The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports. A new mobile applications server introduced by Contec Innovations (see article on page 6), which gives more control over content to the wireless carriers, illustrates a fundamental problem for the future of the wireless data market in the near- to medium-term. How to develop a proper revenue sharing model so that both sides benefit? The model currently in use has the applications servers residing outside of carriers’ networks. Calgary-based Wmode, which took its inspiration from NTT DoCoMo in Japan and is one of the advocates of this approach, acts as a clearinghouse to make sure that content providers and carriers alike get their fair share. On the other hand, Contec proposes to put the servers inside the operators’ networks, which gives them significantly more control over the content. With this new model, the operators will want to claim a larger piece of the revenue pie, since they will be hosting the content within their network. But it will be at the expense of the content providers, which are for the most part five-person outfits based in somebody’s basement or garage. If carriers want to take more of the revenue pie when they host more of the infrastructure functions on their network, that could stymie future development – development that might lead to compelling applications when the networks are ready to carry them and the masses are ready to use them. The question here isn’t about which technology provides the better solution; it’s about creating a sound business case so both the carrier and the content provider communities can receive the maximum return on investment. At this point, it is still unclear whether one exists for either side. Voice minutes will continue to dominate revenue for years to come and wireless data’s share will remain marginal despite wireless web page hits bandied about by the carriers. The wireless voice market in Canada has lots of room to grow, giving the carriers and the content providers time to strike a proper balance in wireless data revenue sharing that will allow the content side of the equation to flourish and give carriers a noticeable boost in ARPU.