MWC 2008: Services key to making money from mobility

Mobile operators must focus on providing services, not just pipes, to ensure they continue to keep pulling a profit, leaders in the industry said.

At a keynote speech at the Mobile World Congress in Barcelona, Vodafone's chief executive Arun Sarin said big pipes - the term used to describe high-capacity networks - were not the right area to focus on to achieve growth in the market.

"We must not allow ourselves to become big pipes and let someone else do the services," said Sarin. "Communications is our core business - we have to provide these services," he said.

Speaking of services, he added: "If we get this right, the upside will be enormous. If we don't, it will still be enormous - just for someone else," he said.

His view was echoed by the head of Cisco, John Chambers: "If all we do is provide transport, it won't be very lucrative... If we allow markets to become dumb pipes, there'll be no profit."

Services - and how they are delivered - have been a hot topic at MWC this year. While new devices have drawn attention, the news is often more to do with the operating system, be it Android or Windows Mobile, or the web services than the new technology in the handset.

"It's no longer about devices or technology - it's about people and connected lifestyles," Chambers said.

"Apple has raised the bar, we all now know how important user interfaces are," said Vodafone's Sarin. The easier the interface is, the more it will be used, he suggested.

Because of faster, more resilient networks, content can be more varied - which is exactly what consumers want, Sarin said. "Content has to be bite-sized but also full-sized and everything in the middle," he said.

But making these services pay is no easy task. Despite this, China Mobile's Wang Jianzhou said technology and applications were not the biggest hurdle. "The challenge is not technology, not applications, it is the business model," he said.

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