CandidCapital

The Mobile Operators (MNOs) at the Mobile2.0 conference in Barcelona today, sang a plaintiff song of explosive traffic growth and puzzlement over how to replace fast - dwindling voice revenues: the audience was not sympathetic.

The Mobile2.0 conference organised at Barcelona business school this week has been a fascinating insight into an introverted and confused industry.

Everyone has shown signs of confusion - the mobile entrepreneurs groped unsteadily through a landscape of "mobile social networking", "ubiquitous applications", "location based services", "relevance" and "personalisation" to present ever more esoteric applications with ever more uncertain business models. I may not have believed in dogsdinner.com during the heady days of the internet boom, but at least I understood how its flawed business model was meant to work. Today I remain completely unclear about how Zyb, Moblabber or a Friendstribe is going to generate revenue and value for its founders, let alone investors.

The nemesis of this confusion was the statement by one founding entrepreneur: "X will be free to consumers, which is the only way to build a multi-million dollar, global business." Free to consumers and only workable, presumably, if the user is able to transfer data on an unrestricted, "feed as much as you want" data tariff.

The elegant Anastassia Lauterbach, speaking as VP Strategy at T-Mobile on the operators panel, was frank about the MNOs view. She asked the audience: "what proportion of wireless (I presume she means GPRS/UMTS rather than WiFi) network traffic is peer-to-peer file sharing?" Answer: "38%". She the asked: "what proportion is YouTube traffic?" Answer: "17%". Finally she asked: "what will be the cost of updating the wireless network to meet anticipated traffic levels by 2012?" Answer: "Euro 70Bn". Her frankness provoked squeals of protest and dissent from the audience with the organiser stepping in to plead for a less confrontational approach to the discussion.

To the less directly involved observer it seems that words of Oscar Wilde could be re-written as a description of the mobile web industry "the incredible in pursuit of the intransigent." How can entrepreneurs without clear revenue models expect to persuade MNOs to canabalise their few remaining sources of income to persuade sceptical consumers to use less-than-compelling services? If only the tornado of the internet boom would return, since "in a tornado even turkeys fly!"

4 July 2008