Mobile operators should quit moaning

NET RESULTS: I was amused and annoyed - but not surprised - to hear Ms Danuta Gray lament recently that the Irish mobile telecommunications operators deserve Government support money to boost their industry, just like the landline operators.

Ms Gray is the chief executive of The Company Formerly Known as Digifone (now O2). The handout to which she was referring is primarily the Government 's €300 million, five-year plan to subsidise the creation of broadband networks around 123 towns. She probably also was thinking about the Government intention to support the development of a long fibre network running down the west coast, the Atlantic Broadband Corridor (or ABC).

She's not alone in her opinion that this is some jumbo subsidy for landline operators. Other mobile operators have made the point as well. They'd like to see the Government help subsidise their rollout of next-generation 3G mobile networks, or to fold some sort of mobile phone element into the fibre ring project.

Complaining that the Irish mobile industry is somehow not getting its fair share of Government cash is mere smoke and mirrors, disguising the sector's frustrating habit of laying blame everywhere but on itself, failing to articulate its real issues well, and rarely taking a proactive stance to resolve its issues.

Instead, the operators squabble among themselves, with the telecoms regulator, and with the Government, all the while alienating their customers with incomprehensible service packages that all seem remarkably similar in pricing.

But let's set those issues aside and instead, look at two points in particular: the way in which independent developers in the industry are treated, and the question of whether the operators have been hard done by the Government on big national telecoms projects.

Irish developers of wireless, mobile services are one of the State's glowing corners of entrepreneurial productivity. Some of our most promising start-up companies are working in this area, and have signed deals in Asia the US and Europe.

But only very recently have developers here begun to get some real support from Irish mobile operators, even though every analyst and industry pundit on the planet has been pointing out that creative partnerships with service providers are going to provide much of the sector's income in the future, as voice revenues continue to slide.

Developers say the operators have been asking for a standard 50 to 70 per cent reduction of the amount costumers would be charged for a service. So, if one of the operators sets up a service where you might get a new ringtone every month, at least half the amount you'd pay for that service would go to the operator.

In contrast, the operator that has become a byword for success in the mobile services industry, Japan's NTT DoCoMo, takes a 10 to 13 per cent slice of revenue. This amount encourages the service providers to offer a wide range of offerings because the cost of getting into the market is relatively low.

Customers like having the options. And DoCoMo, which has about 40,000 customers for its 3G services and is profitable, generates around a fourth of its income through this light-handed revenue-sharing model.

So why are Irish operators intent on crippling a young but promising market when their future depends on its success? I asked some of their representatives this question recently. I couldn't get a straight answer. What I did gather was that they seem to think that the pricing model isn't an issue for developers. It is. A huge one; in some cases, life-threatening to these energetic, small companies. To be fair, the operators are at last beginning to work more supportively with some of these companies - developers say there's been a new willingness to talk and listen.

But this approach to revenue sharing is unproductive, and leaves one wondering why the big operators aren't more interested in working alongside developers to create their own long-term future, rather than looking at short term returns.

This is exactly the issue, too, with Ms Gray's concerns about the purported neglect of the mobile operators by the Government. First, the projects all benefit the mobile operators, too. All fibre infrastructure is good infrastructure for them, and they will benefit enormously from having more of it out in rings around towns in regions that often strongly oppose mobile phone masts. More fibre means less need for masts in those areas. It improves mobile reception in the regions.

The operators will still argue - and have argued - that they were and are being left out of big network projects. So I took that question to the Government. According to a spokesman, not one of the mobile operators has ever - EVER - put forward any proposal for participation in these national infrastructure development projects, although the request for proposals issued by the Government clearly supports applications from mobile operators or service providers.

The industry people did not deny this. Instead, their stance seems to be that they are waiting for the Government to come to them for advice and ideas. This is utterly bizarre. I cannot understand why the mobile operators are not being aggressively proactive, volunteering ideas and projects that will help shape tomorrow's mobile markets and their own operating environment. Surely they want a say in that?

And finally, I am tired of the operators telling us about what they cannot do, and the services they cannot offer, because the Irish market is too small. Somehow they seem to think they deserve special consideration because of this - subsidies, perhaps; having network construction underwritten by government.

Well, it cuts both ways. If this is an unusually small market, does it not then behove the operators to work with developers, Government, and other potential partners to create a different business model, a different network environment? That requires positive input, not the defensive arrogance we have seen from this industry so many times in the past.

Mobile operators, like all players in the infrastructure sector, need to make themselves part of the solution, not part of the problem. In a small country, this is essential not only for their own future but for that of the nation as well.

klillington@irish-times.ie