Sean Blagsvedt is the CEO of Babajob.com, a web and mobile portal focused on the informal job market in India. He blogs here, and is @SeanB on Twitter. In this guest column, he writes about enabling telecom services from a developers perspective, that could help foster a more vibrant telecom services ecosystem.
In general, telco folks don’t think about their assets the way Google, Apple and Microsoft think about theirs. Namely, how do I leverage my assets and offer them to other businesses that bet their livelihoods wholly on top of the hard problems I’ve already solved. To name some examples, Apple solved the micro-billing, device compatibility, application-update and consumer trust problem for application developers with uniform rev-share billing APIs, a limited number of handsets, background updates and rating systems available from launch, respectively. No carrier has arguably solved any of these problems for their mobile developers. Instead in India, they have created a market for non-SMS VAS applications that primarily have little utility and frankly hover at 4% of revenue only with excessive promotion and tricky subscription billing schemes that users often accidently turn on and are difficult to turn off.
It’s not just an Indian problem though; by not focusing on providing platforms that enable developers to write interesting applications on top of them, telcos have essentially made the choice of carrier into a dump-pipe, commodity game – which network has the cheapest, most reliable voice and data service – rather than which network has the best apps?
But telcos have solved many of the hardest problems facing smaller businesses today and I’ll argue that enabling the telco as a platform is the key to unlocking their next wave of revenue for phone companies.
1. Expose the location data (it’s already available anyway)
Telcos have always known where your mobile is – how else would they be able to route a call to the right red and white eyesore (aka cell tower) on your way to work? Mobile location-based scenarios have been discussed for 15 years but it’s only in the last 2 years that these applications have seen any significant user adoption (e.g. google maps on smartphones, foursquare). What’s ironic is this generation of location-based apps entirely ignore (via GPS) or reverse engineer the telco’s location data by measuring the signal strength of nearby towers and then look up where the towers are in databases maintained by Google, Microsoft, Navteq and others. In other words, if your phone has a data connection, any application on it can roughly determine where it is without the telco ever being the wiser. Thus, the location data that telcos always sought to charge app developers for is now free. Furthermore, other business models have developed around local apps that the telcos will never share in (imagine paying your phone $.50 per foursquare check-in).
But ultimately, these methods are work-arounds and limited. GPS and cell-tower triangulation does not tell an app developer anything about where all the phones are in a general neighborhood, what the car and traffic patterns are or how many people actually attended a given concert or movie– all things the telco actually knows in its data centers but only exposes when the bomb-squad comes knocking.
Thus, my free advice. Provide a set of free, secure, cloud-based, use-limited APIs that aggregate where all the phones are and APIs that streams a given user’s location (with their permission of course). If an app developer makes more than 100 million reads, you know they have a business model and then start negotiating how much you should be paid.
2. Expose the social graph: It amazes me that the telcos have always had the most interesting social network graph – the people I call – but it took a geeky twenty-something to turn that social graph data into a bazillion dollar business called Facebook and then enable “viral spread” to spawn other billion dollar businesses like Zynga. Clearly, the telcos missed the boat on this one.
But all is not lost for our friends with spectrum. Combined with location data and verified contact data (see below), the social graph created by our call patterns arguably still represents the most accurate representation of who is important to me. Obviously, app developers should be able to leverage this data as easily as they can call the FBAPI or Google’s opensocial.
3. Provide open, uniform billing for non-phone SIMs: We’ve reached the stage where it makes sense for lots of devices to have wireless data connections e.g. Kindles, iPads, cars, my keys, my dog’s collar or any object of value (so I can track and find them). It makes less sense that consumers have to pay a monthly data subscription plan each of these devices, especially if the amount of data they use is small and their utility is narrow. Unfortunately, there’s no easy way that a small developer or device maker can simply buy a small set of SIMs – say for a $7 a piece – that are authorized to send or receive 1GB of data and have a lifetime of 5 years. As a small developer, I should not have to negotiate a deal with someone inside a telco’s biz dev team (as Amazon has with the Kindle), to build a few thousand devices with a wide-area data connection. Give the developer community simple, ease-to-use data pricing for devices that can be applied to any SIM, and you’ll see that wirelessly connected devices will explode on a per capita basis.
4. Expose the retail and digital payment system: I like to point out that the American Internet is the cheapest place to buy anything on earth. There are lots of reasons for this but one of biggest contributors is ubiquitous digital payment instruments – credit cards, paypal, etc – along with cheap shipping and low tariffs across states. In India though, if I make a physical or digital good, I can only really sell it broadly if I have the ability to collect cash from my customers. This is hugely annoying to a digital company such as Babajob.com or Cleartrip, given that less than 3% of India has a credit card. Flipkart is arguably solving this problem beautifully by sending a dude on a bike to my house to collect my cash payment when they deliver a $3/Rs 150 book, but really – does every online company want to re-create its own nation-wide cash collection network of guys on motorbikes?
Now, the telcos arguably have the best network of cash collectors in the country – literally 2 million tiny shop owners make their livelihoods earning Re1($.02) on Rs 50 ($1) mobile recharges. Of course, it’s difficult to organize but there’s no reason they could not turn 50,000 of those guys into the 7-11s of Japan – where products get delivered to a nearby corner store and consumers walk down and pay a fee to pick up the product. Especially for digital products like services or tickets, it’s easy to imagine a simple system where any consumer can give their recharge shop Rs 300/$6 for a product (with a known unique number) and the telco takes 5-7% of the transaction (which is what most Indian credit card processors charge). Just as early mail order companies drove their customers to use MasterCard and Visa and ebay drove users to paypal, 100,000s of businesses would drive their customers to particular telco recharge stations if they could leverage them to collect cash at reasonable rates (rather than the 80% rates that VAS companies live with today).
5. Expose your verified profile data: The next five years in India will see a hugely important rise in verified user data. Very soon, in order to get a SIM, you’ll not only have to give proof of your address and a government ID (as you need to provide today), but also a biometric UID-mandated finger-print and eye scan. This data collection will be mandated by the government (because it’s really handy in tracking down terrorists) but the data is incredibly useful for anything that requires trust among people. This includes job profiles (where I’m absolutely positive we at Babajob.com can help job seekers earn more from employers if the employers know they are verified individuals with known addresses) but also enables a host of other vitally important trust-based services like credit-agencies, loans to individuals (rather than self-help groups), etc. There are few initiatives that could transform the economic potential of India as greatly as better trust and verification systems. If the telcos can state their users are verified, UID citizens, capable of signing contracts (where default suddenly gets much harder), it massively increases the value of their customer database for almost any business.
The first Indian telco that creates a scalable, simple, near-free verification and profile data reuse API is the telco that gets to be the backbone behind conceivably billions of transactions per day in the next decade.
That’s it for now. I hope the telcos are listening; they are among the most important enabling institutions in our societies and its high-time they started acting like it.
(c) 2011 Sean Blagsvedt. Reproduced with permission from Sean Blagsvedt’s blog. The views expressed above are those of the author, and not necessarily representative of the views of MediaNama.com
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