What Do Mobile Operators Need to Do to Survive?
GartnerG2 outlines a realistic 5 year strategic evolution
October 31,2001 - With the European telecom industry rife with debts caused by investments in 3G licenses, massive job cuts, and depressed share prices, mobile operators are well aware of the urgent need to create new revenue streams to survive the $100 billion investments made. However, according to Adam Daum, Vice President and Chief Analyst at GartnerG2, the majority of operators lack credible business plans and a central vision of where they need to be in 10 years time to make sense of their 3G investments.

Daum advises operators to exploit the global payments market, which is worth $300 billion per year through a 5-year evolutionary approach that will completely change consumers' attitudes towards mobile phones.

By 2006, important consumer segments will be using their mobile phone instead of cash when paying for many low-cost items such as cinema tickets and at vending machines; but increasingly also instead of credit cards for higher-value transactions such as travel and groceries.

GartnerG2's research shows that consumer attitudes are not a barrier to this strategy, partly because most mobile payments will be local rather than remote: this avoids the home delivery problems that have damaged PC-based e-commerce over the Internet.

There are many recommendations for mobile operators to focus on in the next 5 years, however GartnerG2's top three recommendations for their immediate focus will be to:
  • Develop a functional partnership strategy, making sure they are seen as "easy to do business with", providing a platform for third party content and service providers. There are several options to achieve this. One option is to set up a wholly owned- subsidiary or another approach would be to outsource to companies such as AOL or Yahoo who have experience in 3rd party content. The more favoured recommendation is for mobile operators to decentralise and create a platform that would follow the same principles as the Mintel in France, where it will be easy for service providers to set-up with even a 386 processor PC.
  • Develop new services and advertising on turning the mobile phone into a decision-support tool. Customers will find value in services that include, traffic alerts or stock price hints saying hold or sell. Customers should be able to personalise what they want on a web site.
  • Deliver mobile payment services using today's technology, and of all target markets available operators need to concentrate on signing up young people (16-24s).

"Mobile operators should not be fooled that there is a quick fix to their problems. This is a realistic strategy, but not a simple one", says Daum. "Mobile operators need to start now to build the partnerships, customer loyalty and trust necessary to capture a slice of a very lucrative market."

GartnerG2 is a new research service from Gartner that helps business strategists guide and grow their businesses. For more information on the report visit www.GartnerG2.com.

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Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions consist of Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner, Inc. is headquartered in Stamford, Connecticut, and consists of 4,300 associates, including 1,200 research analysts and consultants in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com.

Contact:
Laurence Goasduff
Gartner
+ 44 1784-487-195
laurence.goasduff@gartner.com