Piping Up on the Dumb Pipe Debate

February 14th, 2008 by Allison

In the mobile industry, it’s near impossible to go a day without hearing the words “dumb pipe.” So at OMMA Mobile, the phrase came up—a lot. It refers to the fear carriers have of becoming vehicles for mobile content delivery but without a real say in what or how it is delivered. Here’s an analogy: the consumer is the stomach, hungry for an entertainment “snack,” while the content creators, providers, and delivery platforms are the brain, hands and mouth. The carriers are just the throat that everything gets shoved down.

The question is whether the move towards “openness” will push carries down this path. If consumers can download third party apps, use any unlocked handset, and go off-deck for content, they’d be bringing little to the table but bandwidth. As we’ve discussed, this is causing them to try making money other ways. But some think this isn’t a great strategy. As one speaker put it “carriers are dumb pipes because walled gardens are indeed dumb.” Manish Jha from Vantrix backed up this view, saying there is too much grandstanding among carriers about the issue, and the walled garden approach is flawed. “Consumers don’t buy bandwidth, they buy brands,” he pointed out. “Smart cooperation will drive data revenue for carriers. It’s about making the pie as big as possible rather than how to slice the pie.”

nokia There seems to be more friction in North America than across Asia (where 80% of content is consumed off-deck) and Europe, which is moving faster towards openness. Jha cited Nokia as a major force behind this as one of the most forward-thinking and consumer-centric carriers. In fact it was Jeremy Wright from Nokia who said that carriers “are smart networks, not dumb pipes.” Nokia’s acquisition of Enpocket, the ad network he started, was definitely a smart move. Perhaps if carriers not only bought, but cooperated more with technology companies (by opening their device and network APIs, for example) the mobile world would be a much happier—and bigger–one.