Jonny Evans: So WhatsApp, Facebook?
At the heart of the $19B WhatsApp acquisition may be Facebook's continuing desire to take over your mobile phone
Computerworld - Depending on whom you speak to, Facebook's $19 billion purchase of WhatsApp is either a stroke of brilliance or a colossal waste of money -- but mobile phone firms face both threat and opportunity as Mark Zuckerberg's network makes its (free) call.
You see, mobile telcos already know they've been outflanked by the big tech firms that now offer key services over their networks. They even have a name for such services: over-the-top (OTT) content. The term encompasses things like iCloud, Facebook, Twitter, Google services, Netflix and many more.
While all these services are different, what they share is that they all make at least some of their money by piggy-backing connectivity offered by the carriers. These services are great for customers, of course, but carriers already recognize the steady erosion of their traditional profit centers: voice calls and SMS.
That's a real problem for carriers, which need new sources of revenue to compensate for the loss of those profitable businesses. Yet OTT operators, like Facebook, offer most of the key services smartphone users choose in this mobile connected age, reducing the value of a carrier's business to that of supplying the pipes.
In conjunction with the need to continually invest in new communications technologies, such as LTE/4G, carriers know they need to find some way to create a sustainable business -- they can't make the kind of profits they need offering mobile bandwidth at an all-in price.
Word from the B/OSS (billing and operations support systems) world is that carriers are well advanced on plans to find a way to make money out of OTT services, using an inherent ability within LTE to limit bandwidth access and tie bandwidth and service deals to individual users and devices. At its simplest, carriers seek an excuse to introduce tiered service-specific pricing schedules in an attempt to supplement their mobile provision revenues.
What does that mean?
It means you'll pay for service-level guarantees for the specific services you like to use. You might add a video services bolt-on, you might pay for guaranteed stutter-free Facebook access. You might pay for WhatsApp, if you want your voice or messaging communications to get around in timely fashion.
Trust me. This isn't a pipe dream. This move to tiered pricing has been discussed within the mobile industry for years. Carriers have sold most of us on LTE/4G services because of its faster mobile broadband, but they want us to like LTE because of its support for a thing called on-device policy control. What that means is that it is possible to charge device- or user-specific pricing for services. You might be watching a video on a train and want it in higher resolution with guaranteed service, and carriers will offer you this. Netflix and others are already reaching deals with mobile telcos in order to guarantee bandwidth to video viewers choosing to watch something on their mobile devices. These deals see a portion of customer charges passed along to carriers in exchange for a service guarantee.
More by Jonny Evans
- The Apple/IBM deal: iOS claims the IoT
- Bankers beware: Technology is going to get you (and none of us will care)
- Jonny Evans: Adobe CS and the dangerous cloud
- The technology world's sexism needs to end
- Jonny Evans: Wearable computing means the death of the smartphone
- Jonny Evans: So WhatsApp, Facebook?
- Jonny Evans: Has Samsung stalled?
- Jonny Evans: Microsoft, the wallflower
- 2014: Does Apple still look doomed?
- Let's put a brake on the real snoopers
- Social Media in Technology: A Unified Strategy for Success Find out how social media is sparking a new era of customer and industry-understanding in technology enterprises and how industry leaders are overcoming...
- Big Data, Big Mess: Sound Risk Intelligence Through Complete Context This paper examines the insecurity of the small businesses in the supply chain and offers tips to close those backdoors into the enterprise.
- Using Cyber Insurance and Cybercrime Data to Limit Your Business Risk This paper examines the challenges of understanding cyber risks, the importance of having the right cyber risk intelligence, and how to use this...
- 5 Tips to Secure Small Business Backdoors in the Enterprise Supply Chain This paper examines the insecurity of the small businesses in the supply chain and offers tips to close those backdoors into the enterprise.
- NSS Labs & Cisco Present: Evaluating Leading Breach Detection Systems Today's constantly evolving advanced malware and APTs can evade point-in-time defenses to penetrate networks. Security professionals must evolve their strategy in lockstep to...
- Will the Real Endpoint Threat Detection and Response Please Stand Up? This webinar explores new technologies & process for protecting endpoints from advanced attackers as well as the innovations that are pushing the envelope... All Social Media White Papers | Webcasts
Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!