We’ve heard numerous times telecoms will either have to change or die at some point. Now, we have Berg Insight predicting that ad-based revenue model is going to have a profound long-term impact on the development of the mobile industry.
Traditionally, carriers made (and are still making) their money by managing network traffic — i.e. selling minutes and data access to their users. However, with players like Google entering the space, things may shift away from the “old” business models, resulting in a free, ad-supported network access for the end users.
The problem is that even though there are close to 100 million mobile Internet users in Europe and North America, most of them don’t use it that frequently. Hence, they can’t be exposed to enough advertising to justify the free service. According to Berg Insight, in order for the ad-revenue model to work, the existing user base must become exposed to between 3–10 commercial messages every day and the industry still has to figure out a way to do that…