Livewire

I fully agree with the quick analysis, Vivek. And would like to add that Service provider is at the risk of becoming so but the final verdict is not out yet. They are fast evolving or should I say they are trying best to do so. New models are becoming more evident now, where content and ease of accessability of content is driving the game. But most have an old baggage to worry about due to huge investments they made towards infra, licences etc., so will take them a while to get onto consumer's list for innovation than merely for providing 'good experience/service'.

For now, surely the first round battle seems to have been won by the 'playstation' over the 'broadband service provider' but he is still sitting in my living room in a 'semi-new avatar' !

Vivek - A very interesting thought that is becoming more relevant with today's changing market. In the current environment, more users are being attracted by the devices and services/experience these devices enable and they dont hesitate to switch service providers if another meets user's demand and expectations.

Market innovations that result in smarter devices, new services and new applications are influencing the way users use their mobile phones. For operators, this means good news. It also means that expectations and demand from the subscribers have gone up than before. This creates new opportunities for the service providers. I believe those who can exploit these opportunities will attract more customers, improve stickiness and become more relevant in the customer value chain!

I'd agree on the stickiness part. There is a major challenge for the service providers to retain customers.

But to access any content or service from a third party, a customer needs to have a device and a plan that only a service provider can give. Even though the customer might swap between various providers, he needs to connect with the provider for billing, change of plans, new contracts, customer care etc.

So the service provider who is best in handling the core functionality will automatically attract customers. Moreover the service providers are inclined to host their own application markets that host the best applications to attract their customers.

From a user's perspective, it is easier to buy apps or VAS from the service provider than from a third party. And thus when more and more smartphones are sold and application marketplaces grow, service providers will have a major role to play.

@Sanjeev - that's an interesting point about the game consoles. They are definitely going to challenge some of the traditional STB scenarios.

@Sandeep - agree that the devices will enable newer experiences for consumers, I guess the challenge still remains of 'how does a SP become essential/non-fungible' in the chain.

@Phani - while I agree with your take on the role of the SP, what still remains an open challenge is 'stickyness' - beyond native human interta - is there anything else preventing the majority of the end users from switching providers as long as they get similar (or better) set of experiences elsewhere?

Here is a hypothesis to challenge the current model:-
Imagine a new MVNO like startup called 'xMobile' which offers a virtual SP relation to end users. This means, that xMobile will transparently manage n/w relationships, contracts, billing for the end customer by providing a user a 'floating' mobile account, which xMobile might from time to time move from SP 'a' to SP 'b' based on better wholesale billing rates, better n/w coverage, improved 3G access etc.
Assume that the above model is possible - it basically means that as the SP offerings start looking similar, the relationship between end user and the SP starts becoming less binding.