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April 17, 2013

BCG Report Evaluates Mobile's Transformative Impact, Potential

Boston Consulting Group (BCG) is a worldwide management consulting firm. It is one of the largest private companies in the U.S. On tax day, April 15, 2013, BCG released a report entitled “Through the Mobile Looking Glass: The Transformative Potential of Mobile Technologies.”

BCG says in its report that this is the year mobile access will overtake fixed line access as the world’s primary way of going online. Multiple technological, economic and demographic factors are converging to give mobile the capabilities, scale and reach achieved by few other technological advances.

According to the BCG report, there are three main models of mobile’s development: collaborative, competitive and greenfield. The first, collaborative, is operator-centric, best illustrated in Japan. Mobile use is the most advanced in Japan having the broadest consumer impact. It is driven substantially by aggressive partnership building by NTT Docomo, Japan’s leading telecommunications company.

The second, competitive model, is prevalent in the U.S. Players at all levels of the mobile stack compete to provide products and services to other industry participants, as well as to the consumers. While it is true that this system has created lots of application entrepreneurs and driven mobile’s penetration of a lot of traditional industries, there is a downside: The fear of creating ‘frenemies’ tends to limit some of the impact this model can achieve.

The third model is called greenfield, and is evolving in several developing markets. India is a good example of Greenfield, as are several African nations. They have seen a big increase in the use of mobile phones over the past decade. For most cases, the consumers in these countries will experience the Internet entirely through mobile technologies.

Mobile has had different effects on different industries. The report sees that ultimately the principle difference is likely to be in speed of adoption rather than extent of impact. The BCG report argues that mobile's rapid development presents both policymakers and business leaders with a host of complex, rapidly evolving challenges.

David Dean, senior partner at BCG and co-author of the report, stated, "Forty years after the first mobile phone call, the playing field is uneven, but this does not necessarily benefit rich countries or nations with extensive telecommunications networks, as some might suppose. Innovation can come from anywhere and in fact may be more likely to come from places without legacy business models to protect. Perhaps more than any previous technological phenomenon, particularly an advance of such radical proportions, mobile has the potential to be a hard-hitting economic leveler."

The global leader of the telecom sector of the of the BCG’s technology, media and telecommunications practice, Sampath Sowmyanarayan – also a partner and co-author of the report – had his own comments; "The overriding question that CEOs need to ask themselves is whether consumers and employees can engage with the company through the device of their choosing, at a time and place of their determination, and come away from the experience satisfied and having accomplished what they set out to do.”

“The answer for most companies today,” he said, “is no. Those businesses that are first to be able to give an affirmative response will have a decided advantage as some 80 million Millennial consumers in the United States alone mature into full-fledged economic participants and the next billion consumers come online in developing markets. For these groups, their online experience is going to be 100 percent mobile."

For the entire BCG report, click here.




Edited by Braden Becker


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