3G – What does it mean for startups?

The promise of 3G is live again, and as consumers, I am sure most of us are looking forward to it. It would be great to get people’s views on what it might mean for startup opportunities. Some of my thoughts:

  • 3G in India is fundamentally about cheaper scalable voice capacity. At a basic level, 3G doesn’t change much for consumers – operators should be able to continue their drive for user growth, hopefully at better service levels.
  • Data becomes faster – the big bet on this seems to be music. Mobile can become the de-facto music delivery device with advent of 3G. Big question/opportunity – to own the music experience on the device – hard place for startups to play, but promising if one can find the right channels (including operators, handset vendors, and so on). A sound business model, and ability to rally the industry around it is the key. I have heard people mention gaming as the other killer app – I think monetization is an issue here, unless its ad supported.
  • Open gardens – IMHO, this will remain a dream. The fundamental piece here is the charging capability. So while free content browsing should expand (see next point), any kind of paid content/services will continue to go through operators. Watch out for takeoff in any mobile micro-payment mechanism. The second important piece remains low cost marketing, which is available through operators.
  • Mobile advertising should grow with increased data usage on the handset. Ability to target well on the phone is a key capability. Equally important might be to target across media types (voice, sms, data).
  • User experience and control thereof on the mobile phone will become more and more important. With operators in India not having control on the handset configuration, this space is vacant. One key set of players will be device folks. Startups can play an important role if they can figure out dissemination mechanism (a la mobile viral apps). Also, the fundamental unit of user experience needn’t be a web page… and that opens up a few innovation opportunities.

Any thoughts, comments, rebuttals?

PS: Just saws this – why is this all percentages, no one seems to know/report how many users are actually using this stuff!

5 Responses to “3G – What does it mean for startups?”

  1. Guru krishnan says:

    Please forgive my Ignorance in this field.

    First of all, I am surprised to see 3G launching in India. Here more than 70% people hold their “basic” Mobile models which will allow them to call “only”. So whats the whole plan? How are these companies going to convert those people to buy a high end Mobiles?

  2. I think the challenge is new/alternate monetization schemes which have to be created beyond the 3 main as outlined below:

    #1. On-screen — This is a big challenge considering there is 1/10th of the real-estate in comparison with the normal desktop. Whether it’s text ads via Mobile browser or SMS, it is going to have the same challenge. The only on-screen advt. that has worked to some extent is generic brand-driven and intersitials to some extent.

    #2. Subscription/Pay-as-you-go — Pretty evident. Ring tones, Games, Music, TV. You can only charge $$$ if there is a demand for the content.

    #3. Call to action — This is mostly revenue sharing. Looking for a restaurant, get referred and split based on flat referal or a percentage from the sale. eg. Yellow pages, couponing.

    Would Location Based Services add spice to these monetization schemes?


  3. Alok Mittal says:

    Nikhil, I think SMS ad networks can be valuable (huge inventory-monetization mismatch). The key issue is what inventory to monetize (availability, ability to target, etc) and how effective is targeting. Opening up P2P SMS is probably a huge step, and one that is only going to lead to inefficiency (look at all the adsense banners alongside email) because of scale of inventory available, but more specific targeted campaigns (within SMSs or outside) could be more useful. The second question is what the operators bring to the table (esp in case the campaigns are outside the P2P SMS) – in my view, there is a targeting play there, and that can go beyond just SMS.

  4. Krish says:

    I think first we need to figure a way out to minimize the mobile app startup mortality rate fueled by telco tyranny. That is possible if someone develops a technology that enables relaying ads/messages to all active sim cards coming within a, say 10 mile radius cutting across operators? Imagine how empowering and economical an app it will be to brands/merchant establishments armed with just a mobile relay transmitter that serves up innovative promotions to customers, alerting the sales force on inventory status (something like a ham radio?) obviating the need for a web interface as Alok had envisaged!

  5. Nikhil says:

    Hi Alok

    What are your views on SMS ad network? Do you see operators opening up P2P sms for ads – that’s where the volumes are? Any privacy issues?

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