How to identify and meet new customer needs

Customer-led innovation at Telia and Elisa

In order to secure competitive advantage and long-term growth, telcos need to identify and meet new customer needs. The importance of this is confirmed by the STL Partner’s Telco investment priorities survey published in January 2021. Understanding customer needs and innovation, both essential for addressing new needs and driving growth, featured in the top ten priorities.

Telco top investment  priorities

top-telco-investment-priorities-stl

Source:  STL Partners, Telecoms priorities: Ready for the crunch?

This report seeks to identify best practice for telcos. Through in-depth interviews with senior managers in Elisa and Telia, and an expert in disruptive innovation, we identify the critical success factors and lessons learned in these organisations.

Telia created Division X in 2017, a separate business unit focused on commercialising and growing revenue from emerging businesses and technologies such as IoT (including 5G), data insights, and digital B2C services. Its focus is on customer needs and speed of execution, to spearhead and accelerate innovation, which it deems necessary in Telia’s drive to “reinvent better connected living”.

International Digital Services is Elisa’s third main business division, alongside Consumer and Corporate, which serve the domestic market. As International Digital Services has matured, it has focussed specifically on addressing new needs and developing new services, in both industrial and corporate domains.

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The report is based on interviews with:

  • Liisa Puurunen, Vice President, Brand, CX and start-ups, International Digital Services, Elisa — Liisa has a background in leading new businesses and start-ups in Elisa in the Consumer division and International Digital Services. Liisa’s role is to understand where there are new needs to be met, and to get best practise in place across the whole customer journey, within both industrial and corporate domains.
  • Annukka Matilainen, Development Director for Omnichannel and Smart Automation, Elisa —Annukka led the Consumer team’s response to COVID-19
  • Stephanie Huf, Head of Marketing, Division X, Telia — Stephanie’s role is to support the business lines in Division X to in engaging with customers to identify their needs. For example, her team identifies what customers want, defines the value propositions and works with product and business teams to test these in line with customer insight. (Since participating in this research Stephanie Huf has moved to a new role.)
  • Anette Bohman, Strategy Director, Division X, Telia  — Anette supports and guides Division X in defining Telia’s future.
  • John McDonald, FIRSTEP — John is a strategist in disruptive innovation in the health industry in Canada. He helps leaders create alignment around how the forces of disruption are unfolding and where to place the bets. FIRSTEP works with health organisations searching for fresh insights that spark new opportunities for growth.

Create a separate team to maximise new business opportunities

A separate team has many benefits

New business requires a separate, dedicated team. Its needs are different from day-to-day business and it needs its own focus.

One of the biggest learnings for Elisa in addressing new opportunities, is that there needs to be a ‘sandbox team’ with its own resources and budgets, rules, methods and mindset. It must have access to senior managers for decision making and funding, and strong leadership.

The sandbox team needs to be remote from the demands of day-to-day operations and implementation. If finding new needs is only part of someone’s job it is difficult to manage, as short-term demands will inevitably take precedence. Delivery and experimentation are different functions and they should be separate.

Liisa Puurunen’s team is a start-up in its own right. It is leaner than the usual Elisa approach and people are only brought into the team when there is a test to be done, keeping it flexible.

Rationale for a separate team

separate-team-rationale
Source: STL Partners

Contents

  • Executive Summary
    • Create a dedicated and separate team
    • Take a customer centric approach at all stages of innovation
    • Types of innovation will meet different new needs
  • Introduction
  • Create a separate team to maximise new business opportunities
    • A separate team has many benefits
    • Telia Smart Family: The case for a separate innovations team
    • Evaluate success in relevant ways that may be non-traditional
  • Take a customer centric approach to all stages of innovation
    • Ensure a customer centric culture
    • Start with a customer problem
  • Meeting needs and scaling bets
    • Co-create with customers, but choose them carefully
    • Elisa’s empowered teams enable a successful response to COVID-19
  • Types of innovation to meet different new needs
    • New needs in the core versus new businesses
    • Dedicate some resource to extreme innovation
    • Telia Data Insights: New Business innovation in response to COVID-19
    • The case for disruptive innovation
  • Plan exit strategies
    • Perseverance and pivoting can bring success
    • Be prepared to kill your darlings

Related research

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Digital Entertainment 2.0: Telcos risk missing the UltraViolet online video opportunity

Summary: 2011 sees the introduction of the UltraViolet digital locker platform by DECE, a consortium led by 6 of the 7 top Hollywood studios and backed by 50 more cross-industry heavyweights. This anticipates and supports the transition of film and TV to online distribution. Here we analyse the opportunities telcos will miss out on if they fail to engage with DECE.

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Alternatively, please email contact@telco2.net or call +44 (0) 207 247 5003 for further details. There’s also more on DECE UltraViolet strategies at our AMERICAS, EMEA and APAC Executive Brainstorms and Best Practice Live! virtual events.

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In our Executive Briefing entitled, Entertainment 2.0: New Sources of Revenue for Telcos we laid out a series of trends that are changing the video market and the opportunities and challenges this poses for telcos. In this Analyst Note, we examine the ways in which DECE’s UltraViolet will impact the market and explain why telcos can’t afford to adopt a ‘wait, see and proctect approach to its introduction.

DECE UltraViolet explained

DECE UltraViolet has been created in anticipation and support of the switch-over of video content from physical to online distribution. It aims to offer consumers an ultimate level of flexibility as they can not only own, store and manage their content through a digital locker but also share it with family members and view it anywhere through a wide range of devices from TVs and PCs to tablets and mobile phones.

Figure 1 – The UltraViolet proposition: buy once, play everywhere, forever, for the whole family 

Source: Telco 2.0

Furthermore, it provides the video industry with a real alternative to piracy based on an open platform with licensable specifications, not a proprietary system such as Apple’s. The platform is set up to support multiple business models and rentals are expected to follow relatively quickly, which explains the interest of Netflix and LoveFilm (now part of Amazon) in the initiative, but at launch it will offer only online purchase.

Finally, the digital locker meta-data will provide a single view of customer buying and viewing preferences on which future planning can be based.

It is not surprising therefore that the initiative has attracted a powerful and active membership comprising in excess of 50 companies including 6 of the 7 major studios, network equipment and consumer electronics vendors, service providers and retailers. Notable exceptions to the current membership are Disney, which has its own digital locker, and WalMart, which has a deal with Apple. Both, however, are free to join at a later date as it is an open platform.

UltraViolet is due to launch in the US in the middle of 2011, with Canada and the UK following towards the end of the year before a full international rollout begins in 2012.

Virtually all the players involved in the video distribution ecosystem from content owners to retailers have their own plays in online video distribution but they are still heavily involved in DECE because they understand that it has the potential to impact on their existing and future business plans. This is not the case with telcos, with a few notable exceptions such as BT which is a member of DECE.

Telco’s adopt a “wait, see and protect my network” strategy

Most telcos seem to be cautious and sceptical about UltraViolet and digital content lockers in general. Rightly or wrongly, they perceive that UltraViolet faces major challenges and represents a headache for them rather than an opportunity.

They appear to doubt that they need digital locker content to drive use of their services and see little margin in retailing movies. Furthermore, mobile network operators in particular are concerned about the impact of video streaming on network congestion and will not hesitate to institute network policy rules that will curtail this perceived “damage”.

Without a clear opportunity for “delivery” income for telcos (for x-plan MBs, QoS, guaranteed bandwidth), or clear business models for moving to this, there is limited incentive for them to step up their interest. We have therefore observed three general telco responses to DECE. For clarity, we have described these as three discreet positions but, in reality, telcos can and do pursue combinations of these.

Telco2.0 believes that there is a potential opportunity for telcos to adopt a more pro-active approach to DECE through an early-adopter strategy as:

  • The entertainment market is large and premium entertainment key
  • Entertainment plays a key role in securing consumer attention
  • DECE UltraViolet has the ingredients for success
  • UltraViolet represents an opportunity for telcos as suppliers to the ecosystem
  • Telcos share a common interest with DECE

Each of these reasons is discussed in detail in the sections that follow.

Entertainment: A market too large and valuable to ignore

The global entertainment market is huge and as such is obviously attractive to telcos looking to counter falling ARPUs. It accounts for a considerable share of disposable income and overall entertainment spending is much higher than that on telecoms.

In the UK, which as the leading western European market is to a degree indicative of most developed markets, the average household monthly spend on entertainment is more than double that for communications. Furthermore, the decline in communications spend has been faster than that for entertainment over the last five years and this is despite the rapid decline in music sales revenues.

Figure 2 – Comparative monthly spend on telecoms and entertainment in the UK

  

Source: STL Partners Estimates, OFCOM – UK Regulator

Of course UltraViolet is not yet targeting entertainment in its entirety or even all of the home entertainment video market. Instead it is initially setting its sights on the retail market through online sell-through and that is currently very small, accounting for a mere $590 million in 2009 and the lowest contributor of all entertainment sectors to online revenues.

Figure 3 – Digital film downloads are so far the lowest revenue generators in online entertainment

 

Source: Telco 2.0

It is perhaps not surprising therefore, that telcos have not seen this as a particularly inspiring target segment. However, online sell-through is a nascent market and one we believe has exponential growth potential.

This is certainly proving the case for online rentals. According to Bain’s figures presented at the 9th Telco 2.0 Executive Brainstorm in Santa Monica, 80% of US consumers already view video online and Netflix streaming services now account for 20% of total US internet traffic, twice YouTube’s share. Furthermore, by 2014, 60% of TVs will be connected to the Internet, addressing the major remaining barrier to take up by connecting the primary viewing device to online video content.

Sizing the market

Attempts to accurately size future markets are always fraught with inaccuracy, and none more so than punts on film and TV entertainment, as the outcome will always be dependent on the quality and appeal of the content as well as many other factors.

That aside, we are convinced that the market can grow much faster than currently predicted. In fact, we see DECE UltraViolet as capable of stimulating market growth for digital sell-through similar to that of Apple (depicted below). We expect it to grow its share of the home entertainment market from 1% to 13.5%, providing a sizable target market and one that will continue to grow for some time.

Figure 4 – An Apple-style growth is possible for online sell through with UltraViolet

 

Source: PriceWaterhouseCoopers, Apple, Netflix, Telco 2.0

UltraViolet’s growth potential should at least put it on telco’s ‘strategic interest radar’, especially as it has been designed to accommodate multiple business models, including the rental models in the future.

However, we would argue that waiting for the growth to happen is missing more than one opportunity. The first is to influence in the platform’s development and, perhaps even more importantly, the second is to fit it into and around other strategies that are currently developing in silos, namely video services, customer retention and digital shopping malls.

Low margins put off telcos – but they miss its attention value

There is a set of telcos that believe that TV and film content neither offers the kind of margins they require, nor differentiation, as content owners have proven that they are unwilling to negotiate exclusive deals with telcos that can usually only reach a minority proportion of any national market.

Again, we believe this is missing a point for any telco looking to develop a significant retail play. Certainly it is true that margins are low. Tesco, the world’s third largest retailer by revenue, has revealed that it is currently making next to no margin on its physical video business and there is no reason to assume it will be significantly better online. However, the business case for entertainment products developed by what we consider a ‘master retailer’ is not based on sales but instead on footfall and the overall size of the shopping basket. Indeed, it is going all out to develop the same relationship online between entertainment product sales and fuller baskets.

Tesco is developing a digital Locker platform that works across multiple devices to deliver a joined up experience and drive impulse buying. It is a staunch supporter of DECE/Ultraviolet and plans on using it, rebranded as InvisiDisc, as a central part of its entertainment platform.

Figure 5 – Tesco puts digital locker at heart of portal proposition

 

Source: Tesco Presentation, 11th Telco 2.0 Brainstorm, EMEA

As the Tesco example proves, while margins on the products themselves can be small or non-existant, there may be significant other benefits. Tesco see that the overall basket spend is significantly higher when it involves an entertainment product, and entertainment is a both an impulse buy and an attention draw.

Furthermore, the investments that have been made in infrastructure by the DECE group means the entry costs are lower. For the few telcos that don’t have an entertainment platform, UltraViolet offers an opportunity to join the party and use that infrastructure to access what is expected to be premium content which they can offer to customers through their own retail portals. For the majority that already have their own platforms consideration should be given to adding UntraViolet into the mix for what is lost in duplicating infrastructures could be gained with premium content.

