One of the most eagerly awaited announcements at 3GSM was one that just didn’t seem to happen – the much rumored alliance (or plot) of seven large cellcos to create their own mobile search engine to reduce their dependence on Google and Yahoo, with which many of them already have content deals. The companies involved are said to include Deutsche Telekom/T-Mobile, France Telecom/Orange, Hutchison 3, Telefonica O2, Telecom Italia, Vodafone and Cingular Wireless.
All parties involved, and the GSM Association, deny knowledge of the story, which originally leaked, with anonymous sourcing, in the UK’s Daily Telegraph newspaper. The high degree of credence it has been given is probably a reflection not of its actual truth – such a deal would be a shocking U-turn on recent moves by the large operators – but of an instinct that the mobile carriers are still desperately looking for a way to regain the initiative, and the pole position in the value chain, in the mobile internet.
Of course the increasingly unstoppable trend in the mature mobile markets towards creating a fully fledged, unfettered internet experience on the handset is a bitter blow to the business models on which the cellcos based their 3G investments. Instead of controlling the user’s internet behavior carefully, and profitably, within the walled garden, operators are being forced to open up access and face the prospect of their hoped-for per-megabyte data rate fees collapsing into flat rate, ISP-style charging.
They cling to the notion of keeping the user within their own walls voluntarily, by offering a superior experience to that of the open web, but this will depend on a complex web of content and internet service partnerships, all of which eat into the cellco’s revenue shares. Some, like Verizon Wireless and some MVNOs, have been reasonably astute at signing up distinctive content deals and placing the services within attractive interfaces, but as the MVNOs such as Amp’d have found, premium content may be a pull to some users, but is way down the priority list compared to cheap voice and flat data pricing schemes.
The only hope of increasing the subscriber’s average spend on premium mobile internet services will rest upon dramatic improvement of the cellphone experience, partly through the better data rates of HSxPA and EV-DO Rev A, but mainly by enhancing the browser, user interface and accessibility of content, all of them still feeble on the mobile phone compared to the PC experience. If the cellcos could achieve these improvements ahead of the internet specialists like Google and the mobile manufacturers, they really could regain the balance of power in the mobile web as well as sidelining their less advanced rival carriers. But the hopes of this are very low and their primary goal is likely to be increasing control and profit, not devising a better search engine. A few mobile operators have done innovative R&D and created interesting navigation, content discovery and browse/search functionality – T-Mobile USA, Alltel and O2 come to mind, but they have been heavily dependent on vendor partners such as Qualcomm, rather than seizing the intellectual property agenda themselves. The Japanese and Korean majors remain the exception to the rule, but even they are being forced to make nice with the internet giants, and they are noticeably excluded from the rumored alliance.
So why should search be any different? A better search engine will be part of the process to make the mobile internet a viable user experience and therefore commercial model, but any attempt by the cellcos to create their own platform, to set up against the huge investments and experience of Google and Yahoo, is almost certainly doomed to failure, even if the operators could actually reconcile their requirements and development agendas sufficiently to agree on a consensus platform – remember now little has really emerged from the announcement at last year’s 3GSM that a band of large mobile carriers were cooperating to make their instant messaging systems interoperable. In fact, such an attempt in search would alienate the search giants and delay what the user base needs, an attractive and harmonized search offering on mobile platforms. The fact is, the real progress in making the mobile internet usable has been made by the vendors – the internet majors themselves, Nokia and Apple in particular. The cellcos need to harness that progress, rather than pursuing an impossible dream of setting up a superior roadmap.
They are sure to be scouting around for clever start-ups that can offer them advances in mobile internet functions, (or a suffering company like InfoSpace) and there are plenty of those to be tapped, but it is all reminiscent of the SavaJe mobile operating system episode – the start-up was heavily backed by several large cellcos, including Vodafone, to offer a counterweight to vendor-dominated Windows Mobile and Symbian. But the operators had too little understanding of, or resources for, software development to compete with the giants, and the gesture was little more than that, perhaps scaring Microsoft and Nokia into being a little more friendly, but no more than that. It would be the same with Google and Yahoo, should the cellcos really be planning this alleged attempt on the search fortress.
Surely the recent U-turn of Hutchison 3 – which went from being one of the strongest defenders of the walled garden to launching an ISP-style mobile internet package of flat rate services – is indication enough that, with varying degrees of reluctance, the cellcos must accept the new business model and seek innovative methods of making their relationship with the internet companies a profitable one for them, rather than being relegated to the dreaded bit pipe provider status. After all, at last year’s 3GSM Vodafone actually used the even to form alliances with Google and others, bowing to the inevitable as the cellcos did with Wi-Fi hotspots. Faced with the prospect of Google or Microsoft promoting, and even building, networks out of the control of the licensed operators, those carriers acted to neutralize the threat and at least keep the mobile internet world under their control.
All this is not to say a new approach to mobile search would not be welcome, but perhaps we should look not to another set of supplier interests, but to the open source community, especially as Linux and technologies like Apple’s Safari browser gain ground in the smartphone. Much of the work being done by Nokia, Google, Apple and others on adapting widgets technology for mobile platforms is focused on enabling user-generated and communal content generation, a key trend in the PC-based ‘Web 2.0’ but largely impractical with current handset interfaces. Jimmy Wales, founder of the Wikipedia collaborative online encyclopedia, believes the masses on the internet could build a search engine, PC or mobile based, to outdo Google. Speaking in New York earlier this month, he outlined a vision for an open source, for-profit product called Search Wikia, which should launch in beta release (though initially not on handsets of course, unless a cellco takes a really innovative approach) around mid-year. Beginning with Lucene and Nutch, (two open source, Java-based search engines based on the Apache Jakarta Project), programmers will be able to copy, modify, and redistribute code. Others can provide feedback and there will be a ‘trust network’ of users to make content decisions.
There is room for a better mobile search experience than Google and Yahoo currently provide. But it is highly unlikely the cellcos will be the ones to create it. Any consortium they form at 3GSM would be more likely geared to mobile advertising frameworks – or merely another example of collective flag waving, with little real substance.