Mobile companies better off as conduit rather than content provider

The mobile telco's main asset, and selling point, is the knowledge and trust of its subscriber base, Kai Rannenberg says

Mobile phone companies are likely to fare better as intermediaries between professional content providers and the user than trying to be content providers themselves, says German digital mobile-device expert Kai Rannenberg, who visited New Zealand last week.

The mobile operator’s contribution to the value chain lies in its contact with its customer base, knowledge of their demographics and even their location from minute to minute and its status as a “trusted party” in the eyes of both customer and service provider, he says.

Rannenberg holds the chair of mobile commerce and multilateral security at Frankfurt’s Johnn Wolfgang Goethe University. He visited New Zealand by arrangement with the South-East Asian Regional Computing Confederation (SEARCC) and its local representative, the New Zealand Computer Society.

In a series of seminars last week he covered a broad spread of topics, from the economics of mobile data to technical aspects of security in the mobile phone and PC internet environments.

He described a number of commercial and experimental uses of mobile digital technology, from music on demand through marketing based on the user’s location to a fully-fledged GSM mobile banking system mediated by T-Mobile in the Czech Republic. Used by seven banks, the scheme provides for payment for internet services, as well as for banking transactions.

This naturally requires strict encryption and identity managment, and today’s mobile phones are quite capable of this degree of protection, Rannenberg says. The SIM card provides an in-built proof of the identity of the phone’s legitimate owner and additional security measures, ranging from a simple PIN to a challenge-and-response system, can protect against misuse arising from loss or theft of the phone.

Mobile use is subtly psychologically different from PC-based internet use, he says, music provides a striking example. While internet users will try hard to acquire music tracks for free and complain about the recording industry’s protection of its intellectual property, those same users with a mobile in hand have for years cheerfully been paying the equivalent of about NZ$4 to download a ring-tone.

Part of the appeal, Rannenberg suggests, is immediacy. Users are pleased to pay so they can demonstrate that they have the latest tunes and can find and play them on demand “to impress the element of the opposite gender.”

The ever-more-capable mobile will, in due course, be as plagued with viruses and spyware as the PC is, Rannenberg says. Yet he knows of only one firm, in Finland, that has produced a firewall and virus-checker for a mobile hand-held device and that is offered as a paid option not a basic feature of the system.

Virus propagation will probably be slower in the mobile world, he says, because no one operating system has a lion’s share of the market as Windows has on the PC.

He declined to give a comparative estimate of the vulnerability of the various operating systems, but says it would be unfair to see the mobile version of Windows as necessarily weak. “It’s based on Windows CE, which is quite a late version of the operating system,” he says. And, it is a cut-down version which doesn’t have some of the sophisticated and potentially vulnerable features of the PC implementation.

Personally, he says, he would prefer to use an operating system like Windows whose basic structure he knows, rather than something like the BlackBerry’s, which is proprietary and kept secret.

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