Volume or Value?
By Carlo Longino, Tue Mar 30 18:00:00 GMT 2004

UK carriers took a low-cost volume approach, offering the lowest prices and few added services. But now, they're trying to shift to the value approach, offering content and services, and trying to charge higher prices. It's a classic argument -- should they focus on creating the best open pipe they can, or should they pursue the content side too?


An excellent post over at Techdirt highlights some of the pitfalls of trying to change gears mid-stream. European carriers' ideas have been buoyed by the success of Vodafone Live!, which made them think they could all create the next i-mode. Mike Masnick points out that carriers don't have the best track record when it comes to offering mobile data services that people are interested in, and will pay for. Open networks like the Internet have thrived when the content creation was left to people who knew what they were doing.

Part of the genius of i-mode is that it successfully blended the two worlds, but DoCoMo kept their hands out of the content to a large extent. They play a key role in certifying "official" i-mode sites, those that appear on their menus and use their billing system, by making sure they work like they're supposed to and provide for a consistent user experience -- the type of user advocacy that's needed.

i-mode is still open, since it's built around common Web standards, and any content creator can have an i-mode compatible site, which is a major reason it's done so well. The most recent figures I can find say there are 4,100 official sites that appear on the i-Menus and from which DoCoMo takes a 9 percent cut of service revenues.

But there are over 70,000 unofficial sites, and DoCoMo isn't upset about that, like some European carriers get when users try to break out of walled gardens, because they're still making the packet-transmission charges. They've engendered the creation of an entire ecosystem that's great for content providers, and great for DoCoMo too.

With what some of the carriers charge for GPRS, you'd think they'd be perfectly happy to just pick up traffic revenues...