Juniper Research published a new report claiming that operators (MNOs) will need to change how they work with mobile content if they want to avoid being dump pipes in the future (quotes from their press release):

A new study from Juniper Research has found that Mobile Network Operators (MNOs) will need to fundamentally change their mobile content business models by emphasizing ‘shared value creation’ in order to avoid becoming ‘dumb pipes’ in the future. Only if they can transform their businesses into ‘smart pipe’ service providers, can they significantly increase their income from mobile content – estimated at $23bn in 2008, rising to $52bn by 2013 according to Juniper.

The global mobile content market will be worth $167bn by 2013, shared among players such as MNOs, Content Providers and third parties such as content aggregators and billing companies.

Currently MNOs take a significant percentage of the revenues generated by Content Providers when they use their networks. This has resulted in high prices for end-users and consumers being deterred from accessing mobile content on a wider scale. This unattractive situation has become a disincentive for MNOs and Content Providers alike, with some Content Providers attempting to bypass the MNOs or exit the sector altogether. Clearly, the situation needs to change. But it will be down to the MNOs to make the first moves, says the report.

The report examined 3 main scenarios that can effect operators and the whole industry - the Dumb Pipe, the Smart Pipe and On-Portal. the report author, Andrew Kitson, was quoted saying:

“One single scenario will not win out since different business and revenue models have to co-exist in the mobile content market. Players will adopt multiple approaches that best fit their markets. Crucially, if MNOs are to benefit financially, they need to move away from their Dumb Pipe roots to the Smart Pipe model, though they will clash with the content providers which already dominate the Smart Pipe. A compromise needs to be found.”

Kitson also found these:

• Under the Smart Pipe model, MNOs will not see their share of the overall mobile content market rise appreciably, but revenue will rise in value by 125% over the 2008-2013 period.
• Under the On-Portal scenario, content providers will see their share of the market rise from 54% in 2008 to 68% by 2013, providing they can secure more attractive terms from MNOs.
• Third parties – especially aggregators and billing service providers – will come under pressure from larger players (such as MNOs) seeking to achieve horizontal integration and economies of scale.