Media companies in the 21st century will be fighting new kinds of battles. The combat will play out often on the mobile phone screen, Here are some examples.

1.     A key forthcoming battlefield for communications solution providers is unified communications. Media technology companies (eg Google) are rolling out services that allow phone calls from fixed or mobile handsets to be routed through the Internet. A user can consult a Web-based call log, record calls, hand off calls from one handset to another, see the caller’s name and listen to a message being left before deciding to jump into the call live, see the caller’s location on map, and so forth. Buttons can be created for a user’s Web site allowing site visitors to call the user’s phone from the Web site.
Most likely new versions will interface with social networking sites as well. These services bring together voice calls, video conferencing, location-based services, in an increasingly seamless experience. This “one click” elegance is a battlefield where – provided the feature set and pricing are comparable – local presence in Australia will likely favour the telco and special additional services (eg multi-party video conferences including mobile phone users) can be charged for.

2.     There is always an opportunity to licence and rebadge overseas services that have an arguable appeal to Australian users. When this is done, a telco can add its “special sauce”. For example, it can negotiate exclusivity for the region as part of the licence. It can “unmeter” data exchanged when people use the service so that there is a strong reason to use its version of the service, rather than that of a competitor. It can functionally integrate the service with other products and create price savings that attract buyers by bundling the service with other things.

A remaining dilemma, however, is how to deal with the fact that a growing number of well-known service providers active in this space are focused on creating a global customer base. When that is achieved, the sheer number of users worldwide can generate enough revenue from advertising alone to allow the service provider to offer the service without an actual pay-per-use fee. This represents a big threat to companies catering for a small population in a particular region such as Australia. The problem is that the Internet removes consumer friction. Customers have fewer disincentives not to churn because the Internet creates a “level playing field”. Users are empowered to be fickle, disloyal and mobile. Services providers must confront a marketplace in which it is increasingly difficult to maintain protected “walled gardens”. It is harder and harder to force users to pay because there is no alternative available at all, or at least, available as conveniently as if they buy from within the walled garden. In some ways this is good for the consumer. It increases competition. But in geographically remote countries with small populations, it can also make it increasingly difficult to support regional broadband innovation without government subsidy and protection.