Entertainment’s primary role in securing consumer attention

Many upstream services rely on the ability to secure consumer attention and sell this on to third parties in some form. This is the basis of the advertising-based business models, including the one that dominates the Internet. Entertainment is a major tool in attracting and maintaining consumer attention as it has such a high profile in the minds and lives of consumers (as exemplified by the UK figures in the chart below).

Figure 6 – Comparative daily usage of entertainment and telecoms in the UK (2009)

Source: STL Partners Estimates, OFCOM – UK Regulator

The difference in the time spent by consumers on communications services and entertainment is stark and reflects the fact that while communication is a vital part of everyday life, entertainment holds their attention more. This is particularly important and valuable when developing portal and other upstream strategies. as exemplified by the value retailers such as Tesco that are using it as a key part of their online strategy.

DECE UltraViolet has a recipe for success

The ability of online entertainment delivery platforms to move the needle should not be in question. Netflix and LoveFilm have already made an impact with online rentals, while Apple’s success is indisputable. To do this they have introduced services that have a utility value combined with innovative and disruptive business and pricing models. Using these experiences as a base reference, we have identified the following as important success factors for online distribution platforms:

  • Offering new and premium content in a timely way and from many owners;
  • Creating a substantial back catalogue quickly;
  • Delivering to all devices that consumers wish to use and that are in the market;
  • Supporting the legal transfer of content between devices and people;
  • Creating a differentiated value proposition;
  • Introducing services with a disruptive model and pricing;
  • Creating multiple channels to market;
  • Future-proofing so that consumers don’t lose their content as devices and technologies develop;
  • Providing links between physical and online products to ease the transition.

In theory at least, UltraViolet has strengths across all these.

UltraViolet is getting the proposition right

UltraViolet’s basic proposition of ‘buy once, play everywhere, forever, for the whole family’ is a new and valuable one that overcomes many of the frustrations consumers have with online video content as it offers:

  • A single point of access to content from multiple content owners;
  • The ability to buy once and view content on up to 12 devices;
  • The ability for up to 6 family members to view the same content.

This creates a new and differentiated value proposition and supports the legal transfer of content between people and devices, as well as the capability to view on a full range of devices now and in the future.

It is an open platform based on interoperable standards and licensable technology specifications. So far DECE has laid out some the technical framework for a Common File Format which means video files are encoded and encrypted just once, as well as the technical design specifications for each of the six major categories of company – content providers, retailers, streaming service providers, device and application providers and digital distribution infrastructure providers. These ensure that all players are working in the same way and services will be interoperable. (See Can Telcos Help Save the Video Distribution Industry for more details).

All the right backers…

This is a unique and highly valuable proposition and one that has attracted a great deal of support and attention from those currently active in the value chain with the exception of telcos. All the major Hollywood studios bar Disney, which has its own digital locker solution, are behind the initiative which should ensure high quality and desirable content from the start and gives potential access to a huge back catalogue. Indeed, it is widely accepted that the studios will promote new content through UltraViolet first, providing an online alternative to the DVD/Blu-ray sales window.

This is highly significant for telcos that have so far been satisfied to stick to delivering their own content services through VoD, IPTV and mobile believing they have an advantage in providing a multi-screen service as they have the potential to control the delivery quality and have understanding of the user’s device.

However, they are still reliant on content deals with studios to secure the types of films and TV programmes that consumers want. These are usually based around the fourth pay TV window, meaning that consumers would get to new content earlier through UltraViolet than telco VoD services. For this reason we believe that telcos ignoring DECE as part of their downstream consumer entertainment services are missing an important plank in their strategic portfolio.

Furthermore, online service providers are well represented, as are device manufacturers, while traditional retailers, with the notable exception of WalMart which has an existing relationship with Apple, are also putting their weight behind it, providing multiple channels to market.

…with a common and urgent motivation

Beyond the appeal of the consumer proposition, DECE UltraViolet is also appealing because it offers a credible alternative to both piracy and Apple that have dominated the transition of music content distribution online.

As we’ve previously discussed in Digital Hollywood: How to out-Apple Apple, Apple dominates online music and is constantly adding more TV and film content. With over 150 million account holders it is the biggest music retailer in the world and has created the first and so far the dominant business model for digital online retail with its 30/70 revenue share deals. It no longer includes optical drives in any of its current product portfolio as it hopes to drive more film and TV content to its digital store, expanding its content range and reinforcing its existing business model.

To read the Analyst Note in full, including in addition to the above analysis of:

  • Apple, piracy and the motivations of the DECE membership
  • The continuing importance of the physical product
  • UltraViolet’s upstream potential
  • Recommendations for telco entertainment strategy development to include DECE/UltraViolet

…and additional figures…

  • Figure 7 – Apple’s 5-screen Strategy
  • Figure 8 – BD Live proposition provides link between physical and online
  • Figure 9 – Generic 2-sided model for entertainment
  • Figure 10 – US: Traditional video distributors and cable companies are most under threat, as online viewing continues to increase
  • Figure 11 – Potential roles for telcos in digital lockers

Members of the Telco 2.0TM Executive Briefing Subscription Service can download the full 19 page report in PDF format here. Non-Members, please see here for how to subscribe. Please email contact@telco2.net or call +44 (0) 207 247 5003 for further details. There’s also more on DECE UltraViolet strategies at our AMERICAS, EMEA and APAC Executive Brainstorms and Best Practice Live! virtual events.

Telcos vs. Internet Players: Act before it’s too late

Summary: There’s less than 3 years for telcos to take advantage of key strategic ‘control points’ in their battle for sustainable growth in the communications and e-commerce markets, concluded delegates at the Telco 2.0 EMEA Brainstorm in November. How should they think differently about their value and where do they need to (re)focus their attention? Full report from the Brainstorm..

40 page PDF format report, summary and except below.

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Alternatively, please email contact@telco2.net or call +44 (0) 207 247 5003 for further details. There’s also more on adjacent player strategies at our AMERICAS, EMEA and APAC Executive Brainstorms and Best Practice Live! virtual events.

Executive Summary

There’s little time left to take new opportunities

A new framework for thinking about growth opportunities in the communications sector and the value that telcos can add to other industries in the wider ‘digital economy’ was presented by analysts from the Telco 2.0 Initiative and debated by senior strategy execs from the Telecoms, Media and Technology sectors at the 11th Telco 2.0 Executive Brainstorm, EMEA, on 9-10 November 2010, incorporating Digital Entertainment 2.0. The six key telecoms growth opportunity areas are:

The Six Telco 2.0 Opportunity Areas

Delegates concluded that two in particular, B2B Enabling Services and B2B Distribution Platforms, are being particularly underinvested in compared to their potential future value. The big concern was that time is running out for the slow-moving telco industry to take advantage of some key strategic ‘control points’ in the communications and e-commerce value chains, beyond pure data transportation. In a vote participants rated the time remaining for telcos to retain or build a strong position versus internet players and other competitors as follows (see Fig 1 below):

  • Less than three years for ‘Identity and Authentication’ (part of ‘B2B Enabling Services’);
  • Less than two years for ‘Transactions – Advertising & Payments’
  • Less than two years for ‘Address Book and Communications Initiation’
  • Less than two years for ‘Home Devices’
  • Less than one year for the ‘Mobile Device and OS’ (although nearly half thought the opportunity has already gone).

In contrast, other players are not waiting. Telco 2.0’s analysis of Facebook’s ambitions in communications added to the sense of urgency required by telcos.

Doing the core job better

Part of Telco 2.0’s argument discussed at the brainstorm is that, in parallel with ensuring telcos don’t lose strategic control points, there are certain core areas of business in which telcos need to make specific improvements in order to position them effectively to take advantage of new growth opportunities. Two important areas are:

Broadband access, for which it is important for telcos to establish more sophisticated business models, particularly those in which new ‘upstream’ (3rd party) customer revenues are generated;

Being a better digital retailer (part of ‘Enhanced Telco Retail’), in order to maximise loyalty, trust and relevance, not just for the clear business benefits that this provides, but also because many of the new ‘two-sided’ market opportunities require a scale and quality of customer base that this will enable. Participants clearly recognised the value of this, but also saw that much more needs to be done here.

Seeking viable roles beyond connectivity and ‘one-sided’ retail

The Brainstorm examined a number of emerging growth areas in depth, each a subset of one of the Six ‘Telco 2.0’ Opportunity Areas.

  1. Cloud Services 2.0 (part of ‘Infrastructure Services): With technology developing fast and customer case studies of cloud usage becoming compelling, IBM forecasts a public cloud market of $85bn by 2015, growing at around 25% CAGR, with telcos having the opportunity to take anywhere between 30-70% of it. After a presentation by Oracle on potential use cases for telcos, the participants voted that ‘network-as-service’ (public IT cloud but including key telco network capabilities) offered the greatest opportunity for telcos to add value and differentiate. It’s still early days but this is a market that must be grabbed fast. . Telco 2.0 has set up a new Cloud Services Research stream.
  2. Machine-to-Machine 2.0 (M2M – straddling ‘Own Brand OTT’ and ‘B2B enabling Services’): M2M may be coming of age at last, though whether telcos will play a profitable role in the opportunity depends on whether they can deliver a combination of low-cost economics connectivity, added-value enabling solutions, and horizontal platforms that enable developers and ultimately end-users to connect and manage devices easily and innovate on top of. Telco 2.0 has been asked by the industry for more analysis of the opportunities in this space ‘beyond connectivity’.
  3. Personal Data 2.0 (a key underpinning of ‘B2B Enabling Services’ and ‘Enhanced Telco Retail’): 2011 may turn out to be the year that the Personal Information Economy was born, with high-level focus on the enabling commercial and legal structures for building trust networks for personal data being developed and promoted by the World Economic Forum (WEF). While the precise business models and roles of different players are emerging, it is clear that most of the major Information Technology players, including telcos, recognise ‘Personal Data’ as an important market to play in even if, at the same time, it fills them with trepidation. Further Telco 2.0 research and analysis here.
  4. Digital Entertainment 2.0 (cutting across multiple categories, from ‘Enhanced Telco Retail’ to ‘Vertical Industry Solutions’ to ‘B2B Distribution and Enabling Services’): while the online share of the entertainment industry is today relatively small, the impact of online behaviours has not been. The anticipated disruption in the video market is significant. Telcos have a range of latent capabilities that are (theoretically at least) very valuable to the entertainment sector concept. A key starting point for a new level of strategic collaboration between the industries is in the area of “Digital Content Lockers” such as developed by the DECE/UltraViolet Hollywood consortium. Telco 2.0 will be working to catalyse Industry engagement with this in 2011, and looking at the economics of ‘on-demand’ TV and online gaming as part of its Digital Entertainment 2.0 Research programme.
  5. Augmented Reality (part of ‘B2B Enabling Services’): ‘AR’ is a fast growing phenomenon outside the telco sector but relatively neglected within. Telcos could take on a stronger intermediary role, adding value by tracking the end-to-end performance and delivery of services. But more detailed analysis is needed to identify precise roles and market opportunities.

The rest of this report provides detailed analysis of all the brainstorming from the event. STL Partners, the analyst firm behind the Telco 2.0 and Digital Entertainment 2.0 Initiatives, will continue to research these and other related new business model opportunities and provide a forum for high quality debate at our online and physical events in 2011:

 

The following is an excerpt from the body of the report

There are opportunities, but can telcos take them?

  • “The level of dividend payments being taken means the Capital Markets are in effect saying to telcos ‘give us the money before you blow it on something stupid’.” Richard Kramer, Arete Research.
  • “Telcos did have an opportunity in the 6 opportunity areas but have been too slow and will find it difficult to oust others who are now securing valuable positions in the ecosystem.” 49% of Telco 2.0 EMEA Brainstorm Delegates.

Viable opportunities and strategies to innovate and develop new sources of value exist, yet there are also doubts about the telecom’s industry to exploit them in time. At the Brainstorm, Chris Barraclough, MD & Chief Strategist, Telco 2.0, presented 10 of the 17 ‘Principles for Success in a Disrupted Markets’ and outlined the six new Telco 2.0 Opportunity Areas described in the forthcoming ‘Roadmap to New Telco 2.0 Business Models’ Strategy Report (see diagram above).

