Mobile Operators’ Strategies for Connected Devices

The newly unveiled BlackBerry tablet is certainly making the headlines this week, but RIM isn’t the only player in the mobile space paying close attention to non-phone connected devices. As a new report at GigaOM Pro states, the shifting technological landscape is forcing mobile carriers to consider new strategies and devices to offer as more and more customers give up their landlines for non-voice wireless devices like tablets, e-readers and machine-to-machine (M2M) offerings. Tier-One carriers, in particular, are feeling the impact of this shift; here is what they are doing to combat the challenges presented:

Verizon lags behind main competitor AT&T in providing non-voice consumer-connected devices, but that’s expected to change this year, as Verizon is likely to offer several Android-based tablets and e-readers. Meanwhile, to better serve data-hungry business travelers, the company has launched a “mobility as a service” offering that provides streamlined management of all mobile devices connected to enterprise systems. Verizon’s superior network enables it to handle more data traffic than AT&T, whose network is overloaded with data traffic mostly caused by iPhone users, which has led to the implementation of tiered data plans. Verizon is under much less pressure both because of the better quality of the network and lack of the iPhone overloading its network.

While the Apple relationship has served AT&T well over the past few years, Android is rapidly evolving and leading iOS in a number of technical areas, including multi-tasking. AT&T must embrace Android devices in order to provide its users with the best possible products. The carrier has also aggressively pursued additional non-data device activations including PNDs, e-readers (including the Kindle, which it pinched from Sprint) and other M2M devices. For these “non-voice devices,” AT&T has entered into an exclusive U.S. agreement with Jasper Wireless to activate, support and bill for these devices.

Sprint, meanwhile, has struggled with its consumer-connected device business after leading with the launch of the Amazon Kindle, which Amazon subsequently moved to AT&T. Another disappointment for Sprint was the Skiff e-reader deal, designed as a breakthrough device for reading newspapers and magazines until Rupert Murdoch’s News Corp bought the company for the distribution platform and killed the device. However, Sprint’s commitment to WiMAX has put the company in a very precarious, yet unique, strategic position. As the market moves toward LTE, Sprint is forced to follow, but will also build out the WiMAX networks, effectively providing two networks that will give the company a competitive advantage in the connected device market.

As the smallest of the four Tier-One mobile operators, T-Mobile provides more limited value-added services. The company experimented in the e-reader market in 2008 with the News4Me project, and while it was unsuccessful, the company is still engaged in the market. The company has also focused on mobile Internet devices and mini-tablets. The Dell mini-tablet is expected to run on the T-Mobile network. The firm’s M2M strategy, meanwhile, is to be the easiest carrier to work with. T-Mobile has streamlined the device certification process and created multiple SIM solutions including a generic SIMs, an embedded SIM and consumer-focused SIM. This hands-off approach is expected to keep costs down and T-Mobile is expected to grow OIBDA margin from 31 percent last year to 35 percent by 2012.

Read the full report here.

Image source: flickr user barnoid