Eurocomms.com: Some operators are looking to differentiate themselves by offering own-branded cloud storage as a value-added service. What’s the business case behind that move?
Stephen Waldis: There are two trends shifting the landscape of the consumer mobile industry.
First, the weakening of consumer loyalty to specific operators.
In search of greater flexibility and affordability, consumers are increasingly buying mobile devices outright (often direct from the manufacturer) rather than accepting operator subsidies in exchange for a long-term contractual commitment.
Operators are not the ‘one stop shop’ they once were.
Second, there are the challenges posed by the ‘content explosion’ taking place as devices become more and more sophisticated: storage capacities have largely failed to keep pace with consumers’ voracious appetite for creating content on their mobile devices.
Consumers – almost half of whom have no off-device storage in place - increasingly have to make decisions about what content to keep and what to delete.
In this shifting landscape, operators must add value for existing and prospective subscribers, keeping them ‘sticky’ and reducing churn.
Previously, these efforts might have focused on offering discounted cinema tickets or bundling premium streaming service memberships.
Now, however, personal cloud storage and content management presents a massive opportunity for operators to keep consumers engaged.
Locking subscribers into an ecosystem by helping them manage their spiralling volumes of data could be much more effective than established, potentially faddish, incentives.
Cloud services might be good for reducing churn, but can they ever be viable revenue-generators in their own right?
It would be easy to see cloud services as simply a “me too” offering for operators, but they can - rather than just reducing churn - be a viable revenue generator in their own right.
One area of focus for monetisation is the opportunities that cloud services offer operators to build meaningful brand partnerships and expand their ecosystem of value-added services.
Opening up APIs and SDKs to third-party developers can create new revenue streams in areas where the operators themselves lack the necessary specialism.
But the benefits of cloud services for operators extend beyond direct monetisation.
There are considerable productivity and profitability benefits to be found.
On the one hand, having subscribers use the cloud to backup and transfer content, operators can reduce the in-store time spent transferring content from a subscriber’s old device to their new one when they upgrade, freeing up store staff up for other tasks.
On the other, operators save time by not needing to install and use slower and less efficient cable-based content transfer boxes.
How can operators convince customers that they a) need a personal cloud service, and b) should take such a service from their mobile network operator?
The velocity of the current mobile consumer content explosion means that subscribers won’t take much convincing at all.
A recent study conducted by 451 Research revealed that most popular smartphones with a 16GB capacity were close to being full or actually full.
Consumers crave a simple solution to their growing storage needs and their operators are set to deliver the most logical solution.
There are two drivers behind this. On the one hand, there is the quality of experience that comes with a unified service.
On the other, there is convenience: operators can automatically enrol a subscriber onto their cloud service at the point of device activation – something that still predominantly takes place in-store.
Should operators have any concerns about managing a cloud service for consumers, particularly when questions of data privacy and hacking have rarely been more topical, or the consequences of breaches more severe?
It’s important, of course – especially in the current climate of heightened awareness around issues of privacy and security – to work with an experienced vendor with a strong track record of best practice.
But operators shouldn’t have trepidations about seizing the opportunities of cloud services.
They are actually in a stronger position than they may realise when it comes to preparedness for launching cloud services: after all, the entire business of a mobile network operator is built on the fundamental ability to provide rigorously secured connectivity.
Assuming that operators are able to establish a foothold in the cloud storage market, what kind of innovations can we expect to see in their services over the next five years or so?
The ace in operators’ hands may not necessarily be their personal cloud services themselves, but rather their ability to seamlessly and securely support multiple devices and services.
Over the next five years, the Internet of Things should finally become more of a practical real-world proposition than the theoretical phenomenon it has been thus far.
Wearable technologies will become more convenient and prevalent as mainstream consumer use cases and more sophisticated niche applications alike become clearer.
The networked home and the connected car will be realistic prospects for the average user.
All these developments will make demand for storage all the more intense, and providing a convenient unified service will be crucial.
This is where operators will have their chance to shine, with their ability to provide such a service with a tight grip on security across all elements.