I think the root cause of the mobile operators failure (apart from one notable exception) to innovate lies in the history of innovation (or more importantly lack thereof) in its core product - Voice.
The various air interfaces can all be traced back to the various equipment manufacturers
*1G – Analogue – Motorola;
*2G – Time Division – EU drove Nokia, Ericsson, Alcatel + Siemens or vica versa; and
*3G – Spread Spectrum - Qualcomm
Less controversially, if we get further back in time, the godfather of all the technologies was probably the US Military (more about the Godmother of 3G tomorrow night)
The backhaul and supporting systems can hardly be differentiated from the fixed line equivalents.
The big innovation in payments was the introduction of prepaid, which really was just a better version of the fixed line calling cards. And even then most of the incremental innovation was done by IT system integrators.
Intelligent Networks originated in the fixed line world and the most successful application is non-geographical numbering, which is now absorbed into the core network. In the UK, the mobile operators use intelligent networks to charge a non-intelligent price structure.
WAP was designed by committee and probably won’t even survive the encroachment into the wireless space from the all powerful and conquering IP stack. I know WAP is not a voice service, but it gives a clue to the success ratio when everyone gets together to set a standard. A more topical example is here
Can anybody think of one single successful voice innovation that emanated from a mobile company? For sure, many people at mobile operators played a huge part in testing of innovations and getting them to be deployed to mega-millions, but there is a big difference between that and creating something.
I think this points to the fact that one of big obstacles to innovation in the operators are the executives themselves who grew up and got rich implementing and selling other people’s technology.
When you have the largest mobile operator in the world openly discussing outsourcing IT operations – what hope is there for Vodafone to compete with the Google, Microsoft, Ericsson, Nokia & Qualcomm’s of this world in the battle for the maturing mobile value chain?
The executives and network engineers can all get together at IMS conferences and say “This time it will different…”, but some people remember the past hype about Parlay and battled with some of the equipment providers to get some of mysteries of the HLR/SS7/handset/(choose network element) interfaces revealed. Personally, I think IMS is just v3.0 of the Intelligent Network (v2.0 being Parlay). It will not be different this time even if the toolkits are the simplest to use in the world. Mainly because ultimately the big network operators just do not have innovation in their bloodstream.
I also point people to one of the most profitable accidental innovations of all time: SMS, which was designed in a committee as an aide for business. I’ve yet to read and hear of anyone who realized that it would be taken up by the youth of today. What is exceptionally funny about this innovation is that not only the network operators missed it, but the equipment providers themselves missed it. Arguably the biggest beneficiaries were Logica and CMG who both ending up merging to protect the SMS riches from the salivating network equipment providers.
Personally, I think something similar which happen in the IMS world: there will be an accidental break through and out of the thousands of people developing solutions something by someone will innovate something interesting. Throw enough sh*t and some of it is bound to stick. However, this someone is more likely to come from the Web2.0 world and the company will immediately be snapped up by Google, Yahoo & Microsoft.
I agree with Martin Geddes
about the power of presence (his is also probably the world most interesting blog on voice), but really it has been around forever in the internet world – why is it not on every handset? I’m sure a lot of the real reason is that there is a lot of executives arguing about cannibalization of voice-mail revenues.
In truth, I see a more direct analogy between the mobile operators and music industry. Both had lucky profitable breaks (e.g. the CD in the music biz and SMS in the mobile biz), both will deploy huge reams of lawyers to protect their distribution channels, both will grow via industry consolidation and buying up innovators (Service Providers / MVNOs in the mobile space and A&R execs / Small Labels in the music biz).
Perhaps that’s why they spend so much time speaking to another and stroking one another’s egos rather than getting back to basics and developing new products that will excite the world.
The notable exception to all of the above is of course DoCoMo, but that is for another day. In order to compete against them, perhaps the most interesting mobile operator of the future will be Softbank, I wouldn’t bet against it…