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App Ecosystem Aided by Beer, Comfy Chairs

AUSTIN, Texas -- SXSW Interactive -- An application developer lounge like the one Alcatel-Lucent (NYSE: ALU) is hosting here is more than a great excuse to expense a few kegs of beer -- it's a chance to get closer to some of the people driving new services and business models.

Mobile service providers are looking to provide app developers with billing services and other Service Provider Information Technology (SPIT) capabilities that will boost service uptake and usage, such as allowing certain interactive games to be played without eating up a subscriber's data allowance, according to Laura Merling, Alcatel-Lucent’s senior VP of Applications Enablement Platform and Strategy.

And AlcaLu believes it can be the company that brings the developers and mobile operators together.

One way to achieve that is to gain the trust (and fill the stomachs) of the app creators. While developers here are plied with food and drink, they’re openly hatching ideas that will need billing support, network resources and even more granular customer data than they could hope to get on their own.

Of course, they could meet directly with the mobile service providers, but:

  • None of the operators are here, and;
  • As AT&T Inc. (NYSE: T) acknowledged with its Innovation Center effort, most service providers are nothing more than impenetrable bureaucracies to small developers. This is where AlcaLu sees itself as something of a relationship-builder.

    For one example of better developer/service provider cooperation, Merling points to what Angry Birds creator Rovio has done with Elisa Corp. in Finland. The Angry Birds game allows in-application purchases to be made via the carrier billing system, so those charges show up on a customer’s mobile phone bill and the revenue is shared between Rovio, the developer, and the service provider (Elisa).

    Billing could be just the tip of the iceberg, though. Another possible collaboration could allow mobile customers to play interactive games without the data used being counted against the allowance agreed with their mobile service provider. Merling says such an arrangement would increase the chance that customers would buy more in-app upgrades and it would encourage customer loyalty to the mobile operator.

    Why this matters
    Merling says AlcaLu's app-enablement approach is helping mobile operators appreciate that the key to unlocking more revenues from their customers is to make life easier for application developers. Such a focus also helps the vendor shake the perception of being just a box-maker. "It changes the conversation," Merling says. "Service providers are now asking us business strategy questions."

    Also, having a window to better customer data such as network usage habits and location can give developers an edge they don't have currently, as most of that data is locked away in service provider databases. "Service providers are the largest social networks in the world," Merling says. "Why not give developers tools to allow them to create services and then share in that revenue?"

    For more
    — Phil Harvey, Editor-in-Chief, Light Reading

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