Why mobile activation matters to the user experience

For telecom service providers, the main challenge they face is keeping themselves at the center of the “user experience” in markets where that experience is going through drastic changes.

In the areas of broadband and Internet access, telcos have tried – and largely failed – to sit themselves at the center table. Instead, Web, content and search companies have largely won the user experience game, which typically consists of buying Internet access and then going out on the World Wide Web and building an experience of one's own.

It’s the dumb pipe dilemma; we all have heard the story a million times.

But something altogether different is happening in the mobile arena. There, it seems, it has become increasingly difficult – app stores aside – to dislodge mobile operators from the center of the wireless value chain, particularly at the point of purchase and activation, the crucial starting point of the mobile relationship with the consumer.

Consider Google’s attempt, with the Nexus One, to sell smartphone devices – and content and apps, i.e., the user experience – directly to consumers via the Web. By all accounts it was a failure, and this week Google CEO Eric Schmidt (while oddly calling the effort a success) said Google wouldn’t be going direct with phones any more. Instead, it will rely on mobile operator partners, which, by the way, have helped distribute dozen of Androids phones to millions of users.

The importance of mobile distribution and activation was brought home again today by Synchronoss (an OSS/BSS vendor that, most famously, helps AT&T with iPhone activations), which spent $40 million to buy fellow vendor FusionOne. Synchronoss has a platform that automates the order, provisioning and activation of mobile devices. It sells that platform to mobile operators like AT&T, yes, but also to any player – hardware-maker, retailer, cable operator – that wants to get in on the ground floor of connecting consumers with their new devices.

The addition of FusionOne adds some important new capabilities to the Synchronoss platform – now available to its operator partners, as well – including mobile content backup and data synchronization services. Today, FusionOne supports more than 600 handset models and counts Verizon Wireless, AT&T, Bell Mobility and others among its customers.

The acquisition further cements the fact that there is a vitally important role to play in helping mobile customers get started properly with their phones. They need to purchase the right device, buy the contract plans and services they need, move over old content and contacts, and walk out of the store or receive via mail a device that is set up and ready to deliver a good experience. It’s a complex and important process.

Indeed, that initial activation and setup process, with its path to recurring revenue streams, is arguably much more important – and valuable – then the ability (via an app store) to buy incremental $5 apps or be the target of mobile ads.

Which is why it’s so important for mobile operators to continue to control that mobile activation process — and so encouraging to see them doing so.