Overall, despite their concerns on the urgency of action, delegates considered that all of the outlined opportunities had merit, and that some key areas are currently relatively underinvested in compared to their perceived potential. While Enhanced Retail and Infrastructure Services (i.e. enhanced wholesale) were understandably rated most highly, B2B Enabling Services and Distribution Platform showed the biggest gap between potential and investment.

Figure 1 – B2B Enabling Services and Distribution Platform Need Investment

Vote on Key Control PointsSource: Delegate Vote, 11th Telco 2.0 EMEA Brainstorm

How much time do telcos have left?

Figure 2 – Other than “being a pipe”, Telcos have the most time and Opportunity to address Identity & Authentication Capabilities

[Q. What is your opinion of the amount of time that telecoms operators have to either retain OR build a strong position (versus internet or other players) in each of these ‘ecosystem control points’?]

How much Time Left?

Delegates broadly viewed telcos opportunities to hold the control points in the ecosystem in three groups: “the pipe”, which whether “dumb” or “happy” will be the domain of telcos for the foreseeable future; mobile devices and OS which they have already lost; and a middle-range comprising home devices, advertising and payments, address book, and identity and authentication. Of these, telcos are perceived to be in a significantly better position on identity and authentication.

Is there a danger of telcos repeating bad old habits?

  • “All you need to do to make the enablers opportunity go away is wait.” Andrew Budd, Chairman, MEF.

A similar chart to Figure 3 drawn up 5 to 10 years ago would have shown “Location Services” as an equal or better prospect than “Identity & Authentication”. Yet location today no longer registers as an opportunity because of the success of other players finding alternative ways to provide this information. In their eventual efforts to enable location, Telcos were late to the market, disjointed in that they did not offer common solutions across the industry, and overpriced.

It is intriguing to look at two other examples that may reflect this trait.

First, in the case of mobile Apps, operators have now created the Wholesale Applications Community (WAC), which is, at least, a common approach to the market, but which will struggle to establish operator control in this area if the delegate vote and evident strength of the Apple and Android ecosystems is anything to go by However, Telco 2.0 believes that WAC may succeed in enabling a second tier of appstores or segmented “app malls”.

Secondly, Vodafone presented its closed, vertically integrated M2M strategy at the event, which as smart and well-conceived as it is in many ways, still lacks the level of openness that customers will ultimately want from M2M applications.

In the area of Personal Information, Identity, and Authentication, operators do have a chance to do something, and there were suggestions from Vodafone in EMEA, and AT&T in the US, that telcos may act. But will it be enough, and sufficiently aligned and open to create a new role for the industry?

To read the report in full, covering in addition to the above…

  • Facebook is not waiting (full Briefing here)
  • Mobile Broadband: booming, but what is the best business model?
  • Cloud 2.0: Clearing Fog, Sunshine Forecast
  • M2M: A Late Developer?
  • Being a Better Retailer: Two Innovative Consumer Services
  • Personal Information: “The Meaning of PIE”?
  • Digital Entertainment 2.0: Changing Consumer Behaviours and “Digital Lockers”
  • Augmented Reality: telcos as intermediaries

…and including…

  • Figure 1 – The Six Telco 2.0 Opportunity Types
  • Figure 2 – B2B Enabling Services and Distribution Platform Need Investment
  • Figure 3 – Other than “being a pipe”, Telcos have the most time and Opportunity to address Identity & Authentication Capabilities
  • Figure 4 – Facebook’s Communications Ambitions?
  • Figure 5 – Deutsche Telekom’s View on Mobile Broadband Growth
  • Figure 6 – 3D TV ‘Use Case’
  • Figure 7 – IBM’s Cloud Services Forecast, 2010-2015
  • Figure 8 – Oracle’s Seven Steps to Cloud Heaven
  • Figure 9 – EMEA Delegates favoured the ‘Network-as-a-Service’ Opportunity
  • Figure 10 – T-Mobile’s Forecast of European M2M Markets
  • Figure 11 – Vodafone’s Global M2M Platform
  • Figure 12 – The Key Challenge for M2M Growth is to Create a Broad, Open Market
  • Figure 13 – Orange’s Innovative PromoTonos Service
  • Figure 14 – Movistar Argentina: Customer Centric Identity Management (IDM)
  • Figure 15 – How the ‘Two Sided’ Telco Business Model Can Help the Digital Entertainment Industry
  • Figure 16 – What Will Happen to the Global Entertainment Market?
  • Figure 17 – Delegates: Pay TV Will Lose Out (Share of Votes)
  • Figure 18 – “Digital Lockers”: The Way Forward?
  • Figure 19 – Tesco Connect: The UK’s Top Retailer’s Digital Locker
  • Figure 20 – Ericsson: the Impact of Tablets on the Consumption of Personal Entertainment
  • Figure 21 – Telcos can sit at the centre of a new ecosystem without controlling the development of apps
  • Figure 22 – AR connects the things around us with a mass of personal and public information from the Internet

…Members of the Telco 2.0TM Executive Briefing Subscription Service and the Dealing with Disruption Stream can read the Executive Summary and download the full 40 page report in PDF format here. Non-Members, please see here for how to subscribe. Please email contact@telco2.net or call +44 (0) 207 247 5003 for further details.

Report Background

This report includes a summary analysis of all the brainstorming and voting from the 11th Telco 2.0 Executive Brainstorm (EMEA), held in London on 9-10 November 2010 with over 150 execs from the Telecoms, Media and Technology sector, and incorporating the 3rd Digital Entertainment 2.0 Executive Brainstorm. It was organised and facilitated by analyst firm STL Partners – founders of the Telco 2.0 and Digital Entertainment 2.0 Initiatives – using their interactive ‘Mindshare’ format.

The aim of the event was to review and debate new business model concepts and current best practice related to the upcoming Telco 2.0 strategy report, ‘From Theory to Practice: the Roadmap to ‘two-sided’ Telecoms Business Models’. This analysis centres around a new framework for thinking about growth opportunities in the communications sector and the value that telcos can add to other industries in the ‘digital economy’. The Executive Brainstorm looked at:

  • Day One: Telco 2.0 Growth Strategies: Disruptive Strategies and Business Models; Net Neutrality and its Impact on new Business Models; Cloud Services: Show Me The Money (and Profits); Sweating the Asset Base to Deliver More Value; and Managing the Co-opetition: Facing up to Facebook.
  • Day Two (am): Digital Entertainment 2.0 – Multi-platform distribution: Online Video – new disruptive strategies and business models; Defining the Next TV Experience; Optimising online content distribution.
  • Day Two (am): Consumer 2.0: Becoming a better Telco retailer; Using Personal Data Outside the Firewall – the emergence of a new asset class; Securing a Piece of the PIE – what role for telcos in the Personal Information Economy.
  • Day Two (am): M2M and Embedded Mobility 2.0: Opportunities, challenges, business models; Adding value to connectivity – Horizontal strategies for service enablement; Overcoming customers’ practical issues to creating the ‘internet of things’.
  • Day Two (pm): Digital Entertainment Meets Consumer 2.0 & M2M 2.0: The Connected Home; Augmented Reality and Mobile Apps.

This report is ordered by event session, and includes an analysis overview, a short summary of the objectives of the relevant session and a list of the stimulus speakers. The brainstormed comments, ideas and questions and the votes have been included verbatim, and organised under a colour-coding to make them more digestible.

Many thanks to everyone who contributed to the brainstorm, the output of which will inform our ongoing research programme for the Telco 2.0 (on this site) and Digital Entertainment 2.0 (www.digitalentertainment2.com) initiatives, along with two new programmes for 2011: Mobile Apps 2.0 and Personal Data 2.0.

In particular we would like to thank the event sponsors without whom the event would not have been possible: Platinum – Ericsson; Gold – Aepona, Aito, Aricent, Blyk, IBM, Intel, Nokia Siemens Networks, Oracle and Ubiqisys; and Bronze – Huawei, Juniper, Martin Dawes Systems, Metaswitch and Wipro. And to our collaborators: Analysys Mason, Arete Research and the World Economic Forum.

The next Telco 2.0/Digital Entertainment 2.0 EMEA Brainstorm will be held on the 17-18 May in London. In the meantime, there is a FREE global ‘virtual event’, online on 2-3 February 2011 and the 12th Telco 2.0/Digital Entertainment 2.0 AMERICAS Executive Brainstorm on 5-6 April 2011 in San Francisco (more here).

The ‘Roadmap to New Telco 2.0 Telecoms Business Models’ report will be published in early 2011.

Full Article: Pilot 2.0 – How to activate Telco 2.0 business models quickly using legacy systems

NB A full PDF copy of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Pilot 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0′ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Retail Services 2.0, Content Distribution 2.0, Enterprise Services 2.0, Open APIs, Technical Architecture 2.0, and Devices 2.0. In addition there is an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

 

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points.

 

Background to this report

Sometimes new business models feel too complicated to undertake. However, new methods and technologies are enabling operators to trial new business models without having to change their existing systems or processes. This session takes, as an example, a key Telco 2.0 ‘use case’ that combines video distribution, advertising and customer data, and shows how operators could activate it fast.
 

Brainstorm Topics

  • Where to start with Telco 2.0?
  • How to minimise the cost and disruption of entering the Telco 2.0 market?

 

 Stimulus Presenter

  • Andrew Thomson, VP Global Solutions, Infonova

 


 Facilitator

  • Simon Torrance, CEO, Telco 2.0 Initiative

 

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

 

Stimulus Presentation Summaries Pilot 2.0

Andrew Thomson, VP Solutions, Infonova said that Telcos have a huge diversity of legacy networks which they are now transitioning to common IP systems, and also a huge investment in associated BSS-OSS and MIS. At the same time, the BSS-OSS processes are moving from batch-processing to real-time working.  With this complexity, transformation can only really be done in stages resulting in new and old systems coexisting. Managing this is a serious challenge.

So where do we start? There are a number of possible entry points:  New bundles; a new app store; order-to-cash; new channels:

Bundling

A non-intrusive approach to bundling; this means that  an aggregator handles the interfaces to both wholesale customers and to the retail side, fixed and mobile; it can also drive the Business Intelligence and reporting processes.

App Store

In the app store example, the aggregator is a platform acting as a proxy for multiple sources of APIs in order to drive a multi-operator, or operator multi-network, app store. It wraps the operator, or primary operating entity, and other operators in order to provide a single virtual interface for developers and multiple virtual operators for end users.

Order to Cash 2.0

Operators could create a new revenue source by using the capabilities enabled by the BONDI initiative to let customers choose services from other carriers directly from the handset.  This sounds like a threat, but by the same token you could include many other services and businesses in your own bundles. Aggregation, again, is a crucial enabler for this – someone needs to aggregate services from multiple operators

New Channels

Why not use car dealers? Bundling navigation, commications, or security tracking with the vehicle would be tremendously attractive to car dealers and end users. This then opens up a lot of other possibilities – advanced advertising and marketing, and you could deploy the full range of Telco 2.0 features in order to provide extensive customer feedback.

In summary, the latest technology applied as an external aggregator bureau is actually cheaper and quicker than legacy. This makes a wide range of new business models possible.  We think this will lead to a crisis for the systems integrators.

A question from the floor: This bureau model may further commoditise the network. How should we deal with this risk?

Andrew Thomson replied that it might have that effect. New technologies have a big effect on these things – as the presenter from Oracle said, anyone can do those complex call centre-CRM installations now.

 

Participant Feedback

Introduction

One of the recurring themes at the event was ‘where to start?’ with Telco 2.0 business models. Although many participants could perceive where operators would like to be eventually, there was much less belief or consistency in working out how to get there.

Most recognise the need for caution. C-level executives will, quite rightly, take time to buy into the idea, as will investors: proof points will be needed. And Telco 2.0 projects will need to be aligned with various other transformation initiatives, such as more moves to new OSS/BSS stacks or outsourcing of important functions. In addition, any major new programme of investment (for example in new hardware platforms, or extensive developer-centric marketing and support) is likely to be burdened by delays and much closer business case scrutiny in the current economic climate.

So, Telco 2.0 believes that quick and influential wins might be achieved via pilot projects – illustrating the power and vision of two-sided models without needing complete reinvention of overall company strategy first. As the economy picks up and executives are more inclined to take risks again, these proof-points can then be used to accelerate much larger programmes of change. Clearly, the appetite for risk will vary by operator – as will the most accessible ‘low hanging fruit’.

