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Massive Wireless Business Model Shift Is Imminent

By Tara Seals
February 17, 2010 - News

MOBILE WORLD CONGRESS — It was a meeting of the heavywights as executives of the GSM Association, Vodafone plc, Alcatel-Lucent and BlackBerry-maker Research in Motion Ltd. took the stage in Barcelona on Tuesday with a mix of messages. But in the end, the industry association, operator, gear-maker and device player all agree on one thing: Hold onto your hats. The wireless business model, driven by openness on all levels and applications innovation, is on the brink of a complete transformation from the business models of old.

It will be the “year of the developer,” according to Robert Conway, CEO of GSMA, kicking it off. New business models will be driven by devices like the Apple iPhone, which will bolster the rise of ad-supported services thanks to its focus on enabling cloud-based apps. In fact, he noted, mobile advertising will outstrip Internet advertising by 2013, citing a study from Gartner Inc. that says 8.2 billion smartphones will be around by then, compared with just 1.78 billion PCs. In other words, mobility will be the primary method of connecting to the Internet and each other, he noted, and there will be an attendant revenue shift from the fixed to the wireless Web.

Vittorio Colao, CEO of Vodafone, echoed the theme, championing open access, net neutrality and resulting networks that are "truly open, truly competitive, and truly sustainable."

And with that, he took up the them of a new cost profile: With mobility as the primary digital conduit for the global population, higher mobile broadband speeds (28.8mbps is available now) and increased traffic and hardware volumes, delivery costs are falling well below the levels of traditional circuit-switched voice. And that, he noted, has a transformative power, making it feasible to connect smart cities and smart workplaces with new technologies like M2M for greater efficiency.

Add in a rich, innovative application ecosystem, and it changes the game for operators everywhere. He voiced support for a write-once, run-anywhere model that would allow consumers to port their apps from platform to platform – the primary goal of the just-announced Wholesale Applications Community, of which Vodafone and 24 other Tier 1 operators are a part.

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