SIM technology can help carriers compete with smart phone vendors for apps revenue: SeaBoard

Wireless carriers have been losing control of applications-related revenue to the apps stores launched by smartphone vendors such as Apple and Research In Motion, but a new report from the SeaBoard Group says carriers can stem the tide if they adopt new device and application management software on SIM cards. The telecom consultancy sees the SIM card as a “key ingredient in any plan for wireless carriers to win back control of the wireless economic model from smartphone vendors and boost overall average revenue per user (ARPU). Despite the increasing numbers of smartphone users in Canada, conventional cell phones will continue to rule the wireless universe and the adoption of innovative SIM card technology opens up tremendous revenue opportunity for wireless carriers, according to the report, Herding Cats: Managing a Wireless Community. “Device management is the key to help carriers reclaim the high ground of value added services from the smartphone boutiques that threaten to displace the carrier from the key place in the economic equation,” reads the report. SeaBoard’s Iain Grant says the technology won’t enable carriers to fully reclaim control over applications and thus revenue from smartphone vendors, but it will provide an important way to boost ARPU. “I’m not so sure that you can ever wrestle back the genie once it’s got out of the bottle, but on the other hand there is still the other 85% of all devices that aren’t smartphones,” he tells Report on Wireless. “And if you can find a way of energizing those subscribers to stimulate your ARPU, I think that you’d be thought of as a marketing genius.” The report highlights two ways that wireless carriers can improve revenue through the use of SIM card technology. One is cooperating with third parties to develop applications and services that will appeal to all wireless subscribers not just smartphone users. The other is pushing data packages to roaming customers, an idea that was explored in Report on Wireless in September. The ability for the carrier to develop a mobile payment mechanism in conjunction with a bank and retailer and have it pushed out to all wireless customers over the air is one way the wireless operator can expand its applications revenue. “A carrier solution that embraced all the wireless devices on a carrier’s network would, by contrast, have a much broader local market reach. It would be far easier to entice a bank, or a local retail chain, to be a carrier’s partner in a given market if access to the entire base were on offer, rather than a specific smartphone subset,” states the report. Grant suggests that Rogers Communications Inc. would be the biggest beneficiary of this type of technology because the new entrant wireless players will be fixated on attracting subscribers and Bell Canada and Telus Corp. will be preoccupied with switching over high-end users to their recently launched HSPA networks. He says Rogers could leverage this new SIM card technology to sell value-added applications and services to non-smartphone users, which in turn would boost ARPU. If Rogers could push a value-added application or service to a user, it would start to “capture some of that smartphone revenue that would otherwise have gone to somebody else’s portal and would not have flowed through Rogers,” explains Grant.

SIM technology can help carriers compete with smart phone vendors for apps revenue: SeaBoard

News | November 11, 2009

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