With weeks of Hutchison 3’s UK COO insisting that consumers don’t want access to the mobile internet 3 Australia announced that they have opened the wall and made open internet access easier for local subscribers.
According to the report in New Media Zero, Gareth Jones, 3 UK’s Chief Operating Officer, said “People don't want open access, that's not what our customers tell us they want. Anyone in their right mind who tries to do anything on the Internet with a screen that size has to be nuts.”
On September 3, less than a month after the report above, 3 Australia announced the launch of their connections application. "As of today all customers with a Motorola A920 and A925 handset, will have free access to a new application called 'Connections'. This application, once downloaded, allows you to easily switch between Content on 3 and the Internet in one easy step," said the announcement.
The battle of business models between the walled-garden approach and the semi-walled or open approach is raging outside Japan. Apparently it is also raging within 3 itself.
In Japan all three carriers have the almost same approach to providing content: the "semi-walled garden," structuring the universe of available content into approved and non-approved providers. Since only approved providers can charge for the content via the carriers' systems, there are multiple incentives to becoming an "official site".
Official sites are ones that have been validated and approved by the carrier. They are listed on the menu of the mobile carriers' services and can easily be reached by four or five clicks down the menu tree. These sites also have access to the carrier's billing system.
Unofficial sites, that is, unapproved sites without integrated billing, can still be reached, by entering (or bookmarking) the URL. The carrier takes no responsibility for the correct operation or appropriateness of content on these sites. While the carriers exercise strict control over the official content, they do not in any way influence or place restrictions on the unofficial sites.
In spite of all the debate the walled-garden approach has been widely discarded, simply because users don't like being told what content they can and cannot access. However it is true that outside Japan only the early-adopters actually know or realise that they can enjoy a wide world of unofficial mobile internet content.
These business model decisions have resulted in the development in Japan of a huge unofficial content ecosystem which drives well over 60 percent of the data traffic and carrier packet revenues. NTT DoCoMo says that on i-mode there are 4,100 official content sites but approximately more than 70,000 unofficial ones.
In fact the recent announcement that Motorola will release a DoCoMo 3G FOMA handset in Japan next year included a particular reference to the inclusion of the ability to access HTML-based Web sites. DoCoMo phone browsers using i-mode can presently only access a special version of HTML. So DoCoMo is further promoting open access to the mobile internet.
3 UK will open up walled garden to content owners
See this New Media Age, 09 September 2004 article.
Most carriers outside Japan offer a walled-garden approach because they want more control of the quality of the content, yet in taking control they place themselves in an invidious position.
Adult services, chat and gambling are lucrative sources of operator revenue, for example Italian operator Wind is deriving up to 80 per cent of data revenues from its sex channel, dating and flirt SMS services according to a report from research company Current Analysis.
But in the main operators do not want to be legally responsible for such content and they don’t want to associate their brand names, especially the global brands, with such content. Therefore they have to in effect create a semi-walled garden and push the less reputable content outside of their branded portal. (This doesn't absolve them from the social responsibility as guided by “codes of practice” in most countries.)
The is no right answer, because what works best depends on the maturity and expectations of consumers, the rate plans and data traffic plans, and the evolving community expectations derived from the experience and mistakes made by fixed-line ISPs.
However as a general observation the walled-garden model is least likely to succeed in the medium to long term, and the eventual model is likely to settle on a semi-walled garden with considerably more content filtering and carrier responsibility for self-regulation than in say the current DoCoMo i-mode model in Japan.
To understand better the i-mode business model see my related blogs on imodestrategy.com and DIblog.com:
Ca va? DoCoMo's i-Mode Clone Grows Quietly in France - hereWhat do you think is the most effective business model for content and why - where and when does the walled-garden have its competitive advantages? Post your Comments.
Telstra's 3G Decision - Where the Analysts Missed the i-mode Play - here
Aussie Commentators Scatter as Telstra Endorses 3G - here
Who's who in the Zoo of Hutchison 3G in Australia? - here
How to Build Your Linkedin Business Network - here
Why the Open Mobile Terminal Platform Alliance is a Win for the i-mode Business Model - here
Why the Analysts Have It Wrong About Telstra's new i-mode Alliance - here
How to Redesign the i-mode Sales Process for Success - here
Sourcing Strategies for Telco IP Core Network - here
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