Uh-oh! The carriers want to manage your smartphones

The cellular carriers are in a bind — and have been for more than a decade. The value of phone calls has steadily declined, so they want new ways to make money. Right now, the rise of smartphones and the iPad means they can now charge $15 to $30 more per month for the required data plans that come with such devices. The fear is that the value — and the revenues — of data will follow the same commoditization downward arc.

For years the carriers have been looking for other ways to offer lucrative, high-margin services to help them break out of the “dumb pipe” business of selling raw capacity (that is, voice and data plans) and become “smart” businesses. For the 12 years I’ve been covering this industry, it’s been all talk — the carriers remained dumb pipes. But they’re still trying to figure out how to “add value” to the “relationship,” so you can expect to see carrier come-ons for mobile device management, mobile application management, mobile security (antivirus and antimalware), and technical support.

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In fact, AT&T made several such announcements this week at the Consumer Electronics Show. But in a sigificant shift, two of its three efforts are carrier-agnostic — suggesting that at least one dumb pipe is getting smarter. I normally suggest you run, not walk, away from such carrier-based offerings, but that advice warrants another look now.

The reasons to stay away from carriers Why have I advised historically that should you run away? There are several reasons.

First, it’s doubtful the carriers can deliver on what they will promise. Carriers have been historically highly dysfunctional organizations, with severe siloes that ensure nothing new can happen effectively. Typically, the various divisions won’t work together outside their individual boxes. Every few years they reorganize themselves, but that seems to be the equivalent of rearranging the deck chairs on the Titanic.

What you see in practice are carriers relabeling someone else’s technology, then selling it to you. So why bother with the carrier? They’re hoping the brand name impresses you, while the usually small actual provider may scare you away as unproven. But since they’re relying on that unknown vendor, you should either trust it as the carrier does or distrust both it and the carrier that chose it. Either way, you don’t need the carrier in the middle.

Plus, the carrier’s arrangement with the provider is usually exclusive to devices on the carrier’s network. There was a time when enterprises would choose a national carrier, then provision employees the approved devices on that chosen carrier. But that time is gone. These days, the norm is choice: bring your own (BYOD) or employee choice from a variety of approved devices and carriers.

One reason is the rise of the family plan, which drives individuals to stick with their existing carrier rather than switch to the company’s. The other reason is that no national carrier’s coverage is universally great, so companies with offices in different regions are better off having a mix of carriers that cover those locations well. The bottom line is that the carrier’s “only on our network” offering — meant to get your users off competing networks — is unworkable.

Second, carriers have a long history of making money through slimy tactics. They still sell “unlimited” data plans that are in fact limited, if not in bytes then in throughout speed. But they’ve done much worse, such as when Verizon Wireless set up its cellphones so that users could easily tap the button to launch the Verizon data services, which drew an instant data charge on users’ bills — even if they cancelled the action or immediately hit the Back button.

There’s a whole industry called telecom expense management (TEM) that exists solely because carrier bills cannot be trusted to be accurate. Despite years of claimed work by carriers on their billing systems, the bills remain untrustworthy, and (surprise!) they tend to overcharge. This is a provider you’d want to give more business and trust?

I don’t think AT&T’s new set of APIs for HTML5 apps is slimy, but it is a great example of the carriers’ tired “lock them in” attempts. ( of this idea two years ago that failed as developers rightfully ignored it.) Some of them link application functionality to AT&T’s network, such as those that use the AT&T billing system for app purchase and to handle SMS texting. AT&T’s geolocation API doesn’t lock into the carrier’s network but instead provides more general hooks that might be useful, except that HTML5 already has a geolocation API. At the end of the day, these APIs are meant to tie apps to AT&T and not to help developers build better HTML5 apps.

Where the carriers could provide real value This year, carriers will see Apple make more money from the iPhone and iPad (apps and devices) than all the carrier combined make from all their device services. Accordingly, I’ve noticed a rise in consultancies suggesting what new things the carriers could do to no longer be just “dumb pipes.”

For example, Adaptive Mobile suggested that carriers could take on the burden of providing antimalware and antivirus defenses through their networks, given that its surveys show users don’t believe it should be their responsibility. (Adaptive naturally sells carriers a tool to do just that.) Accenture has suggested that carriers could provide tech support on mobile devices so that IT wouldn’t be burdened by the multiple OSes and hardware devices in use today. Accenture does a lot of that kind of back-shop work for customers in other areas and would love to do it for the carriers.

At first blush, it makes sense. The network is a good place to detect malware and viruses, and the carriers run them (the cellular ones, anyhow). Carriers and their affiliates sell a variety of smartphones and provide support to individuals on the phone and in their stores, so why not scale that to support entire businesses?

AT&T announced this week it was reselling Apperian’s mobile application management (MAM) service, which lets enterprises put up corporate app catalogs to steer employees to approved and recommended commercial software, as well as provision and manage the access to and contents of internal apps. It previously announced it would resell Enterproid’s Divide technology for Android, which essentially divides Android devices so that business apps and data are kept on a managed, secured partition, safe from whatever occurs on the user’s segment. The Enterproid product, called Toggle by AT&T, is still in beta but expected to ship this winter for Android; an iOS version is planned.

You can see the appeal to enterprises: a single, known vendor (AT&T) to work with. The truth is that the technology comes from multiple providers, with each managed as separate services, so the effective benefit of that single vendor is reduced. Still, most CIOs are looking to keep the number of technology suppliers to a manageable set, and having AT&T as their primary MAM relationship will have appeal.

The idea is not the problem, but the execution is. Have you ever called a carrier for support on your device? Or brought one in to a retail store? If so, you know the experience is almost always poor. Would any business seriously go in that direction?

As for the antimalware possibility, that’s less scary, but it requires carriers to become a lot more skilled than they are and to stop using services as a way to rope customers into just their networks. That’s less of an issue for the mobile application management tools, as they’re largely managed by IT. They have to be, considering they deal with your policies, your apps, and your users — no outside provider can do more than supply the tools in this case.

I’ve heard a lot of promises from the carriers over the years in how they would add significant value through such services, but they never have succeeded. I’ve also heard a lot of consultants pitching these ideas in hopes of getting carriers to hire them for the project or at least a feasibility study. The carriers often bite, yet nothing has really changed.

Maybe AT&T’s MAM moves — if not its HTML5 APIs — signal that the change is finally starting to happen. I’d be very cautious this early, but I’d at least entertain the notion long enough to see if the reality meets the promise.

This article, “Uh-oh! The carriers want to manage your smartphones,” was originally published at InfoWorld.com. Read more of Galen Gruman’s Mobile Edge blog and follow the latest developments in mobile technology at InfoWorld.com. Follow Galen’s mobile musings on Twitter at MobileGalen. For the latest business technology news, follow InfoWorld.com on Twitter.