Content Is Still Undoubtedly King
Few seem to doubt that enhanced multimedia services will become available on a large scale. It's far less certain that all operators who currently possess 3G licenses will actually launch services, and be able to profit from them. In some cases where operators have already paid hefty amounts to acquire next-generation licenses and face the additional costs of constructing 3G networks, delays in service launch are not unlikely.

Mounting debt, volatility in the financial markets, and technical obstacles are just some of the problems they face. Many mobile operators are anxious and, as such, have appealed to their governments for support. In Germany, six operators paid a total of $47.5 billion in the country's UMTS auction. RegTP, the German regulator, seemed to be moving in favor of allowing its operators to share the costs of network construction. This is the opposite in the UK where OFTEL has stood firm against such a move as it feels that allowing practices such as network-sharing would endanger the development of a competitive 3G market.

Either way, operators that survive the ensuing obstacles even before consumer launch, must build foundations with a whole host of content and technology partners. The sheer breadth of services to be made available will necessitate partnerships with news agencies, Web portals, banks, and travel companies, to name a few. This not only presents the operator with revenue-sharing issues, but also implies the development of alternative business models and processes.

The Yankee Group argues: "Customer ownership, branding, and revenue distribution models clearly need to be developed to optimize the dynamism of the marketplace. Across Europe, operators appear to be gradually coming to terms with the idea that sharing risk and success is crucial to enlarging the market for model data."

Despite the need for a new approach, there seems to be an air of optimism within the industry that operators are well positioned to dominate the value chain of services. There will be a slice for all. Gone are the days when the operators dictated terms on content deals. Revenue-sharing agreements with cellular operators have the potential to be equally weighted, if not in favor of, third parties. There's a severe lack of broadband content out there at the moment, and existing content companies will have to adapt to new technologies themselves, to repurpose their content to this new platform. If you look at i-mode, NTT DoCoMo has a transaction fee for traffic revenue. It takes 9% of the applications revenue for 38,000 or so current applications ranging from horoscopes to "joke of the day."

Large multimedia content providers stand to gain lucrative revenue-sharing deals with mobile operators. But ultimately, it's the operators who will benefit most. Some operators will use the brands of their content partners to define and differentiate their own service offerings. The value chains will be split up so you'll have network operators and service providers, mobile virtual network operators (MVNOs), and so on. A fresh approach to thinking is definitely needed.