Next-Gen Services over the Broadband Network: Making the Future Now

30 Jun 2008

by John Janowiak, President, International Engineering Consortium (IEC)

As broadband capacity and penetration continue their march into the mass market, and as innovative Web 2.0 applications gain greater traction on the net, service providers are beginning to look at new value-added broadband services for their constituents. No longer just simple VoIP or even linear IPTV, carriers seeking differentiation and competitive advantage are looking to enable new kinds of services mash-ups, peer-to-peer real-time interactivity, and anywhere portability across networks, devices, and platforms. The race to innovate and lead in this space – and do it cost-effectively – can mean success or failure in delivering entertainment/communications services.

The Business Model for Value-Added Services

Services that fall within the category of value-added include digital home control and monitoring; 360-degree gaming; online storage, backup, and remote access; third-party security suites; Web 2.0 content and applications, etc. Industry observers agree that these applications can add value to a service provider's core broadband bundles, yet the business model is still being hashed out.

"Broadband value-added services other than IPTV and VoIP are still largely under-monetized," says Yuanzhe Cai, Director of Broadband and Gaming with Parks Associates. "Broadband service providers with a comprehensive and consistent approach to deploying various VAS will benefit from lower churn rates, additional revenues, and higher trust with subscribers."

One of the most popular of such services is the PC "dashboard" – a single, user-friendly interface to help users manage, automate, and monitor multiple PC maintenance and security tasks all in one place. Other on-demand or premium content broadband services are expected to generate additional revenues for service providers, beyond a mere flat-priced broadband connection. Indeed, carriers feel the keen need for it.

"Communications service providers now face shrinking margins on first generation broadband services and sharply declining revenues from traditional voice," says Larry Goldman, Partner and Co-Founder of OSS Observer. "To offset these financial pressures, providers must rapidly and profitably grow their value-added data services. Doing this requires automated processes that can manage the complexity of new service offerings and profitably scale the volume of these services to significant levels."

Finding out just what services consumers are willing to pay for, how to deploy them effectively, and how to bill and maintain such services on a mass scale are still issues carriers are working out. The objective is to boost revenue as the price of triple-play offerings are dropping, and to avoid becoming dumb pipes by playing a more active role in the development of new applications and services.

Value-added services are the key to future broadband profitability and this will certainly be discussed at the Broadband World Forum Asia 2008 next month in Hong Kong. It's not just about connectivity, or even IPTV— consumers can get VoD from cable. It's about finding out what kind of personalized, broadband-based information and entertainment mix the consumer wants, and then delivering it with excellent quality of experience again and again.

It's Still the Content

Rapidly deploying value-added broadband services is dependent not only on the business model and the content being in place, but also the convergence-enabling network elements that allow for anytime, anywhere broadband. Examining the latest trends in this technology area is another main focus of the World Forum in Hong Kong.

"The future of broadband is not mere access. It's on-demand and pay-per-use services that attract a new tier of high value customers and open new revenue streams from current subscribers," says Mark Nicholson, Chief Technology Officer and Vice President, Product Development for Syndesis. "The fulfillment challenge that service providers still face, however, is how to deliver these value-added services profitably."

Services fulfillment, fixed-mobile broadband convergence, broadband penetration and rate, and migration to an all-IP infrastructure are just some of the enabling technologies that must be in place to ensure value-added services; these too will also be discussed at the Broadband World Forum Asia 2008, but perhaps more important is content – which, in many people's view, is still King.

End users want content in the form of video, gaming and music of course, but also emerging Web 2.0 content, such as user-generated multimedia messaging, point-to-point file sharing, video telephony and blogs, and other emerging applications. It's the "Wild West" out there right now in terms of where the sticky content is coming from, and service providers of all varieties need to be open to that.

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