Audience input around piloting spanned a wide range of themes – from the technical to the organisational, and from attitudinal shifts to more specific early niches. Overall, all these elements will be important to align.

 Feedback: Technology

Some of the participants took a technical view on piloting options, looking at easing platform deployment

·         [Do pilot projects] In the cloud. [#3]

·         Had similar thoughts about combining different SDPs into one coherent system. [#9]

·         Focus on an incubator approach utilizing NGOSS and state of the art SW technology (clouds, virtualization, SOA, Web Services, open source wherever possible) so that the cost basis allows/fosters lower risk and new biz models. [#12]

o    Re 12. Encourage unconventional thought and development — break the old Telco mindset. Must use open source yes, but more than just for cost — because OS pushes the technology innovation envelope forward. [#42]

·         Expose current Telco APIs to developers through a developer portal. [#13]

·         Need OSS/BSS standards in this area to create reusable industry fabric. [#17]

·         Go to the more agile parts of your business, e.g. ISP, leverage their SDP and / if existing / their billing engine. [#20]

·         Involve third-party developer with an own market to add new features coming from network capability mash up. [#32]

·         In the cloud by not impacting own IT. [#34]

·         Define clear and normalized system boundaries. [#41]

·         Connect web scale platforms with APIs to Telco backend services and data to enable new services. Easy useful example around user location: connect Telco current user location information to Yahoo!’s Fire Eagle platform to enable mobile and PC location-based services now. [#95]

·         OSS/BSS platforms are largely the bottlenecks and can’t be used for Telco 2.0 — they are largely 2-3 generations old and take to long to rollout. [#96]

·         Biggest issue at Telco’s is cost of rolling out a service, lots of people have to be involved, and cost of failure is very high. This stymies innovation. Doing this on a low-cost platform reduces cost of trialling a service before then fully rolling out the service. [#92]

·         Build it on android. [#84]

·         Need some open APIs to attract the VAS. [#47]

·         Build a hosting environment where 3rd parties can deploy new service candidates, and provide the community tools environment for collecting feed

·         Open the API to a large amount of developer (crowd sourcing). [#50]

·         Expose Telco network capabilities in a secure and simple way to 3rd party application providers; start with essential values first, e.g. identity management and authentication. [#90]

·         See the benefit of one API and BONDI to deliver new models. [#69]

·         Normalize the data set generated by collecting wide variety of data source. [#71]

·         Use development environments which allow reuse (SOA). [#77]

·         Telcos have 100s of product catalogues holding their existing products; make sure that the product on the other side of the business models is built the same way. [#79]

 Feedback: Organisation and structure

Many comments focused on structural suggestions and solutions – which parts of the Telco organisation are best-placed to work on new business models. Telco 2.0 believes that this may vary by operator – but that there is also a risk that new turf battles might emerge as separate teams claim ownership independently. A significant proportion of respondents seem to believe that external companies or cross-industry collaborations have a greater chance of success than in-house teams.

·         Don’t do it inside the Telco, create a small JV or group. [#2]

·         Create an open source community. [#4]

·         One of two approaches: New-org or New-co. But certainly not business as usual. [#5]

·         Use MVNO’s. [#6]

·         Via MVNO. [#49]

·         Use a bureau model to aggregate and provide new services. [#7]

·         Get clear on the financial model(s). [#10]

·         Clubbing together with other Telcos to make a global community to compete with global OTT. [#15]

·         Create a new breed of service providers rather than the traditional Telco ones. [#23]

·         Get going outside of the organisation in a separate project with incentives. [#27]

·         Create an independent organisation. [#30]

·         Work with a number of partners to develop a cross industry proposition that adds customer value and that is sustainable given future innovation and running costs, and then open it to industry. [#25]

·         Form a small strategic group and leave them alone for 6-12 month. [#37]

·         Set up an internal VC company. [#72]

·         Use your labs/R&D to start in stealth mode – its just innovation. [#73]

·         Do skunk projects. [#75]

·         Get an industry body e.g. GSMA to launch a cross-operator commercial trial of simple web-based developer APIs and design detailed metrics to measure its success. [#58]

·         Form partnership with 2-3 operators and build a solution together … shared ideas, expenses and solution. [#59]

·         Has to be done ‘outside’ the Telco or it won’t move fast enough and will be constrained by legacy. [#83]

·         Enlist support from executive champion to empower a separate internal group. Ensure open access to resources/databases and allow team to innovate without partisan or corporate boundaries. Launch service to target demographic. [#85]

·         Incubators. [#63]

·         Don’t go to a big SI or consulting company, this is the old model. Go small, innovative, quick companies spend < 10k and three months to see what is possible. Be willing to move fast means breaking down the barriers which will require top down support. Kind of like BT buying Ribbit without having to acquire if you don’t have the money. [#64]

·         Create an ecosystem environment. [#67]

·         Start it inside Telcos, with Telco resources or community education projects. It’s the only way to put Telcos sharing information. Show value gained of this and it’s easier to convince them on what they have to gain. [#80]

·         Implement business models (not just advertising) based on behavioural analysis of actual use of the broadband pipe – otherwise we will always be “dumb fat pipe” Co. [#86]

·         There are several service bureaus out there but their business models foster bad technology so that you have to pay for changes. [#91]

 Feedback: People and culture

It is also already clear that human factors and behaviours will play as important a role in the early Telco 2.0 days. Changing corporate attitudes and philosophies clearly cannot happen overnight, but it appears that psychology may be as important as technology in getting the ball rolling.

·         Integrate creativity and playfulness. [#8]

·         Stop talking about it and just get on and try it. Find a simple idea and/or a small innovative to company to work with and give it a go. When you consider the business case think about how much you lose on mobile data today :). [#11]

·         Just do and get out fast if no go. [#28]

·         step1: need a strong commitment at Board level. [#24]

o    step2: work on ecosystem for trials. [#48]

§  step3: define an ‘easy to use’ app offering. [#61]

·         Being finally bold and give it a try. [#29]

·         Sidestep the AIB (a**holes in the boardroom) problem. [#38]

·         I think the perceived risk of cannibalisation is stymieing change. Education still needed. [#40]

·         Don’t be afraid to try something and get negative feedback. Be prepared to react quickly to customer feedback. [#56]

·         Ask your retail group what they fear most THEN DO IT! [#89]

·         Forget about structural limits focus on making customers passionate about you. [#54]

·         Have to develop/create environments which allow the operator to take risks (allow failure). [#88]

·         Strange how during this conference we have hardly focused on the customer, maybe time to engage with these individuals. [#74]

·         Surprise the core business. [#82]

·         How about polling the customers? [#65]

·         Need to convert business model from platform segmented to a total audience value model. [#39]

·         Invite upstream customers into a working forum with selected vendors and carriers in an open trial which publishes its findings and encourages participation from the developer community – pose a problem for the upstream customers to the developers and incentivise them to solve it in the framework. [#57]

 Feedback: Go to Market

The concept of piloting Telco 2.0 projects quickly, but on a small scale seems to have resonated well. But there was much less consistency in the precise approach to follow. Some will be cautious and find a suitable small but homogeneous marketplace, while others are looking at other ways to segment their targets or just find a set of “tame clients” to pursue first.

·         Small representative market. [#14]

·         Step by step with clear and beneficial use cases. [#18]

·         Do some very profitable cases with large companies re-engineering some processes. [#19]

·         Do a limited pilot with one pilot partner. E.g. suitable for sender pays for data models. [#21]

·         Experiment in a new geographic market, maybe in conjunction with a local tier 2/3 player. [#22]

·         Partner with IBM or Accenture & target a specific vertical enterprise market. [#31]

·         A service at a time using a bureau model. [#43]

·         Do the proof of concept first. [#44]

·         Work with selected companies and trial, then develop a case study and show the value to other industry sectors. [#45]

·         Focus on a vertical; build on use cases and then move on to the next. [#55]

·         Conduct a small-scale pilot with a key strategic customer to understand the benefits and consequences of the new business model. Make sure that the business model experiment is aligned with a new customer business model. I’m specifically talking about Enterprise customers here which will use telecom services as a fundamental enabler for deliver their own industry sector-specific services. [#51]

·         Find ‘tame’ customers, e.g. universities with telecoms expertise. [#93]

·         Build a service with some friendly ‘captive’ internal customers e.g. your own employees or small subsidiaries or departments. [#78]

·         Identify a customer / segment and work with them / it to generate the solution. Be prepared that some of the solution can be provided outside of the Telco. [#76]

·         Do a small user experience pilot and ask your kid to trial it. [#81]

·         Same approach as piloting new radio technologies – find somewhere small & isolated to try first, e.g. like an island territory or similar, with ring fenced local operations. [#60]

·         Focus on how Telco can add value in new verticals like healthcare or auto. [#87]

·         Create an option play in an adjacent market and test the model in that domain. Do it with non Telco people. [#66]

·         [Get] feedback from early users. [#62]

·         We already do a pilot with tom-tom. They get our anonymized mobile location data and are able to derive traffic density and jam information from that. Tom-tom paid for the platform and a recurring fee. [#70]

 Feedback: We’re all doomed, doomed!

Although there were also some defeatists (or at least, humorists) who talked about Internet players and suggested that if you can’t beat ’em, then why not join ’em?

·         Just wait, and let Apple do it for you :). [#26]

·         Acquire Amazon. [#36]

·         Turn outside like BT buying Ribbit. [#46]

o    Yeah but BT will destroy Ribbit. [#52]

·         Talk to Google. [#68]

Lessons learnt & next steps

The main take-out from this session is that there is no single clear path. The feedback yielded dozens of suggestions, many of which make sense on a standalone basis. The appropriate options for any given operator will clearly depend on its specific circumstances – fixed vs. mobile, tier 1 vs. tier 2, national vs. international, age & capability of OSS, maturity of existing API and Telco 2.0 programmes, and numerous other criteria.

However, one theme came out strongly throughout the event: do something quickly. There is insufficient time to pursue the usual protracted Telco timescales for research and deliberation. This means that areas with long lead times – such as government projects – are typically unsuitable. Some target industries are also experiencing lengthening sales/decision cycles in the recession – these are also not optimal for pilots.

Instead, focusing on sectors or groups capable of making quick turnarounds – with easy measurement of success/failure – are paramount. Web-based companies are often the most flexible, as are some academic institutions. There may also be a geographic dimension to this – countries with low regulatory burdens, or where it is unusual to have projects stuck for months with lawyers, are attractive for piloting purposes.

Working alone may be fastest, but collaborating with other operators is likely to be more effective in demonstrating validity to the Telco 2.0 concept.  Balancing this natural tension will be important in the near-term.  Gathering a small collection of operators together to work on tightly defined projects seems sensible as these can morph, over time, into larger scale activities with a larger ecosystem.

The Telco 2.0 Initiative is happy to work with any individual operators looking to identify early options. But some general short-term guidelines include:

  • Get a credible senior (board member) executive to sponsor activities in this area – preferably the CEO. Don’t try and build something without this support as a new business model will never succeed with the will to change at the top;
  • Realistically assess the likelihood that the corporate culture and systems will sustain ‘maverick’ Telco 2.0 operations. If it can, it is probably worth setting up an in-house group to work closely with relevant IT and operational units to select pilot areas and capabilities. But be honest with yourselves – if this will get mired in bureaucracy and politics, first seek an alternative approach outside the main business;
  • Where possible, avoid trials which need software or devices to be ‘hard-coded’ as making changes to beta versions is difficult and distribution issues will limit adoption. Instead, using the web or browsers as an interface enables any changes to be made on the server-side, on an ongoing basis;
  • Web-based trials have another advantage – multiple versions of the same underlying service can be developed in parallel, enabling project managers to see immediately what works and what doesn’t, by comparing feedback from separate groups of customers;
  • Perform an audit of current Telco 2.0-type initiatives across the whole company. Highlight any apparent duplication of effort, and predict any likely areas of tension or internal competition as early as possible. This is not trivial – in-fighting can kill projects quickly;
  • Assess and contribute to relevant industry-wide collaboration projects- GSMA OneAPI, OMTP BONDI, etc. Send representatives to developer meetings of competitors or peers elsewhere in the world, or in adjacent technology markets;
  • Look for any internal groups that could themselves act as early clients for new service propositions. It is easy to be blind to the obvious: if communications-enabled business processes are valuable, why not communications-enable your own processes first?

