Anyone who's followed early stage wireless companies in the last twelve months is bound to have heard the 'dumb pipes' prophecy: that carriers will ultimately be relegated to a role of providing a conduit for data, losing any value added service role. Aeons ago, in September 05, Dorrian Porter wrote that:
The central question at any mobile event I attend continues to be whether or not mobile carriers become dumb pipes for data, and that’s it. It amazes me how this question, elegantly or poorly stated, gets applause and laughter from the audience every time. While many folks in the industry push for open access, most carriers point out that the complexity and disparity of phone types, data speeds, operating systems, browsers and applications make it important for them to play a shepherd’s role in approving and managing application access.
According to a press release titled Carriers Beware published yesterday by In-Stat, incumbent carriers, especially in smaller markets, have cause for worry. In-Stat's key take-aways:
About 80% of both planned and current cellular subscribers would consider buying service from an MVNO. Compared to other providers, customers of the smaller US national carriers are likely to churn and represent potential prospects for MVNO services. Most wireless purchasing decisions are based on three main factors; coverage, service quality and price. Consumers considering wireless usage may be swayed by payment flexibility and cash payment options.
Companies to track as this market evolves:
Disney (NYSE:DIS) has made a major push into mobile, both via ESPN (rolling out nationally on Sunday with 60 second Superbowl ad) and Disney Mobile which delivers a range of entertainment content to mobile phones through services distributed to families and the teen/pre-teen markets.
Virgin Mobile: One of the first MVNOs targeting 15 - 30 year age group; with all-inclusive, pay-as-you-go wireless services designed to reduce the responsibilities associated with monthly bills. Last week, Reuters reported that Virgin Mobile majority shareholder Richard Branson is "hopeful" that the $1.6 billion acquisition by NTL would happen within a couple of months.