Does the mobile network standards process inhibit business model innovation?

One of the things that struck me from the LTE summit last week was that the way that some standards bodies operate (notably 3GPP) risks entrenching legacy business models for operators and others.

This is ironic, as many standards groups, staffed by engineering-type people, try and avoid the whole issue of commercial models. This is either because they have limited understanding of that side of the industry, or limited time - or perhaps are worried about regulatory and anti-trust implications.

The problem arises because certain aspects of technical architecture can act as limiting factors. Physical SIM cards, for example, need to be distributed physically. Which means that a customer has to physically go to a store, or via the post. What seems like a technology-led decision can mitigate against particular business models, such as ad-hoc usage - and add in "latency" of hours or days to a process.

Or alternatively, dependencies between otherwise separate sub-systems can cause huge brittleness overall. LTE is being optimised for use with IMS-based core networks. But not all operators want to deploy IMS, even if (in theory) they want LTE - again, restricting business model choices or forcing them towards what is now a non-optimised radio technology.

The insistence of a lot of mobile operators to only view each other as peers (through the GSMA club, and various of its standards initiatives like IPX) is another example. This reinforces the notion that alternative service providers like Skype or FaceBook are *not* peers, but instead deadly enemies. For some operators that may be true, but for others they might be critical partners or even (whisper it) in a dominant role, for which the MNO is a junior part of the ecosystem.

Freezing old-fashioned assumptions into standards and architectures, often without even identifying that those assumptions exist is a recipe for disaster.

This isn't to say that standards are bad - but just that there is often no mechanism by which seemingly-sensible technology decisions are double-checked against potential future business models. Having a cycle in which people ask questions like "Will this work with prepay?" or "What's the wholesale model?" or "What happens if 3 people want to share one 'account'" or whatever would avoid many of these mistakes. You can never account for all eventualities, but you can certainly test for flexbility against quite a range.

Again thinking about the LTE Summit, I did not hear a single mention of the word "MVNO" during the whole event. Nobody has thought what an LTE-based MVNO might look like - or whether there might be cool features which could enable such an provider to provide more valuable services. I was met with blank stares when I asked about implementing open APIs on the radio network, to make it "programmable" for developers or partners. So I guess we won't be getting latency-optimised virtual mobile networks for gaming, then.

Many speakers appeared to view the only mobile broadband business models as traditional contract and prepay mechanisms - no talk of sponsored or third-party paid access. No consideration of the importance of Telco 2.0 strategies. No discussion about where in the EPS or LTE networks a content delivery network might interface, and so on.

One option for fixing this problem is via the other industry bodies that don't set standards themselves, but which can consider use cases and business models a bit more deeply - NGMN, OMTP, Femto Forum and so forth. Perhaps that's the level to bring in these considerations, so that they can then "suggest" specifications for the standards bodies to work to.

How about "Future mobile networks MUST be able to support a variety of MVNOs of example types A, B and C" for example?

On the same theme, I'll write another separate post soon, about why the increasing desperation to get IMS deployed is a particularly dangerous risk to the industry. In my view "legacy IMS" is a set of standards that is not fit-for-purpose in mobile - in large part because it is entrenched in a philosophy of walled-garden business models, rather than built around openness from Day 1.