In this case, it is difficult for Telco 2.0 to suggest long term actions – these are obviously dependent on the results of the earlier pilot projects!

Full Article: Technical Architecture 2.0 – On-Demand Networks & OSS-BSS, User Profiles, Enabling Services

NB A full PDF copy of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Technical Architecture 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0′ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Retail Services 2.0, Content Distribution 2.0, Enterprise Services 2.0, Piloting 2.0, Open APIs 2.0, and Devices 2.0. In addition there will be an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

 

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points.

 

Background to this report

The implementation of new ‘Two-Sided’ Telecoms Business Models has major consequences on telco network architecture. Perhaps most importantly, data from separate internal silos needs to be aggregated and synthesised to provide valuable information on a real-time basis. Key process interfaces that enable new services must be made available to external parties securely and on-demand. Network and IT functions must start collaborating and function as a single entity. Operators need to migrate to a workable architecture quickly and efficiently; vendors have to support this direction with relevant new product offerings and strategies.

Brainstorm Topics

  • What are the implications of adopting 2-sided business models on telco technical architecture?
  • What does the roadmap to a Telco 2.0 architecture look like?
  • As the network becomes more intelligent to support smart phones and App Stores, what are the most important investments for telcos?
  • What are the priority areas for transformation to enable new services?
  • Why are user profiles so important for telcos?

 

Stimulus Presenters and Panellists

  • Werner Vogels, CTO, Amazon.com
  • Richard Mishra, Director, Strategy and Standards, Amdocs
  • Alireza Mahmoodshahi, CTO, COLT
  • Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks
  • Michel Burger, Head, Service Architecture, Vodafone Group

 

Facilitator

  • Thomas Rambold, CEO, DESS, Associate, Telco 2.0

 

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

 

Stimulus Presentation Summaries

Technical Architecture 2.0

Thomas Rambold, Associate, Telco 2.0, presented on the end of clearly defined services – we now face thousands of segments, and no distinction between ”just voice” and ”just data”. Broadband means that I can simultaneously be an Amazon user, a father, and many other things. Distinctions between enterprise and consumer services, private and public, have changed.

This implies much greater complexity in the customer relationships; the Over-The-Top (OTT) players have struggled to get their arms around the total relationships. Carriers have identified Fort Knox on the diagram (customer and network data management) as somewhere they can excel.

The walled garden is no longer sustainable. OTT offerings are already growing fast and, when they start using Telco APIs in earnest, this will accelerate. We need to link these services with customers – the carriers are the only actor capable of acting as a broker between the API users on the one hand, and the full suite of customer data (residing in ‘Fort Knox’) on the other. It is vital to be on-demand, if not necessarily truly real time. You can’t make people fill in forms to start a service – authentication, sign-on and billing and payment need to be automated.

Paul Magelli, Head, Subscriber Data Management, NSN: ”Would you be happy letting a Telco do data mining on you that you wouldn’t tolerate from the Government?”

Currently we are struggling to bridge the gap between the network and the OSS/BSS systems.  We simply can’t get the on-demand response we need.  So now we’re merging telco and IT organisations together, analysing the telco and IT environments, trying to get them to work together, in concert, and react faster.

The service delivery environment; a year ago, this would have been a big SDP from a traditional telco vendor. But now the services have moved out to the network – into the cloud, into mash-up environments, on to native applications on devices. It’s increasingly challenging to make these services useful and timely and to guarantee security and privacy across all these domains.

 

Service Value Management, Amdocs’ vision for next-generation services

Richard Mishra, Director, Strategy and Standards, Amdocs, said we are living in interesting times: We face sophisticated customers, exotic delivery platforms, and a recession!  Perhaps we need to revisit core values, get back in the box and think more deeply. Revisit the core strengths and disciplines of operating a carrier-grade telecoms network (but not retain the bad attributes).

There is constant talk of service, even by the TM Forum back-office people, who are never seen from outside the Telco. But the next step after resource deployment is, inescapably, fulfilment. And with all this talk of service, what about the shareholders?  Finally, having created the service, spent the capex, and deployed, you need assurance – monitoring service performance against the performance you offered the customers.

We’re working with ever-increasing interdependence between infrastructure, service, consumer and enterprise applications, and devices. This needs diagnostics and monitoring for all these levels, and careful management of the consumer experience.

Our Full Service Provider Integration Framework provides tools for continuous improvement as defined in the left half of eTOM; covered by contracts designed to match. In our deployment in Atlanta, we used this and special tools we developed for the carrier Ethernet network. We didn’t try to recreate the special capabilities there; but we did subject it to the traditional disciplines of managing a carrier network.

As a rule, Telcos no longer customise stuff; we can’t make our own SDH management tools any more, notably for reasons of intellectual property. So it’s now a question of assembling agile value chains from many other vendors, components and sources.

 

Building Trusted Relationships

Paul Magelli, Head, Subscriber Data Management, Nokia Siemens Networks said that customer data plays a key role in Telco 2.0…but does it exist? Is there enough available in our networks?

Nokia Siemens is working on the following assumptions:

1.     A multitude of business models;

2.     Broadband connectivity everywhere;

3.     5 billion subscribers;

4.     Applications all migrated onto the Internet.

This implies that successful applications and services will be information- and subscriber-centric.

Richard Mishra, Head, OSS Strategy and Standards, Amdocs: ”Data will become a treasured part of the business model.”

We really need rich profile information – profiles are what we say about ourselves. It’s clear that there is enough information, but can we get at it? 76% of respondents in our survey think it’s the most important issue; 86% think it’s important for network development.

Consider a use case in banking. To improve contact with customers, we need to know things like: is the customer available? Interested? Is it a good time to reach me? Is this the best way to reach me? Is this the right language? For this, we need the ability to do real-time subscriber profiling as well as historical data analysis.

But it’s more complicated than that. Current data isn’t enough – time series is really important. It is surprising that operators recognise this but haven’t done very much to solve it. Only 14% have real-time data analysis. And identity is more complicated than that – people have multiple devices, multiple SIMs, and multiple identities. Privacy is another big issue. Permission is frequently abused; there is a huge generation gap in attitudes around what constitutes privacy, and the legislation is very different between different jurisdictions (and usually lags the market).

If we could provide a single point of access for managing your identity…huge opportunities await. But it’s crucial to resolve the privacy issue by giving customers control of their own data.

 

Building the business-grade cloud

Alireza Mahmoodshahi, CTO, Colt asked how much do our customers know about cloud computing? Not much, he said, we’ve done well in clouding their minds. He gave a short brief on COLT; its origins in the City of London, its European fibre network, its large enterprise customers.

There is a framework for ICT; the Telco at the bottom, providing dark fibre, bulk data and voice. Then, above that, data centres and IT infrastructure like hosting, co-location, network operation. Then a vast range of applications specific to tasks run on top of that.

Not many operators are enamoured with their position at the bottom of the stack…

…on the other hand, it’s hard to find anyone who can replace the things that Telcos can do. Most clouds don’t offer any kind of SLA, so critical transactional services can’t use them. Traditional clouds are on the left of the diagram, similar to IT infrastructure. Operators don’t want to be penned into the low-value bottom right: they need to push up and left to escape. Meanwhile, clouds tend to have no SLA for the sector from the cloud to the end-user, and not necessarily between the enterprise and the cloud: there are too many participants to provide an SLA covering the whole thing. So the opportunity for the Telco cloud is to provide end-to-end SLAs.

The crucial development to enable business-grade clouds is to virtualise all elements of the system. Then, control priority for applications running on them. This is achieved by queuing them through a COLT-patented policy scheduler; this despatches tasks to a pool of virtualised servers, themselves providing a pool of threads.

Then we set up the API/SDK third-party access to the platform to empower the applications developers. If you want to do this you need to control QoS and also application-layer dispatching across the entire system; carriers are probably the only actors who can offer this.

 

Participant Feedback

Introduction

The fragmented and sometimes opposing views of the audience in the feedback (and voting) are not new or surprising. It is a key indication for service providers and operators that changes are overdue and must be taken seriously. It also demonstrates the complexity of current silo’d approaches, and the inability of a single company to change this. Despite this complexity, operators will have to focus investment on strategically important projects, particularly during these difficult financial times. Such an approach will give us the chance to reduce complexity and reduce operating costs. Most importantly it will enable operators to produce agile technical architectures with the required flexibility to meet customer demands.

 

Feedback: grounds for optimism

The technical architecture session produced some significant levels of optimism from the audience….

·         Promise of new future. [#5]

·         Some real applications of Telco 2.0 model. [#6]

·         Good ideas for large enterprise and government segments. [#12]

·         Triggers my thinking and confirms my assumption. [#15]

 

Feedback: …and cynicism

…albeit tempered with a degree of cynicism about the validity of the examples cited

·         We don’t know when we will get there. [#9]

·         Still industry jargon driven. [#17]

·         All seemed to be a bit ‘defensive’ of legacy models and were more oriented to Telco 1.0. [#18]

o    Re 18 good point. 90% of large carrier environments could not move to Telco 2.0 due to restrictive contracting structures with their existing OSS vendors. To add to the pain, they usually don’t have their source code so they don’t really control their destiny (especially if outsourced). [#43]

·         Mostly still talk, no examples on the ground yet. [#20]

·         Still very much 1.0 and technology driven, to view user and real new business model. [#44]

·         Unfortunately human beings are not compliant to marketers Telco use cases ;-). [#46]

o    46; Telco use cases are uninformed by real data. [#49]

·         Would it be better to define what to do and where to go, before arguing potential obstacles and potential regulatory matter before the idea has started? [#62]

 

Feedback: Customer data issues

In particular, the subscriber data management model seems aspirational, if trust issues can be resolved. However, there were a lot of questions wondering whether Telcos’ use of customer data would be either as accomplished – or consumer-friendly – as Internet-based players like Amazon’s. There also appears to be a debate brewing over whether or not Telcos’ customer data is “better” than that of web players’.

·         Single customer data ‘vault’ from Nokia/Siemens is a great idea; doubtful any carrier brand has the consumer trust to pull this off-more likely for VeriSign, Symantec or someone else. [#25]

o    25 – I agree. There also needs to be reciprocity. I want to be able to authenticate on an operator network with my Facebook ID or similar – or with another operator’s identity. [#33]

·         Very illustrative presentation about profile, profiling and identity. [#39]

·         Nokia Siemens idea seems good, but how can they guarantee that the customer data go to a trustworthy person? The bank manager of today could be the disgruntled laid-off employee of tomorrow selling the data illegally to somebody else. For my part, I rather trust my voice mail box for everybody to leave a message. [#48]

o    48 no business has succeeded by arguing that innovation were dangerous to its established business paradigm. [#51]

·         Give customers even little incentives and they willingly hand over their data. [#63]

·         In France this week a guy spent a night in jail for receiving a SMS whose content was considered ‘security threat’ ….trust????? [#60]

·         Any examples of where operators have offered services using the subscriber profile mgt capabilities discussed by NSN? [#10]

·         In the NSN subscriber profile example, to which extend are the subscriber data exposed to 3rd parties, and by which standardised approach? [#35]

·         For the NSN concept, do we first need a regulatory framework for ‘identity portability’ so that we can churn ID providers? [#37]

·         Why as a user can I not hold my data and share it with who I want, if it is so valuable why don’t I charge for it as well? [#47]

o    Re: 47 THAT IS THE IDEA! The idea of the 2 sided biz model (IMHO) is that your data is valuable. You should sell it by allowing the operator to monetize it with 3rd parties then ‘pay’ you through reduced service charges and greater service coverage/offerings. [#55]

o    47, in a sense you do. You get better products 0n Amazon by giving product feedback; on Blyk you get free minutes and data in exchange for insight and data. Payment from users is not always monetary (it is sometimes data and information) and, likewise, payment to users for their ‘data’ will not be monetary but through increased value. [#61]

·         Further to Werner’s question of who owns the data — who do operators give access to sensitive data? Would customers like it if they know that the carrier may allow their BSS vendors to manage call information or data event records? Do carriers have access to the source code to verify integrity of mission critical apps? [#52]

