In the 2000 romantic comedy What Women Want, Mel Gibson plays an arrogant and sexist advertising executive who basically conducts business with men and seduces women. Although his business is built on women’s products, he has no clue when it comes to actually understanding women. One day, through a bizarre accident with a hairdryer and a bathtub he is given the power of hearing women’s thoughts as he passes them by in the corridor or the street. Suddenly he is completely in touch with “what women want”.
At this year’s MWC in Barcelona, one wondered sometimes if large sections of our industry have equally lost touch with what consumers want. Many of the announcements at MWC involved 3D, HD, RCS-E, Smart LTE, quad-core phones, various “internets of things,” and let’s not forget Nokia’s slightly bizarre 41 Megapixel camera. But all of these seem at least five years ahead of what consumers out there are doing today – texting, downloading a few apps and a bit of surfing on the side (and they are the early adopters!)
This gap between what the industry wants to offer and what consumers actually want, is wide and growing wider. This year, the divide is suddenly more significant because, as an industry, we have reached a tipping point. Existing VAS (Value Added Services) cash cows are now in established decline, and there seems to be nothing new to take their place that consumers will actually pay for. The Financial Times reported on 21 February that mobile VAS messaging revenues (mainly SMS) fell globally in 2011 by $14bn - a 9 per cent decline. This follows a decline in 2010, but this had never happened previously. It is mainly due to the rise of over-the-top SNS and MoIP services (e.g. WhatsApp messages passed the 1 billion-messages-a-day mark some weeks ago).
The point? Realistically, there is nothing to replace these revenues at the rate they are likely to fall.
As John Strand recently surmised: “It is important to understand that the next large growth market is not waiting just around the corner.... prices are generally decreasing. The telco industries in most countries are experiencing decreasing revenues”.
So what do consumers want (men or women)? There are three bread-and-butter pre-requisites for increasing data usage as SMS revenues drop off, and they do not require 3D, 41 Megapixels, or for that matter, a hairdryer.
We already know people respond to simpler billing. Most operators in developed countries can point to success in offering two-play (fixed telephony + internet) and then three or four play (+ mobile + TV) services. People like it when life gets simpler! There are solutions around that address these areas, but simplification in pricing needs to become commonplace.
So, what do consumers want? Well, maybe they will one day want the amazing products announced at this year’s MWC. In the meantime, let’s get going with what we have. It’s not that the three elements above in themselves generate new revenues, but they do begin to dismantle the blocking factors people have around data usage: where they get upset about coverage, are restricted by limited battery life, and simply don’t understand pricing and so are too cautious to discover anything new.
Chris Goswami is director of strategic marketing at Openwave