Operator Opportunites in the “New Mobile Web”

We’ve just published a new research report showing that the emergence of the New Mobile Web will challenge native ecosystems as the primary format for delivering content and apps to mobile devices. This shift will create new opportunities for operators seeking to re(enter) the digital marketplace.

STL Partners define the “New Mobile Web” as the culmination of technological advances that have transformed the level of functionality of the mobile Web, creating a user experience that now rivals PC browsing and native applications.

The Mobile Web’s coming of Age

The ‘old’ mobile web was only as strong as its weakest link; often websites were not optimised for mobile devices and network connectivity was slow (not to mention expensive), leading to a poor user experience. This tarnished and diminished the use of mobile browsing and hence native apps have come to dominate – they provided more intuitive and engaging ways to access mobile content and services.

However, we are now coming to the stage where market and technical developments are creating a more consistent and widespread mobile experience that rivals PC browsing and native apps.

  • The HTML5 standard is maturing and being further refined and improved (the W3C plans to finalize the HTML5 standard by July 2014 ). It now offers improved functionality within web-apps, including the ability to access and harness the resource capabilities of devices as well as working offline.
  • Network connectivity has improved significantly – the launch of 4G networks provides users with ultra-fast, reliable connectivity.
  • Better mobile devices – devices are now more powerful and are better optimised to display web content.
  • Improved browsers – the majority of mobile browsers now support the HTML5 feature set.

It is not just the improvements in a single technology that is causing this transformation in mobile, but rather the culmination of these technologies that is strengthening the ‘chinks in the armour’ of the mobile web. STL Partners define this culmination of technologies and enhanced user experience as the “New Mobile Web.”

A bumpy transition to the New Mobile Web

One obvious question to ask is, ‘even if the New Mobile Web can deliver a similar user experience to native apps, why will a transition occur?’ Native apps already deliver a great user experience and are a popular and established format for users and enterprises.

Indeed, STL’s recent research in this area (Figure 1) highlights the importance of this question. The app ecosystems are ingrained in the mind-sets and processes of mobile users. Furthermore the key players in the app economy are keen to preserve the status quo – they have built and now benefit from a marketplace that provides discovery and distribution of apps and content. They will not relinquish this easily.

Figure 1 – Barriers to the Success of HTML5
HTML5 key barriers to success
Source: STL Partners research interviews June 2013


Despite this inertia, the transition to the New Mobile Web will occur. The New Mobile Web is disruptive – it will prove to be the cheaper and more-efficient solution for delivering content and apps to mobile devices.

Gaining access to Apple and Android’s ‘walled ecosystems’ requires a major cost and investment by app developers and enterprises – the fragmentation of the ecosystems also forces enterprises to develop a number of apps in order to provide functionality across the different platforms and devices, which can be costly. Furthermore, these native ecosystems can produce significant delays in getting to market as the apps may have to go through rigorous checks before they are approved. HTML5 web-apps only need to be developed once for all operating systems and devices and can be rolled out directly to market. This is a much cheaper and easier long-run solution for enterprises.

Indeed the issue may be even more fundamental; the pure Web and standalone apps are inherently different beasts. The sheer scope of the Web means that it can represent and deliver much more content than apps. Business and organisations that provide information and engage customers/users over the web often find it hard to justify the investment in producing and maintaining an app; it may not be suitable for their business or organisation and it may be relatively costly. They will however still maintain an active presence on the web and with the rise of the smart phone, engagement is now even more important for mobile. Therefore they embrace a single service that allows users to effectively access their content on mobile devices as well as PCs. The New Mobile Web offers this.

This trend towards the ‘mobilificaiton’ of web content will drive users towards the New Mobile Web, helping to break the app-first mind-set and lead to a shift in the balance of power away from the native app ecosystems.

A word of caution, STL does not believe that this shift will destroy the app world. It will simply rebalance the marketplace so that it more fully reflects the key strengths of both delivery formats. Apps will still play a significant role; their continued advantage is that they are able to offer greater cutting-edge functionality – this is particularly useful for games and other sophisticated software.

How can operators capitalise on this transition?

As previously stated, the pieces of the puzzle are now coming together. The technology has now evolved to a stage where mobile web functionality is approaching that of apps and PC browsing. STL believes that it is not a question of ‘if this transition will happen’ but a question of ‘when and by how much’.

This transition will create opportunities for innovative players. STL’s research has indicated that the main opportunities in the New Mobile Web are around Monetisation, Discovery, Distribution and Loyalty .

Telecom operators should look to capitalise on this rebalancing and the opportunities it presents. Many operators are looking to digital for growth (and many have struggled due to the dominance of the native ecosystems). This shift presents a new arena for them to compete in. Operators are placed to succeed here – they have the requisite assets and capabilities (e.g. experience in billing, loyalty, customer data, device and network management etc.) and the desire to (re)build their presence in digital.

STL have recently published a free research report outlining the opportunities for operators in the New Mobile Web and the different strategies they could implement in order to succeed (which can be found here). The emergence of the New Mobile Web is going to create opportunities for innovative players. Operators should therefore look to ride this wave of digital disruption rather than again remaining marginalised in another power shift.