·         Private information is valuable. Why do not think share the value of private date with the consumer? [#56]

·         Today – what percentage of Amazon’s data it collects is used to improve user experienced and increased engagement + purchasing? [#59]

·         Access to data for Telco 2.0 is regional/legal/societal dependent. Operators need a good PR effort to allow opt in for customers to fuel the two sided revenue model. [#66]

·         Maybe there could be a bureau operator that can abstract the customer and all related data on behalf of the operators … where people that are willing to be Telco2.0 involved can opt in. [#68]

·         Bravo Werner. Telcos need to think about the customer first. What Telcos facilitate the option for customers to send data to 3rd party for monetization opportunities? [#69]

·         Isn’t Telco 3.0 a free connection to the network in exchange for shared consumer behaviour data? [#71]

o    71 could see Google trying this in 5 years time if the cost of Telco network is driven down sufficiently. [#75]

·         People are scared by poor data sunk into Telcos that they have no control over. When is data opening up to cleansing going to happen? [#73]

o    Re: 73 the data is already there. [#76]

 

Feedback: the cloud

There was plenty of interest in the COLT presentation on the Cloud…. but also plenty of cynicism again

·         Colt just showed what Telco 2.0 is all about. That model enables innovation thru cost reduction and state of the art architectures. Why don’t operators run their back office in a similar approach? [#13]

·         Is Colt’s cloud real yet and have COLT sold anything yet? [#16]

·         Bravo Colt. If it exists it is a model as it should be. They sign up for the SLA and they lay forth a bed of enablement. [#19]

·         If Colt has that architecture in operation, they should be running the back office for other Telco operators. [#34]

·         Relative to Colt’s view – what about Salesforce.com who seems to have pulled this off on their own. [#29]

·         Does COLT use its own cloud services? [#38]

·         Where the incentive is for existing OSS vendors who have long terms managed services contracts to innovate and move to Telco 2.0 architectures (e.g. SaaS) like Colt? [#28]

 

Feedback: COLT vs Amazon

… although whether COLT’s vision (or Amdocs’) is as advanced as that presented by Amazon was doubted

·         Amazon ‘eats’ their own cooking (their cloud) and COLT? [#14]

·         What is colt’s business model (price structure) and how does this differ from Amazon? [#8]

·         How does Werner really feel about legacy telecom operator back office Telco environments? [#30]

·         How does Amdocs view Colt’s model? [#23]

·         How would Amdocs view Colt and Amazon models? Seems much difference with their approach. [#7] 

 

Feedback: Carrier-grade – what is it worth?

But do end users really think “carrier grade” is important as the operators? Will they pay a premium for it?

·         I’ll believe in ‘carrier grade’ when enterprises can get SLAs for mobile coverage. [#45]

·         Is carrier grade not shifting now that many users have several alternative means to perform a communication? [#57]

·         Seems the industry still have major problems in freeing themselves from network drives. [#22]

·         Carrier interoperability and collaboration could solve many network issues. [#24]

·         From what I can gather there has been talk about all this for some time. Based on this the Telcos have failed to transform while other companies have. Surely Telcos will change too late to take any true advantage of the possible opportunities that exist today and other companies will take advantage. Why don’t Telcos focus on their core competence – the network? [#36]

o    36, for the simple reason that the value of the network itself is in continuous decline. Got to look elsewhere – make money because they own network not through the network itself. [#42]

·         These arguments are the same ‘net head’ vs. ‘bell head’ arguments that occurred in the late 90’s. How do we resolve the issues? Telcos clearly are behind and are insisting on making everything ‘carrier grade’ at extraordinary costs? Doesn’t seem very 2.0, does it? [#41]

 

Feedback: crucial enablers

There were also various other comments about the enablers of the two-sided platform, and the consequences of personal device proliferation:

·         Cascading SLA’s is old stuff, nothing new. [#50]

·         XaaS is very valid a concept, and so is cloud computing/storage/network, but these are two different things – XaaS may or may not be using cloud principles and technologies. [#65

·         Simplification of capabilities available for third parties. [#27]

·         What is the highest priority issue for Telco 2.0 enabling architectures that does not exist today? [#21]

·         OPEN standards vs. licensed software? [#32]

·         5 B user…. 5o B devices….customer data from all these!! [#26]

·         How many people have more than one mobile device? 5 are extreme. [#31]

o    re31 – in Europe, probably about 1.4 mobile devices per person, and >2 in Italy. Verizon in the US has suggested that ultimately 4+ is not implausible. [#40]

 

Participants’ “Next Steps” Vote

Participants were asked “How well current industry activity around technical architectures supports the development of Telco 2.0 business models?”

  • Very well – the industry is shaping up well for delivery and new business models.
  • Good start but more needs to be done – major building blocks are missing.
  • Lost cause – the industry will never deploy the capabilities for new business models

Lessons learnt & next steps

Since the development of broadband access, the Internet world has recognised that customers can have many, dramatically different roles and attributes, needing specific functionality, preferences, and user profiles. Operators are in a unique position in that they have a fuller picture of customers than any single website or retailer or service provider. Several have already recognised this, and a number of vendors are offering scalable platforms which claim to be in line with the current EU legislation on data protection.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”Data is to the information economy as money is to the economy. But there is a missing infrastructure – because there’s no user interface for this data and what is the equivalent of a bank for this data – who looks after it?”

But as well as user profile data, the 2-sided business model requires on-demand response from the network infrastructure. It will not matter whether it is the network or OSS/BSS/IT element that is breaking down – customers won’t care, they will just find the situation unacceptable. Both the network and IT elements must work together to deliver this. Operators are moving in that direction organisationally and structurally.

Telco 2.0 expects that this will result in new implementations of control & monitoring systems such as Resource & Service Control Systems (RSC). As services are the key business drivers, the opening up of the walled gardens is changing the service delivery platforms quite rapidly, as most new applications are centred around apps stores, mash-up environments, XaaS environments, and smartphone Web browsers, etc. which do not demand a traditional SDP or SDF. In addition, enabling services are becoming an essential element in operators’ core products. These enabling services will, in the future, allow operators to monetize their network assets.

These enabling services need a framework, which is highly flexible, agile and responsive, and integrated with the features defined by NGMN. While not all these points are implemented yet, there is increasing understanding at the operators, upstream service providers, and regulators that this new phase, opened up through the 2-sided business model, represents a historic opportunity for all members of this ecosystem.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”What if we had new, industry standard terms of service under which users owned their data?”

Before the technical details can be finalised, of course, business models need to be scoped. However, the major technical areas discussed above are focal points for technology development. In the short term, Telcos should:

  • Build up a logical semantic database as preparation for database integration;
  • Include migration from 2G and 3G and backwards compatibility in LTE tenders;
  • Prepare a user profile database;
  • Reduce the number of OSS/BSS systems;
  • Develop real-time responsiveness in OSS/BSS systems;
  • Separate the control and data planes, separate services from transport;
  • Implement and deploy an RSC system as a multivendor abstraction layer. 

In the longer term, operators will need to:

  • Integrate the network and IT elements of the on-demand infrastructure;
  • Set up a full user profile with privacy protection and more granular information;
  • Integrate provisioning, activation, network and bandwidth management, and policy enforcement;
  • Recognise that Web-based service environments will overtake the SDP;
  • Develop a collaborative approach to multi-vendor app stores.

Full Article: Retail Services 2.0: Digital Natives – how to serve a new breed of customer; Executive Briefing Special

NB A PDF version of this briefing can be downloaded here.

This special Executive Briefing report summarises the brainstorming output from the Retail Services 2.0 section of the 6th Telco 2.0 Executive Brainstorm, held on 6-7 May in Nice, France, with over 200 senior participants from across the Telecoms, Media and Technology sectors. See: www.telco2.net/event/may2009.

It forms part of our effort to stimulate a structured, ongoing debate within the context of our ‘Telco 2.0’ business model framework (see www.telco2research.com).

Each section of the Executive Brainstorm involved short stimulus presentations from leading figures in the industry, group brainstorming using our ‘Mindshare’ interactive technology and method, a panel discussion, and a vote on the best industry strategy for moving forward.

There are 5 other reports in this post-event series, covering the other sections of the event: Devices 2.0, Content Distribution 2.0, Enterprise Services 2.0, Piloting 2.0, Technical Architecture 2.0, and APIs 2.0. In addition there is an overall ‘Executive Summary’ report highlighting the overall messages from the event.

Each report contains:

  • Our independent summary of some of the key points from the stimulus presentations
  • ·An analysis of the brainstorming output, including a large selection of verbatim comments
  • The ‘next steps’ vote by the participants
  • Our conclusions of the key lessons learnt and our suggestions for industry next steps.

The brainstorm method generated many questions in real-time. Some were covered at the event itself and others we have responded to in each report. In addition we have asked the presenters and other experts to respond to some more specific points. Over the next few weeks we will produce additional ‘Analyst Notes’ with some of these more detailed responses.

NOTE: The presentations referred to in this and other reports, some videos of the presentations themselves, and whole series of post-event reports are available at the event download site.

Access is for event participants only or for subscribers to our Executive Briefing service. If you would like more details on the latter please contact: andrew.collinson@stlpartners.com.

Background to this report

New research shows that customer behaviours and expectations from ICT products and services are changing globally. Customers are not simply using the internet and mobile passively for information and entertainment; there is increasingly a culture of participation and involvement. Customers want to contribute: to wikis, to blogs, to mash-ups, to product and service reviews, to product development. These changes are not confined to the “Digital Kids” but are happening at a pace that challenges traditional telco innovation processes and timelines. This session focuses on what operators can do to better address these new needs and behaviours.

Brainstorm Topics

  • Preview of new Telco 2.0? research report: “Serving the Digital Generation: Innovation for a new breed of customers”
  • How are customer behaviours and expectations changing?
  • Which service providers are best addressing these changes?
  • What are the challenges and opportunities for operators seeking to develop services and support 3rd party service providers?
  • What changes are required to Telco product/service design and innovation processes?

Stimulus Presenters 

  • Scott Adler, VP, Amdocs Interactive
  • Mo Firouzabadian, Global Business Line Director, Buongiorno
  • Norman Lewis, Associate, Telco 2.0? Initiative
  • Richard D. Titus, Controller Future Media, BBC
  • Marc Davis, Chief Scientist, Yahoo! Mobile

Panelists

  • Richard D. Titus, Controller Future Media, BBC
  • Marc Davis, Chief Scientist, Yahoo! Mobile

Facilitator

  • Simon Torrance, CEO, Telco 2.0 Initiative

Analysts

  • Chris Barraclough, Managing Director, Telco 2.0 Initiative
  • Dean Bubley, Senior Associate, Telco 2.0 Initiative
  • Alex Harrowell, Analyst, Telco 2.0 Initiative

Stimulus presentation summaries

Delivering a Personalised Experience to the ‘Tera-Sumer’

Scott Adler, VP, Amdocs Interactive said that there would soon be one trillion permanently connected customers. Device proliferation would continue, with an ever increasing proportion permanently connected. You could call it the ‘tera-sumer’ – not thousands, but a trillion segments. Each individual is a valid segment.

What’s the impact? Call centres would be at risk; the off-portal trend accelerates even further. Cash will be squeezed out of more and more sectors, but customers will pay for personalised and integrated experiences. As Rory Sutherland, vice-chairman of Ogilvy, pointed out, they will pay for applications but not for Web pages.

Brian%20Shepherd_Amdocs%20Interactive_May%205.png

We need to sell, provision and bill bundles of apps, goods, and services together; we need to extend the ”portal experience” outside operator or vendor portals into other services and across many different devices. It’s the ”universal storefront”, by analogy with Amazon. We should consider services as ”network goods”; people will use reviews etc, so we ought to provide them and get ready for them rather than try to stop it. A smart network should know what I do on the Internet and act accordingly, he said. Formats used to be unique; they are now spread across many devices. This should include the cloud.

Scott Adler, VP, Amdocs Interactive: ”Cultures of innovation are difficult in general. You need to create a separate organisation, with enough budget and authority to get on with it – a skunkworks.”

We need to start innovating now and see what works and what doesn’t. There is no one answer, and each operator is trying to find their own way. But the important thing is to start today. It is vital to recognise there are not thousands of segments, but a trillion segments of one – much better to provide things the user wants, than to provide everything and let them click through. The historical silos for selling all goods must be broken up.


