The Wholesale Application Community (WAC), one of the large cellcos’ attempts to seize the mobile software initiative from Google and Apple, has broken up. Like many carrier driven applications platforms, it failed to gather sufficient momentum to hurt Android, though its API projects will live on within the GSM Association.
The GSMA, under whose auspices much WAC activity took place, will integrate the body’s main programs into its own. The actual technology will be acquired by Apigee, a specialist in systems to publish and manage APIs (application programming interfaces). The vendor says it will deliver a unified network API service for operators, which will be provided by the GSMA to its membership.
Apigee will also continue to evolve a cross-platform mobile development platform, as envisaged by WAC when it was established in February 2010, as an extension of the Joint Innovation Lab project of Vodafone, Verizon Wireless, China Mobile and Softbank.
WAC aimed to enable operators to achieve their oft-cited goal of making their software platforms more attractive than Android or over-the-top services – to developers and to consumers – by harnessing the advantages inherent in their networks, such as location awareness and customer profiles. The goal was to open up those network APIs to developers to enhance their apps, and to create a common framework of cross-platform tools and interfaces, heavily focused on HTML5, so that programmers could target the combined user base of the WAC members with a single product.
However, as so often with operator collaborations, progress was slower than in the worlds of Android or over-the-top. The biggest concrete achievement was the WAC Payment API, which supports one of the most genuinely appealing attractions cellcos can offer developers ‘ carrier billing. The API allows developers to charge for their wares across many platforms and operator networks, using a common billing system run on the Apigee API platform. That API is deployed by AT&T, T-Mobile, Smart Communications, Telefonica, Telenor and all three Korean cellcos, and in development with another dozen operators.
Chet Kapoor, CEO of Apigee, said the acquisition was part of his company’s strategy to offer “industry specific solutions’ for developing, delivering and managing APIs, as well as the apps built with them, based on its API platform. He said in a statement: “WAC successfully launched API technology that has the potential to dramatically accelerate the pace of mobile app innovation across heterogeneous platforms and mobile operators. We are thrilled to have the opportunity to provide a global service that builds on and delivers the vision of WAC to the telecommunications industry.”
WAC is just the latest in a line of software platforms with which operators have sought to hit back against Android and iOS ‘ SavaJe, LiMO, JIL and many others. In reality, though, these are always coming from too far behind the established commercial offerings, and without sufficient support from the big web and device players. A more realistic route will be to make common cause with a fully fledged system whose owner has reason to court the cellcos ‘ as with Microsoft/Nokia and Windows Phone, or Mozilla and Firefox Mobile.
Failing that, operators will not stop trying to leverage their APIs, network capabilities and content partnerships to strengthen their own brand value, even if those applications are running on Android and iOS. Telefonica is currently in the vanguard with its new Digital division, specifically focused on new revenue streams, applications and partnerships ‘ and the first to throw its weight behind Firefox Mobile’s browser-based web apps platform.
However, the east Asian operators have always been the most adept at creating their own content and applications brands, and sidelining those of their handset vendors. That is tougher for them in the era of Apple and Google, but they have a decade of expertise to build upon, and a better track record than the usually woeful portals and stores created by their western counterparts. Korea’s SKT and Japan’s NTT Docomo are both investing in partners to help develop a second wave of services which fit with the new world of the mobile web, but keep their brands to the fore.
Such trends are shifting the pattern of cellco M&A, as seen at Docomo. In the last decade, expansion for major carriers was all about snapping up operators in new geographies. Now acquisitions are focused on new revenue streams, such as machine-to-machine, or on boosting added value offerings such as content stores, as the carriers seek to avoid the dumb pipe. This is clear in Docomo’s new strategy, as the Japanese firm looks around for new international content deals.
New CEO Kaoru Kato said he was still interested in international acquisitions, even though the Japanese giant has been burned by some of its foreign adventures in the past. However, these purchases would be in areas like mobile entertainment and e-commerce, according to BusinessWeek, aiming to give the cellco a greater revenue share from mobile video, games and music.
Last week, Docomo formed a joint venture with Chinese search engine leader Baidu, which itself wants to expand its services beyond its home market via new strategic partnerships and is creating a full mobile software platform. Docomo has invested $22.5m in the JV, called Baidu Yi Xin, to provide value added services and mobile content in mainland China.
The deal could give Docomo increased influence in China, where it already has various cooperations with the local cellcos, which have huge scale and growth potential, but less experience in digital content and services than their Japanese peers. And Kato is clear that his firm’s advantage will lie in exporting services perfected in its home country, famously advanced in digital and mobile content. ‘We first need to succeed with this distribution business at home, before taking it abroad,’ he said, as quoted by local source Asahi Shimbun.
The aim is to enter new territories and applications via partners, not homegrown development. ‘We will not make games ourselves, but join hands with others,’ Kato said. ‘We will select games with distinctive features and start delivering them in autumn or winter.’ He sees Docomo’s key role being to provide the intelligence to power partners’ services from the cloud, and to deliver value added services in countries where it does not operate its own network, in turn helping local network partners to avoid the dumb pipe trap.
Docomo recently announced plans to acquire Italian content and apps firm Buongiorno in a deal which could be worth up to $224m. Its strategy is a major change from that of the turn of the century, when the firm spent a total of about $25bn on minority stakes in foreign carriers, many with poor returns. More recently, it took a 26% stake in an Indian joint venture with Tata. But now, Kato said in the interview: “We’ve passed that stage. It’s an era of services and content on smartphones. With that as a base, we think aggregation and distribution services will be necessary.”
Kato also commented on its lack of an iPhone, one factor which led to it losing a net total of
804,000 subscribers in its fiscal year to March. A further 257,200 users have left in the April-June quarter. However, Kato said rejecting the Apple phone was right. ‘I don’t think it was a mistake. We’ve followed our own road,” he commented. “Apple has a single ecosystem and all the innovation comes from Apple. The carrier is just the dumb pipe and we don’t want to live that way.” Despite his remarks about relying on partners, it has developed a homegrown alternative to the iPhone’s ecosystem, called docomo cloud, which boasts some Apple-like features such as a response to the Siri voice activated assistant.