With regard to a mobile network operator (MNO, or operator), the term dumb pipe refers to an operator’s network being used simply to transfer bytes between the customer’s device and the Internet. The use of the term “dumb” refers to the inability of the operator to restrict services and applications to its own portal and primarily just provide simple bandwidth and network speed.
One widely regarded example of the operator “dumb pipe” scenario is Apple’s iPhone. The iPhone enables its users to directly surf the Internet with its mobile Safari browser and connects to Apple’s iTunes Store for purchasing ringtones and music instead of the operator’s own portal. Operators such as AT&T Mobility cannot offer their traditional services (such as downloads of wallpapers, ringtones, games, applications, etc.) as Apple controls the total iPhone user experience. Operators must be content to provide only the network connectivity and bandwidth which the iPhone has tripled in some cities. In addition to losing valuable revenue opportunities with the customer, operators are rumored to pay Apple a percentage of the customer’s monthly bill as well. While the iPhone is a good example of the dumb pipe, not everyone believes it will ultimately be bad for operators.
Another example of the operator dumb pipe / smart pipe dilemma is the upcoming deployment of WiMAX technology. Companies such as Sprint Nextel and Clearwire are looking into ways to deploy WiMAX with additional services to keep them from becoming dumb pipes.
While there is no real industry standard definition of dumb pipe, it is a generally understood term in the mobile industry. There are numerous blog postings and trade articles which refer to the operator dumb pipe dilemma, some of which are referenced in this article. Others include:
- The Operators vs. the Media Brands
- The Pipe Is Only Dumb If You Make It That Way
- Staying Relevant In A Dumb Pipe Era
A reference which describes the dumb pipe, operator portal (or walled garden), as well as the smart pipe is a report from Juniper Research titled Business Models for Mobile Content Players, Strategic Options & Scenarios 2007-2012:
The author is not affiliated with Juniper in any way, and although the full report requires purchase, there are a number of summaries available on the web:
- Smart-Pipe Strategy to Provide MNOs with 31% Share of $188bn Mobile Content Market by 2012
- Study About MNOs Share of Mobile Content Market
- Mobile Entertainment in Western Europe
A Google search will list several more: