The problem may not just be about content but about the entire 3G mobile content business model. Very much like the Wild West of those days, the mobile industry is an unruly world where anything goes and each telco is a law unto itself.

Kashminder Singh

Everyone in the telecommunications industry is cracking his head trying to figure out what content will work on 3G. In their race to come up with killer 3G content they may be overlooking another point that could be holding back 3G growth.

The problem may not just be about content but about the entire 3G mobile content business model. Very much like the Wild West of those days, the mobile industry is an unruly world where anything goes and each telco is a law unto itself.

Let’s get one thing straight first. There’s a heck of a lot of mobile content out there. In truth, there may already be far too much mobile content. I was at the Mobile Content Asia conference in Singapore in early April and all kinds of mobile content was on display. From (almost) naked news readers to Bollywood songs and dances, the sheer amount of content being hawked to telcos was literally overwhelming.

Why then are 3G operators still waiting for lift-off?

A perusal of the topics discussed at the Mobile Content Asia conference may throw some light. The participants tried to understand the best way to deliver mobile content to users. People spoke on how to overcome challenges from content creation to reaching the end user; on how to maximise revenue.

Three things were abundantly clear.

Firstly, telcos haven’t yet decided how to split revenue fairly with content providers. Different sharing ratios are being demanded in different countries. In China, telcos are wiling to give as much as 90% to content providers. In Malaysia and Singapore, it is as low as 30%. Such wide disparities make it difficult for content owners to price their content or project earnings. Even in the same country, different telcos offer different percentages to content owners.

The problem, I think, lies in the way telcos consider themselves. China telcos consider themselves to be carriers and are happy to get a small slice of content revenue. Other telcos, on the other hand, think they are the gate to millions of users. And they want a hefty slice for allowing access to their users.



Obviously market forces and new technologies  are not going to allow this situation to stay  this way much longer so the faster telcos learn that having a small share of successful content is better that a big share of non-existent content, the better it would be for everyone.

This is only one third of the story. Content providers are also very unhappy with the lack of marketing support from telcos and the slow pace of these behemoths. One content provider revealed that his product had not been launched six months after signing an agreement with a telco. Content providers were also expected to market their content themselves. As one participant told me bluntly, telcos don’t mind if 9 out of 10 content failed – they would still make money from that one success. So, on top of biased profit sharing ratios, content providers had also to fork out money for marketing on their own and assume all the business risks.

Most content providers end up adopting a hit and run strategy. Content is offered to users with very little marketing for a while and if it does not take off very quickly, it is removed and replaced with something else.

Finally, telcos and content providers have their own idea how to offer 3G services. Some want to charge users for each time they access content. Other want to charge a monthly fee for each content. A few even want to sell their content to the teclos for a one time fee. Yet others (the far-sighted ones, I think) think the best option is to charge a flat monthly fee for unlimited access to almost all content.

The picture I got at the conference was that a lot of things need to be sorted out before 3G can be widely adopted.

To put it simply, the blockages are at the back end level and that things are getting very smelly down there, because this has been going on far longer than it should have.