Smart pipe

With regards to a mobile network operator (MNO or "operator"), the term smart pipe refers to an operator’s network which leverages existing or unique service capabilities as well as the operator’s own customer relationships to provide value above and beyond that of just data connectivity. The use of the term “smart” refers to the operator’s ability to add value for additional (and often unique) types of services and content beyond just simple bandwidth and network speed.

The smart pipe is one of the commonly understood operational models for a MNO, including the walled garden, and the dumb pipe.

Examples

While there is no real industry standard definition of a smart pipe, there are several operators, bloggers, and researchers who have described aspects of the smart pipe which are generally accepted.

Network operator 3 led the way with the release of its X-Series line of devices in 2006 [ [http://www.three.co.uk/news/h3gnews/pressnewsview.omp?collcid=1019745742912&cid=1163170230108&index=1 Hutchison Whampoa announces the global launch of the X-Series from 3] ] . The X-Series platform bundles a set of services, several of which are unique to 3, and provides unlimited data access in exchange for a fixed monthly premium. While not necessarily a full realization of the smart pipe, 3 is one of the first operators to offer such a combination of bandwidth and value-added services for flat-rate pricing.

In addition to pricing, there is a collection of services commonly thought of as components of the smart pipe [http://gigaom.com/2008/01/13/the-operators-vs-the-media-brands/ The Operators vs. the Media Brands] ] [ [http://mobhappy.com/blog1/2008/01/14/the-pipe-is-only-dumb-if-you-make-it-that-way/ The Pipe Is Only Dumb If You Make It That Way] ] [ [http://www.wirelessweek.com/staying-relevant-in-a-dumb-pipe.aspx Staying Relevant In A Dumb Pipe Era] ] , such as:
* Location
* Presence
* Customer Analytics
* Application Platforms
* User Interface
* Personalization
* Device APIs
* Network APIs
* Payment
* Directory Services
* Quality of Service

By exposing these types of services to the mobile ecosystem, network operators can maintain the value of their pipes while enabling entrepreneurs to create new business models and generate entirely new revenue streams.

The necessity for operators to innovate around the smart pipe is real as they face increasing pressure from media companies and new technologies, such as Apple’s iPhone, Nokia’s consumer portal Ovi, and even the FCC’s open-access policies introduced around its upcoming 700 MHz spectrum auction [ [http://www.rcrnews.com/apps/pbcs.dll/article?AID=/20070911/SUB/70911004/1008 Making Pipes Smart] ] .

Recently, Arun Sarin, the CEO of Vodafone, was criticized for some statements he made [ [http://www.theregister.co.uk/2007/11/19/vodafone_ceo_blind/ Vodafone CEO sticks head in sand, goes 'La la la'] ] about how Vodafone will always have a unique relationship with its subscribers through its billing relationship. Although Sarin’s point has traditionally been true, as the article points out there are several new threats to that exclusivity such as traditional credit card, Obopay, PayPal Mobile, as well as existing media companies like Google (with its Android platform), Yahoo (with Go), and Apple (and the iPhone).

Further reading

While there is no real industry standard definition of smart pipe, it is a generally understood term in the mobile industry. There are numerous blog postings and trade articles which refer to the operator dumb pipe / smart pipe dilemma, some of which are referenced in this article. Others include:
* [http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=all Wired: How the iPhone Blew Up the Wireless Industry]
* [http://www.fiercebroadbandwireless.com/story/analysys-wimax-carriers-risk-becoming-dumb-pipes/2007-07-16 WiMAX Carriers Risk Becoming Dumb Pipes]

One very good reference which describes the smart pipe, operator portal (or walled garden), as well as the dumb pipe is a report from Juniper Research titled "Business Models for Mobile Content Players, Strategic Options & Scenarios 2007-2012":
* [http://www.juniperresearch.com/shop/viewreport.php?id=91 Juniper Research Report] The author is not affiliated with Juniper in any way, and although the full report requires purchase, there are a number of useful summaries available on the web:
* [http://www.sourcewire.com/releases/rel_display.php?relid=iiLmi Smart-Pipe Strategy to Provide MNOs with 31% Share of $188bn Mobile Content Market by 2012]
* [http://news.soft32.com/juniper-research%E2%80%99s-study-about-mnos-share-of-mobile-content-market-by-2012_5106.html Study About MNOs Share of Mobile Content Market]
* [http://research.analysys.com/default.asp?Mode=article&iLeftArticle=2179&m=&n= Mobile Entertainment in Western Europe] A Google search will list several more:
* [http://www.google.com/search?hl=en&q=juniper+research+business+models+for+mobile+content+players&btnG=Google+Search Google Search of Juniper Report]

See also

* mobile phone
* mobile network operator
* walled garden
* dumb pipe

References