The Pipe Is Only Dumb If You Make It That Way

Over on GigaOM, Chetan Sharma has a guest column called The Operators vs. the Media Brands that’s well worth a read. He talks about how the two industries are converging, but how difficult it is for operators to become media companies, despite their comments to the contrary. The biggest point I took away from it came from this passage:

To be successful over the long term, operators need to focus on the unique elements that only they can provide — such as location, presence, user profiles and platforms for applications; as well as device and network APIs — and build business models around abstracting this information so that the ecosystem can utilize them to enhance user experience and usage. Such an approach will enhance their competitiveness in the media ecosystem, keep the usage and ARPU levels up, and get more entrepreneurs and users involved in moving the industry to its next milestone.

While I disagree that only operators can provide things like “location, presence, user profiles and platforms for applications” (I’d argue that Google offers three of those four already), the bigger point is valid: that operators will only become dumb pipes if they choose to. This doesn’t mean they should try to be media companies, but rather, as Chetan says, they should focus on building smarter pipes.

Mobile connectivity has become a commodity and will be priced as such; but if operators can offer additional value to content providers, beyond data delivery, through their networks, they can expect to be compensated for it.

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