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Operator greed kills online services

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Ninety-five percent of mobile services fail in the market - and it's thanks to greedy network operators who have treated their customers as a lumpen mass.

That's according to Steve Dietch, the chief marketing officer of HP's OpenCall group, which sells communications software to telcos and represents a third of HP Software's revenues.

"Compared to Japan and Korea, operators in the US and Europe have taken a disproportionate share of the revenue - as high as 70 percent - then they're surprised that they're not getting good content developed, or that developers are going out of business," he added.

"95 percent of what's being offered is failing. I think the operators realise something has to change, and that they've been a bit too greedy."

Dietch said mobile operators have spent too much time trying to compete with content providers and not enough on monetising their own unique capabilities, such as knowing the user's location and at least something about their availability.

Content providers and carriers alike focus too much on the 18-25 age group and not enough on older age groups, he continued, even though the latter have more disposable income. Plus, they blast content and adverts out, instead of using the information they have to target it properly.

"Our focus is helping telcos avoid becoming dumb pipes and use their networks to their advantage," he said. "The operators are the only ones with a direct touch point and understanding of the customer. But they don't do understanding well - they tend to treat everything as a mass market.

"The big reason services fail is that you tend to deliver the wrong content. We're trying to move from a mass market to the individual."

He claimed - perhaps just a tad optimistically, given all the earlier evidence of operator greed and ineptitude - that advertising to the individual could mean fewer ads, not more, as they'd be better targeted.®

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