Next Generation Services Now Telescope

Say Hello to Telco 2.0

Gurol Akman, CTO, Telenity

Gurol Akman
Gurol Akman
CTO

“As the industry structure for the digital economy continues to evolve, operators are finding themselves unable to offer sufficiently innovative product-centric solutions that meet the demands of consumers and run the risk of losing more and more ground against over-the-top (OTT) players. For operators and vendors, there are valuable lessons to learn from these players. One such lesson is about the "customer-centric" approach employed by OTT players. They place significantly more emphasis on overall user experience and focus on marketing/selling "less of more" niche, personalized services to consumers.”

The basis of market positioning for network operators has traditionally been “product-centric” where they had a clear advantage and lead in offering network-based mass-market services. Note however as the industry structure for the digital economy continues to evolve, operators are finding themselves unable to offer sufficiently innovative product-centric solutions that meet the demands of consumers and run the risk of losing more and more ground against over-the-top (OTT) players. For operators and vendors, there are valuable lessons to learn from these players.

One such lesson is about the “customer-centric” approach employed by OTT players. They place significantly more emphasis on overall user experience and focus on marketing/selling “less of more” niche, personalized services to consumers – an approach that is direct contrast to mass-market service offerings by operators where the emphasis is placed on selling “more of less” services. It is no coincidence many operators already realized the business importance of offering niche (aka long-tail) services and evolved their service delivery platforms (SDPs) to facilitate delivery of such services to their subscribers. Increasing market demand for highly personalized, context-aware services also required network operators to evolve their SDPs to keep track of subscriber preferences, relationships, service usage patterns, and other dynamic data to build subscriber profiles as part of their long-term assets. Customer billing relationship and loyalty are also recognized to be of critical importance as part of an operator’s key assets.

An equally (if not more) important lesson for network operators to learn involves “innovation” and the fact that it does not always have to come in the form of product or technology innovation. OTT players already proved business model innovation carries significantly more importance than any other form of innovation. They further demonstrated there are other means of subsidizing costs (ad-sponsored model being a prime example). Players like Google, Apple, Facebook built platforms and ecosystems around which an expanding set of players continue to collaborate and do business. Getting ready to do business in two-sided markets is a relatively new undertaking for many network operators. That is because operators historically relied on one-sided markets and made heavy use of subscription-based approaches and charging models. Two-sided markets intend to change all this by reducing the strain on subscribers and creating a more balanced, healthier environment.

Shira Levine
Shira Levine
Directing Analyst, Next-Gen OSS & Policy,
Infonetics Research

“Operators are recognizing that their ability to effectively compete against OTT players is directly related to the infrastructure they're implementing on the back end – namely their service delivery platforms. says Shira Levine, Directing Analyst, Next-Gen OSS and Policy at Infonetics Research.”

“Operators are recognizing that their ability to effectively compete against OTT players is directly related to the infrastructure they’re implementing on the back end – namely their service delivery platforms. If operators are to move from a “walled garden” model for application creation and delivery to a more open ecosystem of partners, they must have a framework that supports capabilities such as standards-based APIs for the integration of third party content and the exposure of network and potentially subscriber assets that third-party application providers can leverage as part of their development initiatives, as well as systems that support revenue sharing, end-to-end QoS control, and real-time charging,” says Shira Levine, Directing Analyst, Next-Gen OSS and Policy at Infonetics Research.

Telco 2.0 vision revolves around new business models and claims that for operators to create sustainable long-term differentiation, it is essential for them to experiment with two-sided markets. It advocates emerging business models (B2B, B2C, B2B2C) to be realized through transactional platforms owned by operators. Telco 2.0 promotes exploitation of subscriber related data by operators to serve the needs of upstream & downstream players in unique ways to enable new business and partnerships.

Given the opportunity and challenges involved, nothing better than an SDP can fulfill the needs of Telco 2.0. Note however, on the SDP side, support for Telco 2.0 requires support for new business models; flexible interactions and collaboration between third parties, business and technology partners; advanced authentication, authorization, policy management, enforcement capabilities; real-time charging for wholesale or retail-based enabler use; enabler catalog management; massive scalability (to service higher volumes of lower-value transactions); support for emerging (Web 2.0) technologies.

Operators interested in embracing the Telco 2.0 vision should deploy SDPs that provide extensive support in the following areas:

  • Service exposure and creation tools tuned toward Web developers
  • Unified (services, products, enablers) catalog management
  • Subscriber data (context, relationships, interactions) management
  • Flexible partner ecosystem and relations management

Last but not the least, to take advantage of the endless possibilities of the Telco 2.0 vision, operators should select SDPs that offer considerably more than basic service delivery; they must strive to create a highly flexible, transactional environment that appeals to their prospective business and technology partners where all parties choose to meet and interact with each other to offer a myriad of innovative, personalized services to subscribers.    

 

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