TABLE OF CONTENTS Carriers are turning to mobile data services as a new source of revenue and means for increasing ARPU (annual revenue per user). The first thing that any strategist creating a mobile business model must realize is that the economics of packet networks is quite different from that of traditional cellular networks. Cellular networks support only per-minute and flat-rate charging models, while packet-based data networks open the door to a host ofnew revenue options.
The business models that operators and their partners choose have a high impact on operator-retained revenue streams. Mobile operators are caught between the steady decline of voice ARPU (annual revenue per user) and the cost of upgrading their networks to CDMA2000, GPRS and UMTS.
The Internet, while a huge user success, was a business failure for the network operators such as Sprint and AT&T. They did not effectively monetize the IP traffic being generated by their customers. The mobile operators cannot afford to have the Internet revenue-capture fiasco happen to them. As a result, operators are under tremendous pressure to figure out a way to share in the value delivered on their mobile networks.
The new revenue models need to address the following:
a shift from a voice-only, direct relationship with the user to a complex data one
a move towards a portfolio of enterprise services with multiple partners and revenue sharing
increased competition, with third parties (MVNOs) also targeting the end-user.
The basic challenge for operators is the integration ofthe Internet with...
