Are There Big Bucks In Selling Mobility To Businesses?
By Mike Masnick, Tue Dec 14 00:30:00 GMT 2004
As AT&T looks to re-enter the mobile space via an MVNO with Sprint, the general feeling is that it will focus on its business customers, by offering them a complete package of services. However, mobile phones are still mostly personal purchases.
Soon after Cingular announced its plans to acquire AT&T Wireless, AT&T (not AT&T Wireless) announced plans to take back the AT&T Wireless name, and offer service as an MVNO, using Sprint's network. The problem, as always, is whether or not these MVNO offerings compete with the network provider's own customer offering. This becomes even trickier as the stories suggesting a Sprint-Nextel merger gain steam.
One analysis of this situation points out that, while there may be conflict, AT&T can use its strong existing relationships with corporate customers to include a wireless package with existing telco services, including long distance telephone and broadband data connections. Sprint, for the most part, has been a consumer oriented brand. While it has some business customers, it hasn't been nearly as successful in that realm. Nextel is almost the opposite. Management has consistently focused on targeting high revenue corporate opportunities for Nextel phone purchases, often driven by Nextel's Push-To-Talk DirectConnect technology.
Thus, the fear is that, with both Nextel and AT&T charging after the same business customers, Sprint gets caught in the middle, competing with its own partners -- the very problem many people see in becoming a carriers' carrier, while being a direct to consumer carrier at the same time.
All of this, however, ignores the much bigger issue: while Nextel has been successful in getting corporate customers with DirectConnect, is the market for corporate customers really that large? Historically, mobile phone purchases have remained an individual decision. While many companies do offer reimbursement for mobile phone choices, it's less common to have companies offer users a new mobile phone and service at the point of hire. Instead, most employees come with their own, and simply send in bills for reimbursement.
While some companies may try a middle ground approach -- letting employees bring their own, but also offering better deals if they go with the company's approved operator -- it's not clear that there's really a strong demand for such systems. The one thing that can pull it together would be mobile applications that are necessary for the job. This is the case with PTT, but there haven't been many other applications of the same nature. While some firms are trying to mobilize their enterprise applications, these are usually designed to be accessible on a variety of platforms -- and often aren't so important that all employees need access via a phone.
The end result of all of this is that, just because AT&T has strong ties into companies via its long distance business, it doesn't mean companies are going to immediately jump into bed with them in the mobile realm. Compelling applications, again, will drive usage, and for the time being, there's no indication that those applications are coming from the corporate IT departments.