The Customer Participation Framework

Norman Lewis, Associate, Telco 2.0 Initiative presented findings from the latest Telco 2.0 Strategy Report. If we can understand user behaviour, we can deliver on the two-sided business model that the Telco 2.0 Initiative has been popularising. At Orange, when I talked about changing user behaviour they would always say I was talking about the long term; it’s actually a short term thing. This is not about unexpected outcomes, a battle that might be lost or won. It’s going to happen; the question is whether we cope or not.

I-Mode gained 20 million subscribers in 2 years. This was instant user behaviour. So we’re trying to look at the digital generation, to understand what drives this behaviour – now, and in 20 years’ time. I’ve talked about risk culture, the rise of the bedroom and the decline of the street; this technology enables them to create autonomous space. It’s not the technology – it’s the culture.

The fastest-growing group of Facebook users are between 26-40; so we are all part of the digital generation now. This is the mass market. People are forming relationships and interacting with popular culture through this technology, now. We’re going to see this behaviour in the mass market. For example, the users no longer make a distinction between online and offline.

Marc Davies, Chief Scientist, Yahoo! Mobile: ”Facebook is as fundamental now as e-mail or text. You have to look at the history of media; the rate of change is speeding up.

So we created the Customer Participation Framework (CPF) – how you represent yourself to your peer group and how this filters back to you. We’ve created this framework to understand the kind of services needed in the future. There are eight axes – ”it’s all about me”, ”my peers and me”, ”the world and me”, ”my money”, ”my space”, ”the creative me”, ”me and others”, and ”me to the power of us”. All of these match a different mix of telco capabilities. He gave as examples, respectively, Firefox extensions, Facebook groups, QQ, Ebay, Linkedin, YouTube, Twitter, and Amazon.com.

Nlewis%20Telco2_New%20Gen.png

Blyk is an example of the economics of participation; roughly 29% of subscribers respond to the ads. Subsequent ads go to the responders only, and so on. There’s a radical boost in revenue per campaign due to this social filtering. It’s a flywheel – participation creates information, which creates opportunities. Upstreamers get better targeting, more join; more products; more customers, and so on. This recruits more and more innovation into the operator platform…

Nlewis%20Telco2_New%20Gen2.png

How could we redesign a core service? For example, what would ‘SMS 2.0’ be, based on the CPF? It would function as a social authentication mechanism. It would provide group messaging, both individual to group and group to individual; it would use the billing engine to collect credits that can be spent in the real world. We came up with the service in 15 minutes.

The Customer Participation Framework is also a mechanism through which you can check your innovation product cycle. Is this idea still relevant? Check it. This is a ruleset for understanding the future; rather than trying to guess the essentially unpredictable.

Retailing to Pre-Paid Customers

Mo Firouzabadian, Global Business Line Director, Buongiorno reminded us that prepaid customers represent 65% of the world total mobile users. How can we do more with them?

We need to leverage your existing data assets. An example – ‘O2 Extras’, a service from 2003, which educated prepay customers as to things they could do with mobile phones. As a by-product of that, we started the customer life cycle management process – how can we make customers move up the slope of value?

mofitz.png

‘Orange Wednesdays’ is a 2 for 1 cinema ticket giveaway promoted to Orange customers. It’s a two-sided business model – cinemas benefit from more footfall, and opening Wednesday night. For the operator, it provides differentiation and helps retain customers.

‘Win Every Time’ – a scheme that offers prizes at top-up time – is another good example. All user contact with the network provides an opportunity, so we’re doing event-driven marketing based on analysis of past contacts. The analysis is done in real-time – this is an especially valuable feature and causes a drastic boost to effectiveness. More convenient top-up – and more physical feedback of the airtime sale. Checks customer records, causes logging in the company core.

We got the time-to-market down to two months. The operator sets up advertising rules based on 9 parameters. The approach creates engagement; it cuts churn; it went ROI-positive in 1 week. Brands can now pay telcos to reach their users effectively…

 

[Mo’s full presentation is available at the event download site. He will be writing a more detailed case study on this topic in the next few weeks. This will be available at www.telco2research.com].

Feedback: General (verbatim comments)

  • Good to have concrete examples. But… most two-sided market theory suggests that you can only really make a profit from one side. thus we need to understand which side of the market will generate the largest profit and choose to focus effort there [#8]
  • Buongiorno and Telco 2.0 presentations were very good – practical and relevant for two-sided business models. [#11]
  • [I liked] the practical examples implementing the theory [#10]
  • Business transactions work best when there is value shown to both sides, need to show value to upstream and downstream to make this concept viable, not just a single direction monetary transaction. [#28]
  • Operators are often too slow and protective to open up to the 2-sided model. Will probably take brands and enterprise to force the model as customers of operators rather than operators push the model from their side [#92]
  • The 2 sided models looks fine but what is the best case? [#114]
  • There are barriers to achieving the 2 sided business model which are not being discussed [#75]
  • Not sure the 2-sided model works at all levels of the value chain leading to margin pressure for some parties [#83]
  • Would like to hear more about the ‘how to’ [#7]
  • How do you ensure the upstream and downstream get value, currently seems biased to the SP [#25]
  • How are you going to resolve the issue of wholesale and retail competition? two-sided business models have to deal with both sides [#53]
  • o    re 53: many operators have already done this, ask the European operators that have successfully launched MVNO’s [#120]
  • Two sided bus model might be a side track. Most social communications is in social networks regardless of which Telco the user prefer. This is really about layers of communications services where a social communications needs to work across operators. thus either needs a Telco monopolist or implementation of open standards that is used by all operators [#48]
  • Are there better details on which models are best 2-sided and which may remain 1-sided? [#64]
  • How is it possible to avoid resistance from internal retail division that can foreseen a possible cannibalization of retail market related to third part offering based on open APIs? [#87]
  • How to share revenues between Telco and upstream? [#78]
  • There is no two-sided Telco model. As a media company we have a great customer relationship. Once the customer has bought access to unlimited internet use then we have everything [we need from telcos], thank you. Can you explain what network annotation needs to be built in to the infrastructure so that we can get differentiated services from the Telcos? [#90]
  • Is there a risk that Telco 2.0 has overestimated the $250bn revenue from distribution platform? A lot of this is access, backhaul etc but isn’t this already a significant part of Telco revenue? [#106]
  • Do we really think slow incumbent operators will open up with any reasonable speed to the 2-sided model or will it take brands and enterprise to push the model as customers of the operators? [#108]
  • Is there any best case of 2-sided model other than MVNO? [#123]
  • How do you build intimacy and relevance with digital consumers to leverage the 2 sided business model opportunity? [#124]
  • How do we convince the retail department in the Telcos that adopting a platform or NaaS [Network-as-a-Service] business model will not cannibalise their existing business? [#127]
  • Can you name examples of operators opening up data and helping service providers defining new value added products? Who are the leaders in this field? [#22]

[[[Ed. – The Telco 2.0 team will respond to these questions in future Analyst Notes at www.telco2research.com]

Feedback: Better Retailing to Pre-Paid Customers

An example of a “proto-2.0” service was demonstrated bv Buongiorno. Although its immediate focus is on helping extend a 1.0 model (O2’s prepay mobile) via enhanced customer interaction, it actually represents a roadmap towards more 2-sided models. In addition, the interactivity is itself a good example of using the innate capabilities of the network (SMS and top-ups, in this case, linked to the web) as a mechanism for adding value beyond basic person-to-person communications. The presentation stimulated a number of positive comments, as well as queries about the details of the service.

  • On the Buongiorno example, I wonder if the “O2 treats” programme would reveal any interesting insights if the data is compared across territories (e.g. UK vs. Italian vs. Czech Republic) prepaid consumer.
  • Does it run the risk of being perceived as “unfair” – it is less of a random lottery and more targeted according to behaviour [#27]
  • Not normally convinced that ‘real-time’ is as important as many think – but the Buongiorno example of immediate reaction to top up events is really good [#36]
  • Do Buongiourno do any O2 promo or VAS with the O2 arena in London? [#51]
  • In the Buongiorno example, I would be worried to make post-paid to unattractive compared to to prepaid. Has this been considered? [#77]
  • How far does the bribery go before it become unsustainable as consumers demand bigger and bigger prizes [#121]
  • Expanding the Win Every Time concept to advertisers paying for the rewards: more interesting maybe for brands who are not confident with how to approach mobile advertising [#33]
  • Will top up prizes go the same way as free gifts at petrol stations – i.e. we now only want cheaper petrol. [#44]
  • Which carriers, if any, are adopting WET?

[Mo from Buongiorno will respond to these and other questions in a follow up case study article. Watch www.telco2research.com for details]

 

Feedback: Customer Participation Framework and ‘SMS 2.0’

Norman Lewis’ presentation on consumer behaviour and requirements generated a very large amount of feedback, mostly concerning his concepts of the Customer Participation Framework and SMS2.0. While some comments were very positive, there was also debate as to whether SMS2.0 was simply a recast form of Mobile IM. In Telco 2.0’s view, there is actually clear water here – SMS2.0 is about extending the life and usefulness of an existing service and technology, with little impact on the device. Conversely, many variants of mobile IM have attempted to compete with Internet IM – often with a business model that does not fit with consumer expectations of the service (eg cost).

  • A good framework, but needs to be tested, consumers seeking value, not all about me, needs to consider charity as well [#16]
  • I found the participation framework to be very interesting. It certainly stimulated my thinking for a project I am involved in right now. [#35
  • Involving the customer is from my perspective the only way how services can run in future [#
  • Recognised the need to serve customers, did not account for how to develop personalised customer services. [#65
  • Participation Framework is right – ME first. [#70]
  • Focus first on what end-user wants, and offering end-to-end offering, not on technologies… [#74]
  • I liked Telco 2.0’s framework for evaluating products, however I feel there is more work to be done and feeding these parameters into economic business case for a product. [#9]
  • Love to hear Norman talk – always very insightful. [#15]
  • Excellent approach regarding reformulation of the actual services (ex SMS2.0), and leverage their usage / experience. Nice to go and do that exercise for other services. [#31]
  • Liked the participation framework and using it to enhance an existing service e.g. SMS2.0, but can operators charge more for these new features [#37]
  • Hybrid models of services that create missing links from SMS to mobile internet: the SMS 2.0 concept is very powerful, universal yet simple enough for mass adoption [#17]
  • Disagree with point 17, SMS 2.0 is just mobile IM, which already failed [#45]
  • Agree with 17 that linking SMS to web & social networks has a lot of possibilities. Vodafone’s Connect to Friends app on Facebook is an interesting mash up of this [#60]
  • Regarding Norman’s SMS innovation: DiGi in Malaysia launched a mobile and web community called Kakiis in Feb 2008 with group SMS function, and rewards and perks to purchase digital goods. [#42]
  • SMS plus Norman’s model = twitter [#111]
  • Twitter – totally overrated and in many cases value-negative. Unlike Facebook, it’s a flash in the pan – a quick burst of hype and then a slow slide to oblivion [#115]
  • Isn’t Google’s Grand Junction a subset of what could be done by a Telco for Voice enhancement, far beyond SMS2.0? [#67]
  • Isn’t SMS 2.0 idea just mobile instant messaging which already failed to take off? [#21]
  • Adopt enhanced Norman model to upstream parties. What are the driving elements for the upstream? Apply an integrated model for the eco system. [#63]
  • Participation is well spotted, but it requires localisation/identity/depth… otherwise true interactions is lost [#103]
  • Why does Norman think all the social innovation is taking place outside of Telco’s, when they should be the experts in communication not start-ups. [#98]

 

Feedback: Industry cooperation and structural issues

The session highlighted numerous challenges around industry structure and partnership – the general theme from participants seemed to be that operators could struggle to collaborate with the types of organisation that are gatekeepers, such as content owners or Internet players. There is both a timing and attitude issue here – Telcos need to move fast to keep up, while at the same time dropping their perceived “arrogance” in dealing with organisations that they hope to keep as peers or customers.

