With $72 billion invested in mobile broadband it would be hard to argue that this market is suffering from a lack of investment.

More than half of this is taking place in Asia. Over the last two years close to 300 mobile operators in 120 countries have launched mobile broadband networks (using the 3G HSPA technology) and some 70 of these are already planning the next upgrade of their networks using the LTE technology—the first $5 billion of investment money has been committed to that technology.

The two countries that are ahead of the pack in this are—where else but in Scandinavia?—Sweden and Norway.

Japan and Korea are also moving in this direction but they are using different technologies.

Within that same short time period over 200 million subscribers have embraced mobile broadband and, as reported previously, this has caught many mobile operators unprepared. They were still peddling their mobile portals while the apps available on smart phones almost instantly overtook a market that the mobile operators had been trying to build up for ten years.

Because of the success of this market mobile operators are now scrambling to keep up with an enormous demand for mobile broadband access. They are eager to get at least their share of the access market and competition is driving them to charge ever less for simple broadband access. As a result of this the margins available for mobile operators are being squeezed more and more.

Does that mean that mobile operators will be relegated to becoming pipe suppliers? Not necessarily. They have a number of very powerful tools that they can use. They know mobile customers better than anybody else and they are able to provide a very reliable and secure service—so much so that banks are using their networks to deliver financial services. This has built a powerful trust relationship between operators and some very key service providers. The mobile operators are the only ones who have a very secure identity management service on their networks that can be used by these financial institutions, and (if the mobile operators permit) by others also.

Furthermore, mobile networks are excellent for mobility applications such as GIS, location-based navigation, etc. Again, the mobile operators are currently the only ones who have access to this user information.

It then comes down to whether the mobile operators will be able this time around to also develop business plans that are going to make it attractive for other providers to utilise the network. This will require open networks, wholesale, MVNOs, etc. The question is will they indeed this time around do change their business models, or will they again wait for others to eat their lunch.

Mobile operators and their supporters all talk about a range of essential services such healthcare, education, public safety and so on. Lessons learned from the past will hopefully encourage operators to open up their networks to these public sectors. It is not too difficult to predict that, if this does not happen and consumers want to make more use of mobile broadband infrastructure for such services, regulation will be used to force the operators to open up to these new social and economic opportunities.

What might change their attitude this time is the fact that they now nearly all operate in saturated markets. There are very few new users that can be connected—certainly in the developed markets. So today there is certainly more urgency among the mobile operators to change their business models to cater for the new opportunities. Also, it will only be a matter of time before OTT providers such as Google, Facebook, Twitter, Amazon, eBay, Skype and others will have more sophisticated applications in competition with the mobile operators.

One of the main problems still being experienced by operators at the moment is a lack of sophisticated middleware that would allow them to deliver these new applications more efficiently and effectively. For instance, the many BSS/OSS systems within the mobile operators’ organisations are making it very difficult to deliver real-time and on-demand services.

Who will win?

The judges are still out on this. There are the smart device operators like Apple, with their proprietary applications; companies like Google and Microsoft, with devices based on Operating System (OS) innovations; and the mobile operators, who recently formed an alliance to also develop their own apps stores. This broad level of competition will drive innovation and those who are able to deliver the best customer experience are going to be in the lead here.

Over the next few years the mobile market will pass the $1 trillion revenue mark. The stakes are high, the rewards are great, and the future looks very bright indeed. So may the best one win.