Carriers hold startups back

Posted by Mike Magee in Paris, France

 A senior executive at AT&T Mobility said at a roundtable here that carriers  lacked the infrastructure to support the numerous startups that depended on them.

Mary Pagano, a VP at AT&T EBS-GEM was responding to remarks made by the CEO of Synchronica plc - Carsten Brinkschulte at a roundtable moderated by Financial Times journalist Alan Cane.

He said: "Most startups are dependent on the carriers and I'm seeing a substantial reduction in capex [for startups]. Carriers are avoiding licensing but are in favor of revenue shares. There's a huge risk for startups because of carriers. The startups can lose a lot of money."

Pagano said the carriers didn't have the backup to look after the startups, plus the credit crunch has had an effect. "Everybody's pulling back," she said. "We see it in travel. When a carrier looks at a startup, there's so many of them."

Carriers prefer to offer revenue shares rather than outright licensing, it emerged. But the amount of revenue shares varies widely and the percentage also fluctuates depending on the deal.