The mushrooming mobile communities and social networks today represent two important realities. One is the transition into a participatory culture in which mobile subscribers co-create the content they wish to share and consume, and the other is the freedom of the subscribers to choose the mobile space in which they wish to share
their content.
Subscribers today chat, gossip, blog, vote, tag, distribute on-the-fly and become active participants in the mobile communities that cater to their needs and likes.
According to Juniper Research, end-user generated revenue from value added services (VAS) such as social networking and personal content delivery will increase to more than $5.7 billion in 2012.
Steep mobile penetration in countries like Singapore and Malaysia and pressures of falling ARPUs caused a shift in operators’ focus. Whereas telcos used to deliver stereotyped content and information services from standard sources, they are now starting to involve subscribers themselves to create their own mobile content and information services, motivating a loyal following around self-created applications.
The subscriber-created VAS model is expected to simplify the telcos’ challenges on yearly VAS investment and returns. It enables the subscribers to build closely-knitted communities of common interests within an operator network, thus increasing the stickiness and loyalty to the operator. While this model will undoubtedly reduce churn and counter the effects of mobile number portability in regions like Singapore and Malaysia, the telcos that pioneer and master this business model has a great potential for subscriber acquisition as well.
Giving the subscribers the freedom to explore their interest domains and build communities around it of the same interest is the dynamicity of this model. In some cases, the interest groups may be very small and in other cases large groups of people will be involved.
Mobile technology is en-route to take social networking from its infancy to the highest level. Coupled with dynamic marketing strategies, these services will be greatly complemented by viral marketing as well. The potential for growth in this domain in huge and the key challenge now is for those operators to monetize the interest.
Such a business model should be enabled with the right technology. The technology that enables this should focus on a platform that can accommodate thousands of subscriber-created pages, and the content can originate from even non-technical subscribers. The platform should converge web-based technology and mobile technology to offer ultimate ease of use to the interested subscribers to create their own applications.
The marketing effort can then be complemented by publishing the applications and be open to dynamic viewing, searching and rating engines – providing a different flavor to app stores.
The sustainability of a subscriber-created VAS business model will be dependent on technology that can eliminate capital expenditure and reduce incremental costs to the operator. This will funnel thousands of subscriber created applications to the operator, creating a long-tail business benefit.
Sampath Paranavitane is general manager of hSenid Mobile
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