Wireless Services - Size Does Matter, but it is not enough 


In the Hutong
Watching the neighbors decorate a Chinese Christmas tree
2143 hours 

Fons makes a good point that size is an important determinant of success for important in China's Internet industry. 
 
But size alone is not enough. You can create something huge and with a lot of buzz and a lot of users, but if there is someone out there with the ability to a) create something substitutable and b) the wherewithal to cut you off from your primary audience, size and buzz together become a big invitation to that someone to come along and take away your audience.  
 
For the Internet, "substitutable" is easy. As I write this, four of the fattest cigars in Hollywood - Fox, Viacom, CBS, and NBC Universal - are trying to cook up a rival to YouTube. It's an interesting strategy - starve YouTube of content to the greatest extent possible, then come up with a substitute.  
 
But wireless services in China is different. 
 
China Mobile and Unicom each have the resources to create a substitute for any of the services offered via their networks. AND they each have something the cigar munchers don't - the ability to cut off those services in favor of their own. They've already started doing it, and they make no apologies. The one thing that tells them which service is next on their duplicate-and-destroy list is the statistics they see first - usage numbers. 
 
The one thing - and the only thing - that could stand in their way is if the operators believe that users have a personal loyalty to a specific service, and that cutting off the service would significantly damage the operator's service revenue.  
 
You've got services like that in cable TV - HBO, CNN, maybe MTV - but you don't have them in wireless services yet.  
 
Until the service providers invest some brain power and a little money into establishing that level of relationship with users, being large will be as much a liability as an asset. 

Posted: Sat - December 9, 2006 at 11:00 PM          

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