More than a third of consumers in Western Europe will access the internet from their mobile phones by 2014, according to Forrester Research, while Arthur D. Little predicts that mobile data traffic will grow by a factor of 32 between 2009 and 2015. So with all this good news, is there reason to worry?

At the end of 2009, O2 UK said in order to meet demand for data, it will spend hundreds of millions of pounds on network infrastructure, following a £500m payout over the previous two years. Expenses to increase bandwidth, combined with competitive pricing and handset subsidies could erode operators’ profits.

To offset the cost of expansion, operators are searching for ways to make the most of the existing capacity. Over the past six months, there has been a dramatic increase in demand for web and video optimization, to make streaming and downloading data more efficient and affordable.  
In addition, to boost revenues, the Arthur D. Little report recommends that operators adopt the position of smart pipe provider, so that most of their revenues will be derived from selling data plans and value-added features. As the mobile internet market becomes more mature, more and more revenue-generating services are being deployed.

The evolution of the mobile internet
The mobile internet gateway evolution can be broken down into three phases that address the need for optimization and revenue generation. Today, operators are using mobile internet services gateways to provide data optimization and a basic set of value-added services, including basic content control and web-to-mobile content adaptation for a high quality user experience.

In the near future, new revenue-generating services, including tiered pricing plans, advanced parental control, and context-based targeted marketing, will be launched to provide competitive differentiation. Finally, once the mobile internet ecosystem is fully developed, advanced user profiling and location-based features will be launched that will harness the full potential of mobile browsing. Here’s how this will look in a little more detail…

Phase One – Quality User Experience
Mobile internet gateways that are currently deployed optimize web browsing, video streaming, and P2P (peer-to-peer) traffic to speed up browsing and downloads and provide smoother video. Policy-based mechanisms dynamically adjust optimization techniques according to network conditions, congestion, and forecasted traffic volumes to help alleviate bandwidth bottlenecks, especially during peak periods.

Phase Two – Competitive Differentiation
By enabling subscribers to opt-in for personalized content and services, operators can advise and not advertise, making targeted promotions a welcomed service. For example, users that are browsing for information on their favourite band can receive recommendations to download the group’s latest music video or buy the latest wallpaper from the operator’s portal at a better price, using convenient payment methods. Content providers also benefit, since personalized content is more likely to be shared with friends, especially when subscribers are also using social media on the mobile.

In addition, existing services, such as content control, can be enhanced with an additional level of personalization. Parents can customize access to content for each child based on his/her individual needs and family values. This includes specifying which types of content should be blocked and when children can browse the internet – for example, only after school hours. The same application can also be used to limit Facebook access for employees to after work hours.

Phase Three – Ultimate Personalized Mobile Internet
By opening a new communication channel with their subscribers, operators can enable users to manage their service packages and quotas, and even pay their bills using a mobile internet application. Differentiated pricing plans can be put in place that will adjust tariffs based on individual usage patterns, including the time of day for each service.

Operators can track subscriber quotas over multiple timeframes and service buckets – applying charging, bandwidth, blocking, or other policies when quotas are reached, including custom user notifications and upgrade options.

Advanced user profiling provides insight to users’ location, purchasing mood, social circles, etc. which can be used to address advanced marketing requirements, such as subscriber acquisition, and location-based promotions.

Data Optimization
Subscribers hunger for data is insatiable. As mobile data traffic grows there will be continual need for data optimization for best capacity utilization, no matter how much bandwidth is added.

With integrated social network capabilities, content and promotions selected based on the individual interests of the consumer, and a fast and secure purchasing channel provided by the operator, mobile internet gateways can provide users with a wide range of services with unique added value.
Once the mobile internet has been fully developed, the mobile internet gateway will expand from providing enjoyable browsing to targeted services on the go, realizing the ultimate profit potential of the mobile internet. 
 
Merav Bahat is vice president of marketing at Flash Networks