After years of bouncing around PowerPoint slides, the battle between telcos and "Over The Top" insurgents is now very real. It's a scrap that's characterised as Silicon Valley upstarts storming the gates of the closed network world, and that's not a bad nutshell introduction. Long-time OTT champ Dean Bubley of Disruptive …
Certainly many of the bizarro services such as SMS, MMS and expensive international rates will soon be eliminated by IP-based smart phones and their apps.
But the need to finance, provide and run the extremely expensive wireless infrastructure remains. Smartphones are already maxing out UMTS networks and all the new apps surely will assure this in the next ten years. Soon some facebook-style thing will introduce video messaging/posting or some kind of virtual-reality kinky business, which generates a lot of data volume.
So to conclude, the prospects of the wireless operators look better than ever. They just have to come to terms with losing "profit centers" such as SMS and replace that by the Huuuuuge data traffic of the future.
Re: Kindergarten Economics
Indeed, stop fudging the phone plans to hide where the costs are. They could go "all-ip" or provide voip-type services and charge properly for the network costs they incur.
Then you could pick your telco based on how good the network is vs price rather than some random subsidy on the latest iphone.
Legislate them into being utility companies that only provide bandwidth.