of the past. Considering this, it will be imperative for mobile service providers to harness end-user data more effectively to develop innovative solutions that enhance the lives of their customers. As an example, many MNOs are already using their subscriber data in new ways to roll out services such as enhanced roadside assistance, maps showing locations of family members and multimedia cloud services.
Sharma also notes that the barriers to entry in the market of the fourth wave will be significantly lower, making it easier than ever for startups and nontraditional mobile players to compete. Moreover, the fourth wave will be defined by a much more diverse competitive landscape that includes a mix of such players as social networks, application service providers and enterprises, in addition to mobile operators.
Another important component of Sharma’s fourth wave will be the increasingly short market cycles during which new services will come to market, achieve peak popularity and begin to decline in favor of the next big thing. The market cycle for each of the first three waves has progressively shortened, and I predict that the average cycle for new services in the fourth wave will shrink to an astonishing year and a half. This will serve as yet another impetus for mobile service providers to stay agile, flexible and prepared to change course to meet the fluctuating needs of end users.
In summary, operating within Sharma’s fourth wave will be unlike anything the industry has ever experienced before, demanding new skill sets, business models and partnerships. To succeed, mobile service providers must move beyond simply providing services to delivering innovative solutions that will enable them to compete in a much more fragmented and fast-moving marketplace.