Is wholesale mobile data about to take off?

One of the big things that has been holding back the development of the mobile web and mobile media is data costs.  On the consumer side this is slowly being solved by the proliferation of flat rate tariffs and cheaper data bundles.  However, there is still a huge group of people, often pay as you go customers, who it appears aren't going to get access to cheap or flat rate data any time soon.  For the mobile content and internet industry this is a big problem - how can you sell a video for $1 if you can't say how much it will cost the user to download it? How can you offer free ad funded content if the cost of downloading it is the main barrier?  For public service players like the BBC, the fact that they can't offer mobile services for "free", to everyone in the UK, across all networks, is really holding them back.  You can imagine the complaints if people started downloading bbc video over mobile en masse and started getting hit for huge data bills for a "free" service from the BBC. 

One solution to this problem is wholesale data where they content provider pays the operator for the data costs associated with its service.  This is also known as zero rated data as the user pays no cost for any data involved e.g. in downloading a video.  The idea of this has been floated for a while - the UK ringtone company Monstermob  (now part of Zed) was rumoured to be negotiating wholesale data deals for the launch of its mobile music service but nothing every materialized.  The main issue for the operators in providing wholesale data is that in a lot of cases, their billing systems are not capable of carrying out the transaction.  Operator billing platforms need to be have a method of discounting data costs associated with a specific content provider which isn't easy if you're working with a system set up to bill voice calls! 

More recently, Jamba were pushing the idea that they would begin to sell data packages from operators along with their rich content services like their unlimited music deal.  This makes perfect sense as some users are most likely to want to sign up to something new like mobile data in order to access a particular service.  This is also a work-around to the problem of the operator billing systems (assuming you can manage the sign-up process for a data package through a third party, which is also pretty hard...

So - it was interesting to see the other day on the 3 UK network that one of the up and coming mobile
2.0 startups Reporo appears to have done a deal with 3 to offer the site on a zero-rated basis.  It says "3 Mobile and Reporo have joined together so you can now connect to Reporo COMPLETELY FREE of data charges.  Use Reporo ALL YOU LIKE and 3 wont charge you a penny!'' Wow! It makes perfect sense that 3 would be the ones to do this - they are the most innovative mobile network around at the moment and have an all 3G network, with a more modern billing system.   

Here is a screenshot

So - is this the start of a wholesale data revolution that could open up the mobile internet in a major way?  How did Reporo negotiate this deal and are they paying 3 UK for the data?  If anyone knows send us an email or leave a comment!

Comments

[Max]

Interesting. Would be good to know if Reporo are paying 3UK anything.

[Steve]

This is similar to the deal that Cecure Gaming (Aces Royal Casino) reportedly has with all the UK network operators, as they claim that you will not get charged for data whatever network you are on

[james]

Hi Steve - interesting will check it out ..

[Simon (We Love Mobile)]

Steve is absolutely right, Aces Royal offer to meet your data costs when you connect to their service and this is done through a deal with the networks. We covered this a little while back in April. It kind of goes to show that data cost (or perceived data cost) is still a real user barrier:

http://www.welovemobile.co.uk/blog/?p=96

[james]

Simon really appreciate your comment it's really interesting surprised it hasnt had more publicity.