The phrase, “build it and they will come” has been used to justify the creation of everything from shopping malls to communications services. Yet, if a new report from consultancy Arthur D. Little is correct, many telecom companies are unwilling or unable to go out on a perhaps not-so-thin limb when it comes to mobile information-sharing services that fall under the “Web 2.0” umbrella.
Arthur D. Little analyst Martyn Roetter said in the report that Web 2.0 services—which enable the creation and distribution of content instantaneously and globally in a way not previously imagined—are a key driver of today’s Internet growth, yet telcos are not jumping on board.
“In order to harness and monetize Web 2.0 the Telcos will have to rapidly address the needs of this community,” Roetter said in
the report.
Roetter included this example of why telcos should be capitalizing on Web 2.0: “Younger Europeans are already showing their readiness to interact on the move, with 38 percent of them accessing e-mail from mobile devices, while
Google launched Gmail for mobile in November last year. Telecommunications businesses now need to offer access to the established web 2.0 services, for both communication and for the fulfillment of their wider social needs while on the move.”
So, the question is, if telcos
aren’t joining the mobile Web 2.0 revolution, why not?
According to the Arthur D. Little report, telecom companies face a dilemma regarding Web 2.0 that they haven’t yet resolved: “whether to collaborate or compete with the newly emerged yet de facto web 2.0 leaders (flickr etc) and face the long haul choice of building competing communities or taking the reduced margin implied from partnerships with existing players in exchange for more rapid access to larger communities.”
AT&T is one example of a telco that took the latter path by partnering with MySpace and hopping on for a ride with deals included in 3’s X-series portfolio (which includes companies like Skype, Google and YouTube). Arthur D. Little’s report suggests that AT&T’s approach, while growth-oriented, is considerably more risky than what’s known as the “bit-pipe” solution of focusing solely on pure bandwidth delivery rather than services.