Opening up access to third parties

Staff writer
24 Feb 2012
00:00

The rapid growth of the digital value chain has forced mobile operators to move away from the traditional dumb-pipe based model. In theory, this will give telcos an opportunity to avoid being merely a utility provider but to grow as an innovative service provider.

Ironically, mobile operators spent the first five years of the introduction of 3G debating what the "killer application" would be, says Dirk Wolter, Cisco's director of mobility architecture for APAC, China and Japan. Then in 2007 the iPhone was introduced to the world, and since then "smartphones have been killing 3G networks."

He says ubiquitous mobile broadband access and large touch-screen smartphones have facilitated an amazing amount of innovation in the wider mobile ecosystem - in applications, services and content. And the mobilization of the internet has irreversibly changed the mobile value chain, he says.

He noted that while worldwide operator revenues grew at about 4% year-on-year between 2008 and 2012, OTT providers' revenues are expected to grow by 11%.

"The OTT providers are becoming more intimate with the subscriber, with the various application stores and content services demanding direct wallet share, which would have previously been the sole domain of the operators," Wolter says.

As operators search for the winning formula that will lift ARPU, one approach that is evolving is a two-sided revenue model, which focuses on both B2C and B2B revenue opportunities - wherein the operator works closely with partners in the ecosystem.

Operators, being the sole mediator with end-to-end visibility of the end-user and his preferences, can gain differentiation through reliability, segmentation of services and the overall customer experience. These attributes allow telcos to introduce advanced policies to ensure services are delivered economically and reliably, according to predetermined market segmentation strategies, and carefully manage their monetization models and customer care to optimize the overall user experience and benefit their partners.

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