The Revenue Conundrum with 3G Mobile Services

Today’s 3G mobile networks have ignited the consumption of mobile video services. Powerful, data-hungry smart-phones are generating huge traffic growth over 3G mobile networks. But which industry players are commercially benefitting from this trend?

Certainly, the handset manufacturers are benefitting, as 3G subscribers replace their older models with the latest smart-phone with easy-to-consume Internet access features. And Internet content providers are benefiting, as they can now repackage their news, video and social networking sites for new mobile markets, helping them generate new advertising revenue streams. But what about the mobile service providers (MSPs)?

It seems like MSPs are increasingly relegated to the role of broadband access providers between handset devices and Internet-based content providers. Sure, MSPs gain an incremental revenue for each new 3G data plan subscriber that they sign up, but 3G High Speed Packet Access (HSPA) services are essentially undifferentiated, so MSPs will increasingly compete on price alone, resulting in eroding Average Revenue Per User (ARPU).

Meanwhile, these 3G handsets are clogging up the core network. The Wall Street Journal recently interviewed AT&T Mobility’s Chief Executive Ralph de la Vega, who disclosed that 40% of AT&T mobile data traffic is generated by only 3% of handsets!

So what are some of the revenue challenges for MSPs?

  1. Increasing revenues beyond flat-rate mobile data plans starts by offering differentiated, network-based conversational video services.
  2. Each of these services has historically required its own service platform, with its own network interfaces, application logic and media processing hardware.
  3. As more services are added in the services portfolio, the integration and operational complexity of the services architecture increases, resulting in high costs which squeeze profitability.
  4. If you can’t offer these types of services at a competitive price, adoption will never take off.

To address these challenges, we’ve introduced the Integrated Mobile Media Server (IMMS) to help MSPs generate cost-efficient mobile service revenues beyond flat-rate data plans.

IMMS is a pure IP-based services platform, offering immediate cost savings compared to circuit-based service platforms prevalent in today’s PSTN and 2G/2.5G mobile networks. It drives cost savings further, through the functional integration of critical service processing features, such as its built-in support for 3G-324M video processing.

For increasing revenues, IMMS supports the ability to offer differentiated 2-way personalized audio and video services, such as ringback tones, conferencing or interactive voice and video response. IMMS also has the ability to enhance and monetize 1-way streaming services, such as inserting revenue-generating text advertisements into a video stream, before delivery to a 3G handset.

Looking ahead to 4G, as a packet-based service delivery system, IMMS will support 4G/LTE deployments as they roll out, driving future revenue opportunities to Mobile Service Providers.

Consider the revenue conundrum solved.

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