Ad-funded services seem to be a rapidly growing part of the mobile advertising landscape. The Telco 2.0 Initiative, a leading telecoms consultancy, offers some interesting insights into what lessons the industry can learn from observing Blyk, the ad-funded MVNO.

For some time now Telco 2.0 has been talking about how mobile operators will eventually have to move towards a “two-sided business model” to be successful. In other words, operators will need to evolve from earning money only from “downstream” customers (ie subscribers) to a model where they make revenue from both downstream and “upstream” players (eg advertisers, retailers, developers, etc).

They have put a lot of thought into this “two-sided” concept, and have greatly expanded on it in a presentation you can see in the Telco 2.0 blog.

Clearly one company which is already very much in a two-sided business is Blyk, the ad-funded MVNO. Just recently, the Telco 2.0 Initiative published an interesting analysis of Blyk, concluding:
“Blyk provides a useful laboratory for two-sided business models . It may not succeed as a company, but there are clear lessons about the role of advertising, how to engage with consumers, and scaleability.”

In the article, the Telco 2.0 team develops a model for the MVNO and examines where Blyk may be making its revenues and margins. The conclusion is that Blyk may well be making as much as £26 per user per month, with 2/3rd of its revenue from upstream customers (advertisers) and 1/3rd from users.

If you are interested in the future of ad-funded services, I highly recommend you read the full Blyk article on the Telco 2.0 blog.

Also read the MobiAD interview with Chris Barraclough, Managing Director of Telco 2.0.