Mobile data services: Challenges and opportunities

As I take a look at the local mobile application emerging market and use of cell phones, I will start by warning our mobile operators that their business can be easily shrunk by highlighting the threat in Bill Gates and Craig Mundie statements. “PC is the phone and phone is the PC.”and “People in those rural environments are already buying computers. They happen to call them cell phones.”

Zimbabwe, with a total population of just over 11 million boasts of about 8 million mobile phone subscribers. But that certainly does not mean that many computing devices are Internet –able? The fact remains that most of the Zimbabwean mobile phones are used just to make and receive calls.

If we leave out the tiny percentage of users with Smartphones, the majority of the Zimbabwean users face serious problems in using their phones to access Internet services. There are many challenges in making the mobile phone being used an Internet enabled computing device.

The first problem is data connectivity; the current options, in the mind of subscribers, are far too expensive, slow, and unreliable. The problem starts with simple things like Internet or GPRS settings on the phone. They just don’t work in spite of many calls to the operator call centres. If you get the data connection to work, you would still find it expensive and mostly unusable because of the slow and unreliable connection.

The second problem is the prevalent complete mistrust about the mobile operator’s Value Added Services offerings. This is both from the subscribers’ perspective and third party developers of value added services. Even the Telecom operators know it and can admit it. They have abused value added services. For example, as a subscriber, if you subscribe to a service, it’s very difficult to unsubscribe.

For developers, it’s not clear what the operators’ terms and conditions for developing services over their platforms are. In cases where terms are made available, the market has not matured yet to make it clear how to protect oneself against unethical behaviour by the operators. Say if an operator rejects your solution in favour of one developed by a friend of their business. Or worse, if they just reject a solution for unclear reasons then go ahead to ‘steal’ and develop a solution based on a similar concept. Or even if they retain more than a lion’s share of the revenue from the service.

There is of course the problem of awareness of the existence of advanced mobile applications and services. Most of the users are unaware that there is a decently powered Internet browser on their phone. Currently, the operators are too busy acquiring new customers with different calling plans to bother about spreading the awareness of Internet like value added services. Once the subscriber numbers start to plateau off and unlimited calling plans are in place, the operators will have no option but to start promoting data services to improve their Average Revenue Per User (ARPU)

The good news is that, in spite of these challenges, the mobile data services usage is increasing by more than 100% year-on-year. This kind of growth has become possible due to the fact that the prices of GPRS or data enabled phones are falling very rapidly. Today one can buy a phone with good-sized colour screen and GPRS for as low as $50. Mobile operators are also waking up to data services usage.

It’s probably not easy being a mobile operator with 5 million subscribers in such a small economy. For one, when you make a mistake, there are about 5million people who notice it and complain. Throughout the course of their relatively short time in operation, the mobile operators have made several wrong turns and they are geared to continue as indicated by the approaches they continue to apply when they bring a new service.

They never learn from their mistakes. Here’s a look back at the unpopular overcharging, cross lines, dropped calls, slow Internet connectivity, and network unavailability problems that have made the country’s biggest and most popular operators frequent targets of criticism.

Our country’s mobile network is far from perfect and as they continue to think they are and forget that the revenue generated from voice is clearly diminishing with every passing day, the operators will be forced to explore new areas of growth through continuous real innovation in technologies and services. The operators should focus on services other than the traditional voice based services so that they can generate greater revenue for themselves and most importantly do what they don’t take serious that is keeping the subscribers satisfied.

As the market continues to be more competitive and moving fast, operators are not only facing the challenge of competing with low cost VoIP solutions but are also continuously struggling to retain their existing subscribers. All operators have still not been able to implement a long term data services strategy, with the result their mobile play is still primarily focused on voice.

I am sure if voice revenues start falling, it will mean that operators will start to see data as the future? From what I’ve seen data is still such a small part of overall revenues for MNOs that it’s not seen as core to their business.

As the ARPU on voice continues to decrease, data has become the most dominant factor for operators in retaining and attracting the customers. The key factors which have complemented the growth of data services in developed countries are the increasing capabilities of mobile phones, faster technologies like 3G and mobile applications that bring a rich user experience by changing the way people live, work and play.

The other issue is in developer applications that are too tied to a network. We have seen some services in the press that are said to be only available on certain networks. Due to various political, economic and competitive landscape constraints, it’s very hard to unite all the stakeholders in one place and develop standards for content developers locally. Otherwise we can rightly say that lack of standards will remain the biggest hurdle for the content developer community.”It’s time some of these walls are broken down.

I hope after their evaluation, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) will stick to their word and soon crack down on mobile phone operators following numerous complaints from the public about the quality of services, vis-à-vis costs e.g. why would my unit cost for a call to the same network include termination charges.

I would like to remind all the mobile operators that being a customer of their service is a choice and therefore people can switch anytime. They must strive to make people continue to choose them everyday. Their assumptions about the subscriber’s assumptions when they fail to deliver might be incorrect. They certainly need to work to improve service delivery to make more people comfortable to subscribe to their service.

I am always happy to make the record straight about how we feel about their arrogance when I visit the operators’ offices. The response is always some dismissive arrogant answer. Sometimes I just comfort myself that most of agents on the front desk do not understand what their actions and words mean to the business, but at the same time it tells me something about those at the top of the organization.

To conclude, our mobile operators must view the Zimbabwean mobile application market as a big opportunity rather than a challenge. There are still the hurdles of ease of use, awareness, slow speed of connections, and pricing that need to be overcome for mass adoption of mobile data services. Most importantly, locally relevant content in local languages will be the key to grow the mobile data services market in Zimbabwe.