How to learn to stop hating the cellular telephone industry

Published by Martin Kleppmann on 21 Feb 2008.

John Crowcroft (a leading authority on communication systems, and a former lecturer of mine in Cambridge) has written a short informal paper on new directions in mobile communications. It is sub-titled “How to Learn to Stop Hating the Cellular Telephone Industry”, and more informally sub-titled “Rant about the cellphone industry’s failure of imagination”.

The paper draws analogies between the history of the internet (which has been absolutely astonishing over the last 30 years) and what the mobile phone industry could have done in the same time, had it taken the same sort of approach to innovation. Instead, the mobile telephone operators chose to lock down their systems, tightly control everything which goes in and out of them, and as a result have hardly experienced any innovation at all.

The key problem appears to be the fact that the telecoms companies have made a LOT of money from massively restricted services in the past, and they are continuing to do so today. If they open their systems and make it easy for third parties to provide services on top of them, they are probably going to lose some of that revenue in the short term. What they don’t realise (or do realise, but don’t want to face, for business or organisational reasons) is that they could make MUCH MORE money in the longer term by having an open system and providing great innovative services on top which people will happily pay for! The internet has proved that there are thousands of business models which are not only viable but actually extremely lucrative. You just need to be bold enough to take the risk of opening your systems to the competition.

Fortunately, there is a bit of movement – European mobile networks have at least made a few attempts at being reasonably open, and the US is gradually catching up too. But still it’s two steps forward and one back. Plenty of new devices (notably the iPhone) are still locked to one operator and don’t allow third-party software to be installed (unless you jailbreak it, of course). Eventually, we will probably get the same sort of innovation on mobile as we are getting on the internet, but it’s not going to be that quick.

Check Jon’s paper for a few business ideas, and then form a start-up. The more people try to make it happen, the more pressure there will be on the operators to open up, on the handset manufacturers to become compatible, etc.