The enabling of verbal user-generated content in the form of telecom-based communications has always been at the core of telecom. For converged, quad-play carriers, harnessing the power of user-generated content — both on and off the fixed portal — will be an essential new revenue stream and will provide the missing link to the sale of premium content and other value-added services.

Ever since Alexander Graham Bell made his first phone call, user-generated content in the form of voice — and now data — services has been the bedrock of the telecom industry. In addition to the mass penetration of PCs and digital visual and audio equipment, carrier- and multiple systems operator-provided broadband networks have enabled the new social networking. But with their emphasis on “one-to-many” and community structure, the new social networking sites of MySpace, YouTube and their ilk present both a challenge and an opportunity for the operators.

The threat is an extension of the growing collision of network operators and Internet players; increasingly, they will be hunting for the same customers offering the same services. As the carriers invest billions of dollars on fiber and wireless broadband networks, their business plans assume significant revenue from music and other digital services. These services are the same as those being hunted by over-the-top players like Yahoo and MySpace. The carriers are threatened with disintermediation, and a battle royal is likely to ensue.

Unlike other Internet-centric services, carriers can compete in the social networking arena through their control of the mobile handset and network. There is mounting evidence that end users want mobile user-generated content services from carriers and that the personalized nature of wireless — where community is king — makes it a terrific model to help grow traffic and new revenue streams.

In other countries, user-generated content is headed toward wireless carriers. For example, through its Cyworld mobile and fixed-community site, SK Telecom has captured 90% of Koreans in their teens and early 20s. In the U.K., 3's See Me TV service is attracting more than a million downloads a month from its 3.5 million user base, for which the mobile carrier earns 18¢ a download of high-margin revenue.

3 has found that not only do end users upload and download user-generated videos from their handsets, but the viral nature of the service has encouraged users to go to the carrier's wireline portal. This, in turn, generates click-through revenue from ads located on the carrier's Web site — it is also driving premium content downloads as users are exposed to the array of services already developed at great cost by the mobile operator. As if this were not enough, the citizen journalism, trend, in which news events are captured on the handset by 3 users, has prompted the carrier to act as an agent, selling content to big news organizations like the BBC. New revenue, new business models and new momentum are being created for the carrier.

Mobile user-generated content thus becomes the essential link to the sale of premium content found on the carrier portal. Wireless carriers have a window of opportunity to exploit user-generated content before the Internet players do. This is not just a question of repurposing existing services for delivery onto mobile devices; it is about creating a new service that fits the time- and space-constrained requirements of the mobile user. It is about linking the service to capabilities such as text messaging that the wireless user already values.

Social networking — both driven by carriers and in partnership with other Internet sites — should be pursued with vigor. It should not be left to the fixed social networking sites like Flickr or the upstart, wireless-only sites such as ShoZu and Break.com. Carriers must invest in new technology that enables user-generated content, like BLOGTV's, that allows users to broadcast their own TV shows from their handsets. Carriers must develop the services, partnerships and revenue models to turn this threatening new trend into a powerful growth engine. User-generated content just may be the missing link carriers have been looking for to jump-start non-voice revenues.

Andrew Cole is president of CSMG Adventis, and Bob House is vice president at CSMG Adventis, a telecom and media management consulting firm. They can be reached at andrew.cole@csmg-global.com and bob.house@csmg-global.com, respectively.