  • Mobile advertising failed shot due to lack of sizeable and qualified audience. How would customer participation based programs tackle this fundamental issue? Is interconnection of customer knowledge across Telcos a must have to create a sustainable 2.0 model? [#93]
  • I don’t see the operators solving the Telco 2.0 opportunity alone, it needs innovative third parties who think outside the box and can collaborate as intermediaries with many operators [#125]
  • How do Telco’s form win-win partnerships with companies who are successful with digital consumers? [#86]
  • Will Telcos get benefits from relationships with big Internet players? i.e. Google is increasing the relationship with mobile customers without Telco [#89]
  • The new world of services is really made by software, which is not a core Telco capability. How should Telcos have the software developed? Outsource – too expensive? Or in new revenue sharing partnerships with software companies? How would such a business model look like [#82]
  • Which is the better choice for operators between collaboration with ISP and develop SDP themselves? [#109]
  • How do we show the value to ensure all stakeholders work together, too many still act as single entities [#54]
  • How do we bring it all together, users will want mobility and portability, this needs partnerships, scalability and equal value sharing propositions, this has not happened over the past 15 years in the Telco sector, only the ICT sector seems able to work across platforms, how to get the Telco’s to embrace and move forward [#91]
  • Are we as carriers being able to provide IT services connected to twitter/Facebook in timely fashion? [#34]

Feedback: scepticism

It must be noted that there was a significant undercurrent of pessimism in some contributions, perhaps reflecting the economic situation, and also the increasing realisation that new business models are not a “quick fix”. In particular, we sensed frustration with the slow pace of internal Telco organisational change, and also a lack of awareness of response to “real world” concerns of consumers.

  • No thought of tying the presentations to the real world issues, too Western and focused on the past, needs to think in the future, feel no real innovation. [#41]
  • Services must add value, and address the issues of the day, this did not come through [#20]
  • ·         3 presentations about retail, however retail companies on the web for entertainment, purchase product (not network minutes) has not been addressed. [#43]
  • Our concerns relate to the saleability of some of the examples and also to the contextual scenarios that lack a twitter viral effect. [#55]
  • Not sure about moving completely off-portal. Most handsets do not have the screen and power to behave like a pc. [#57]
  • Need more focus on the participation aspects, still driven as a how do we impose services, rather than how do we identify demand. [#73]
  • Lack of analytics and underpinning data. All claims are good … [#84]
  • No thought of sustainability, there is lots of possibility here, but only old world thinking, how to ensure greener concerns are addressed [#32]
  • There are not a success example of Telco winning money in a digital market [#113]
  • The accountants who run most phone companies and the fear of creative destruction is the biggest barriers to new business model adoption [#116]
  • Has the current financial/economic crisis changed anything in the Telco 2.0 outlook with regards the retail customer? Hard to imagine it hasn’t….. [#66]
  • Re: Amdocs point about multi-screen apps, e.g. across mobile/PC/car etc. Is there hard evidence users actually want this, or just wishful thinking by vendors and operators [#5]
  • Can we find a way to make mobile operators go bankrupt? 50% EBITDA margin in an oligopolistic business is just a robbery. Wished Skype kills them [#61]
  • Many good ideas are presented, but fundamental different organizational capabilities and competences are needed to succeed. Should companies make a bet and focus according to which capabilities they are likely to succeed developing? [#112
  • Don’t you think that ‘convergence’ is sometimes much more violent than what is described, i.e. each player want the golden share more than cooperating to grow a market. for example in media delivery, CEs v. Telcos [#81]

Feedback: do telco people know anything here?

One specific sub-theme that emerged was whether Telco executives can really read the minds of youth & other groups.

  • How come the people discussing teenage digital behaviours have been so far male over 50? [#38]
  • o    Note 38: people who run phone companies are generally old white guys. That’s why. [#52]
  • o    Do 50 year old males really understand teen/youth behaviour? Yes, because we have teen children to observe and pay for their digital habits! [#62]
  • Suggestion: invite digital natives to the next Telco2.0 to spice the whole thing up! [#96]

Feedback: privacy, security, and customer data

Another issue, which also cropped up in the session on subscriber data management, was that of privacy

  • Amdocs view of the world sounded rather big brotherish. Wouldn’t the regulator have a field day? What about the issue of customer privacy – how would this be managed in practice? [#19]
  • o    Re 19 and big brother – what confidence should consumers have that operators can control their vendors so that BSS companies can’t abuse access to customer data? [#131]
  • We must be careful with the use of customer’s information. Regulatory commissions are over. But Google or Facebook get a lot information of customer without problems [#102]

Feedback: Technology

Although later sections of the event went into more depth on technology, the retail section of the day also elicited some early feedback on some potential technical issues and problems

  • Sounds to me like the magic is in the application layer – not smart networks but rather smart applications. Think Internet hourglass – thin in the middle, just forward the packets. Keep a record CDR style but this again is an application layer thing… [#118]
  • What are the fundamental reasons why operators don’t roll out new business models> i would argue that it is a function of the cost of risk. the risk/cost is largely based on legacy BSS/OSS [#47]
  • Is there some sort of ‘middleware’ required to tie in the elements of the Telco infrastructure, corresponding to the eight axis in Norman’s talks? [#30]
  • About AMDOCS presentation: Looked very theoretical to me. How do you put yourself in the middle of trillions of real-time connections? [#59]
  • We see that customer segmentation is quite complex to manage therefore requires smart solutions in software, architecture, man power [#29]
  • Telcos are still very far away on having that dynamic. Today’s heavy architectures are not aligned with 2 simple things: innovation and cost reduction. How to achieve both? [#88]

Feedback: iPhone

Inevitably, some of the comments invoked the iPhone’s impressive success in developing a new end-to-end business model in mobile. What’s Apple got that everyone else hasn’t?

  • Any idea why Apple is winning the loyalty of the i-phone user rather than the operator who provided it and operates it? [#23]
  • Because the device is the differentiator. [#58]
  • Over 40% of new i-Phone subs are coming from other service providers. The ease of use, apps store and feature set are compelling people to move. [#80]
  • i-Phone loyalty reflects the fact that people think of the device as a standalone product (like iPod or PC), not as ‘part of a service from the operator’. You don’t have loyalty to the electricity provider you use to charge your phone, do you? [#132]

Feedback: Others, Questions

  • Sorry, for the Telco there is no money in exposing the API for location and presence? It makes yahoo good. [#126]
  • Risk of a new service, lower the risk easier to test out a service before high volume deployment. Traditional Telco (wire line) very risk averse due to cost of new service deployment [#50]
  • There are two sides of the debate on rolling out new business models 1) limitations in the back office 2) business policies and procedures [#100]
  • Some interesting ideas around the consumer market but what about the significant enterprise market? What approach should be taken to this? [#94]
  • Are Telco brands important in the new world? [#130]
  • Currently the digital natives see little or no value in Telco brands; they only see value in content brands. How should the Telco’s address that challenge? [#128]
  •  Re 21 instant messaging by Telco failed to take off but Skype does not. Many services provided by Telco I [#99]
  • Will Blyk ever be profitable? [#107]
  • Do we think the Chinese SN [social networks] will work in Western Europe? [#95]
  • Most of ideas are focused on Smartphones. Is their penetration and usage (majority of Smartphone users only use it for calls), enough to justify a quick change? [#104] [Telco 2.0 – not necessarily, it should be possible to run many of these new services on featurephones, especially the next generation which will have quite good web browsers]
  • Why don’t you use Twitter to show a real case of social participation now? [#117]
  • What about KPI’s regarding new services that are going to be created? [#68]
  • Pre-paid will be used as a part of applications, because more and more consumers know the model of prepaid will be reusable by SP. May be it is not a good idea for common usage. [#76]

Participants ‘Next Steps’ vote

Participants were asked which of the following statements best described their views on the role operators should try to play in serving digital natives?

  • Be a really good dumb pipe. Provide connectivity and voice messaging only and let the ‘over the top’ players get on with innovating services
  • Retail supermarket. Sell Telco or third-party services via online platform.
  • Enabler. Allow third-party innovators to do a better job by giving them access to Telco capabilities and assets (identity, billing etc).
  • Retail – enabler. Sell own and third-party products AND ensure they are improved through access to Telco enabling capabilities.

retail-vote.png

Lessons learnt & next steps

Taken together, the presentations, feedback and final vote highlight an industry in transition – but still very uncertain of the precise direction or roadmap. Early examples and case studies of new retail telecom business models are like gold dust – scrutinised and dissected to yield any generic insights. Irrespective of the aim to develop two-sided business models and open platforms, it is also clear that strategists are still focused on extracting the maximum value from today’s existing services.          

Looking at the results of this section’s vote, it is unsurprising that few people in the industry see the dumb pipe as an attractive future strategy. But more interestingly, the concept of a retail supermarket, which had been widely seen as an attractive option in the past, seems to have fallen away, reflecting a desire by Telcos to ensure that they can still differentiate and add value through their infrastructure. This shift may also reflect the awareness that this type of retail operation would put them head-to-head in competition with Apple’s AppStore and various other service portals. It also highlights the dilemma of Telcos’ desire for exclusivity, set against application providers’ hope for the widest possible distribution.

The Telco 2.0 team agrees with the outputs of the vote – the most attractive options involve turning the operator’s network (and possibly devices – see below) into a platform of “enablers” for third party services and applications. These assets and capabilities may not be easy to deliver – either organisationally or technically – but once in place, should provide a much more defensible source of value.

Marc Davis, Chief Scientist, Yahoo! Mobile: ”Give the user ownership of this information! This is crucial! You could geocode all my photos or send me restaurant recommendations; but just give me value!”

There is a fairly even split between those suggesting that “enabled” services can be sold in retail by Telcos, versus those who believe that the exposed capabilities alone represent a more viable standalone basis for growth. In many ways, the reality will depend on a variety of factors – existing customer relationships, portfolio of existing inhouse services, ease of developing retail partnerships and so on. A tier-3 mobile operator with <1m subscribers and few smartphone users is going to find it hard to partner with the coolest web brands. A former fixed-line incumbent, in its home market, with enviable billing relationships to a sizeable % of the country, is in a much better position.

It is worth noting that various of these applications simply cannot be “sold” through an operator’s retail store, as they will be small but integral parts of much larger services. In the same way, Amazon is able to enable the development and sale of a huge variety of other products and services, but would be the wrong company to try and retail all of them to its customer base. (Sellers of fresh food or fuels, for example, would not fit with Amazon’s logistics business, but might still exploit its various online commerce enablers).

Richard Titus, Controller Future Media, BBC: ”In general, you need to remember that the data is the asset, not connectivity. Connectivity is a loss leader. But data is buried treasure.”

In the short term, the following needs to occur:

  • Continued emphasis on getting C-level buy-in and commitment
  • Identification by Telcos of areas for quick pilot deployments of new business approaches
  • A focus on deploying services like Buongiorno’s, which are “enhanced 1.0” models, with a relatively straightforward roadmap towards 2.0 options as they mature.
  • Willingness to publish details of successes and failures – despite the competitive aspects of the marketplace, we are still at a stage where the industry as a whole needs validation.
  • Awareness of tactical acquisition opportunities, given the contraints of the recession
  • Pragmatism about retail services that can use “lowest common denominator” service components like SMS and the existing installed base of legacy phones or home gateways, even if they lack the “sexiness” of those that can exploit the latest smartphones or intelligent end-points.

 

Longer term, the emphasis clearly has to be on developing full-fledged platforms open to developers, as well as exploiting new distribution channels.

  • Structure and incentivise the retail operations in a fashion that enables them to compete on a level playing field with future wholesale customers. This does not necessarily mean structural separation, but it will need some “chinese walls” and changing attitudes from protectionist to competitive.
  • Go back to the drawing board and develop a full strategy for voice and messaging services. Despite the move towards cheap/free minutes, there are ways to extract value through other business models.
  • Pragmatism about relationships with leading Internet players. Trying to compete head-on with FaceBook or Google is unlikely to succeed. There is more mileage in looking to enable peripheral service or capabilities, or partnering directly if the Telco has sufficient scale.
  • There is no reason that Telcos should not retail each others’ services if they are particularly good. At the moment, there are extremely few instances of Operator X selling an application developed (and maybe branded) by Operator Y. Would you really rather deal with Google than your peers?
  • Invest in behavioural research, but in ways that directly translate to new relationships rather than putative services with a multi-year development timeline. Think “R&P” (research & partner) rather than R&D.