Network operators like to measure themselves in terms of Average Revenue per User (ARPU) and the rate people leave and join (the churn rate). 3G and the latest services provide an opportunity for network operators to use personalisation to increase ARPU and decrease churn…

Personalisation is all about making it easier for the user to use services. Personalisation can increase simplicity. A side effect is that personalisation often makes it harder for the user to change change service provider.

Take an example from the real world. I have a bank account with a big UK high street bank. I know I should move bank account to gain better services and interest rates. I don’t because I have another linked business account with same bank and many regular automatic payments to third parties. I don’t want the hassle of changing even though other providers say they can transfer me with minimal interruption. Somehow I don’t trust they can and don’t want the fallout when it all goes wrong. It’s the same for mobile services. The current low levels of personalisation make it easy to leave. Network operator utopia is a place where subscribers are deeply personalised so it’s a disincentive to move even if it is costing them more.

What does this mean for developers? Current personalisation is limited to ring tones and graphics. Current 3G providers are extending this to music and videos. But this isn’t the type of personalisation that will keep users loyal. People can obtain these services from other network operators. Network operators currently control the distribution of the majority of third party content. How long the situation stays like this remains to be seen. However, for the foreseeable future it seems that 3rd parties will have to create applications that are attractive to network operators.

Network operators are looking for applications and services that embed as much personalisation as possible. This ranges from saved settings (on the phone) to linked services and data seemingly held by network operator. An example is image sharing/printing where camera phone images are uploaded and held by the network operator. From here they can be backed up, viewed and printed by yourself, friends and family. It becomes a disincentive to leave if you have to move all your images and notify your friends and family that everything has moved. At the extreme end it’s possible to link totally unrelated services. For example, network operators in Japan are adding automatic contactless payment services to phones so that you can quickly pay by phone when you purchase a travel ticket. If it’s much more convenient then people will keep their network operator just to be able to pay this way.