As a business analysts some twenty years ago I was modeling that the total UK market would be smaller in size the the subscriber base of two of the current networks. The last few years have seen a land grab take place which meant that the networks were not looking at now to build the best data solution all they were interested in was replacing the churn. I know a number of long term customers who have discovered that they have problems with data services as the current billing system that they are on cannot deal with anything more than voice and text.

Before real innovation takes place the Networks need to undertake the housekeeping that will allow trusted parties to access their networks and provide the services. How many times do we talk to start-ups who say “if only we can get to the consumer we will have a viable business the BIG question is how do we do that!”?

None of the current CTO’s within the Mobile Networks are going to sign up for IMS in an effort to allow Innovation as the cost and timeframes make if likely that they and there replacement are likely to have been fired before the system goes live. Latter this year I am visiting Turkcell to see how they have implemented a SDP that has a number of people saying that this might just be the innovation engine that we seek. The Consultants are talking about how open API’s mean that Turkcell can launch a service for a few as 3,000 of its 30M customers in a matter of days.

I think that what we have to remember that at the end of the day it’s a phone and as such its about voice. In fact I am talking to a number of people about how Voice 2.0 is the product that increases ARPU at 3GSM this year. Perhaps once we get more than just a few people to use mobile we can start looking at how we can do things with those phones that people are doing on a broadband connection and a PC.

1) The fragmentation of networks and back-ends. It is really hard to innovate in this space because the most compelling mobile services are about connecting people, and people here are on many different kinds of networks. It is not a pretty experience to try to roll out a service and have to deal with 5 operators, 7 back-end providers, and 12 consolidators, all experts at passing the buck to each-other. And you have to in this large country. You can’t roll out in one area very well here, you don’t have the advantage that many people live in the same space under the same technological umbrella, like say in the UK or NL, allowing you to concentrate on one distinct set of technologies. No, here you deal with large swaths of spread out cities over a large landmass. Some innopvators try to create a space that will allow them to grow slowly without having to take on the whole country by constraining themselves to, say, a college campus for location-based safety services or issues like that. Other innovators choose to instead say ‘screw it’ and cobble together their own network by becoming an MVNO and take on the network effect that way, like Helio is trying for their GPS friends stuff. But nobody knows if this will work. It’s 2006 and I know for a fact that some networks still have problems sending MMS to each-other’s subscribers. Try rolling out a new service as an upstart in that. You can’t, you end up trying to cobble together your idea from known technologies like SMS and voice and you end up with the state of mobile payment there is today — call an 800 number to authorize while I am stanting in a cashier’s line? Yeah sure — or buddy-services as akward as Dodgeball.

2) So once you want to deal with all operators and back-end providers, you then get into business with operators. Who every single one wants to keep their systems as closed as possible to extract the most money possible from every subscriber. I am waiting for one of them to break and go the ’3′ route and open up already, and Cingular and T-Mobile are very well underway, but that leaves the two enormous giants, Verizon and Sprint holding on to their decks and screens with their BREW keys and locked Bluetooth and walled gardens, and they are simply not giving them up. Make your new service a 3d party app to install on a phone? Which phones, you’ll have to get certified first to be allowed on. So you end up back with only having SMS and voice-based technologies to be able to cover a good amount of handsets in the US. Consumers hate every last operator, but all they do is go from one operator to another like abused children who know no better, hoping this new stepdaddy won’t be so drunk and beat them so much like the last one. Well, they do.

Internet access is too expensive on phones. This lowers the chances of success of any speculatively developed service by introducing a barrier that discourages phone users from even trying.

In the boom days of the internet many services were created and the useful ones survived – such a phase is not possible in the phone market because it can’t tempt people online with large amounts of free content. It’s in a similar state to the online services market before the internet arrived.

We are slowly moving out of this situation but it is a process which requires actions from all sorts of players who have interests to protect. Gradually each one moves a step in turn (e.g. flat rate net access) and we progress but it will continue to be agonising until the cost of internet access decreases very significantly. This might be the result of a vicious battle between operators – which cannot be appealing to them.

What would help a lot is for developers talking to users (both consumers and businesses) about the things they would like to see on a smartphone, and whether they were interested enough to pay for it. Business in particular has always been a driver for new technology as soon as the business case was clear, but in the Symbian part of the mobile space, there appears to be no interest at all in doing business with businesses. Apart from selling them handsets, that is.

Then consumers. It has always been hard selling software and services to regular consumers. Most PC software is sold to businesses, and a quite a bit is sold to professionals. Then there’s the game market.

In the Smartphone market things are very similar. Software is sold for devices that are bought by professionals (UIQ, Series 80 and now Nokia’s Eseries). These people are also interested in certain services (push-email).

There are of course a few exceptions. Route planning is one of them, and it appears that a lot of people buy this kind of software, one way or another. Route-planning software has crossed the chasm, because regular folk know they want it, and don’t mind paying for it.

In short, having cool idea’s isn’t enough. You must connect to the general user on the other side of the chasm to make it.