Understanding telecom complexity through visual analysis

Joseph Waring
04 Jan 2010

But this is nothing new, really. We’ve had PowerPoint and data visualizations like pie charts and bar graphs forever. And executive dashboards are widely used.Data visualization is valuable, but we’re talking about something more: a visualization of the complex system that creates that data. Telecoms need to understand the cause-and-effect structure of a telecom environment, along with how it changes over time, the flow of money as well as other sources of value.

Can you give an example?
We’ll start with a simple distinction. In a one-sided model, the wholesale supplier does not have a direct relationship with the customer, and is only paid by the vendor. In the two-sided model, the vendor—now called a “platform company”—receives money from two sources: the traditional customers but also a developer community that builds new services or applications on top of the platform, and which can be more aware of customer needs.

Figure 1: A traditional one-sided supply chain

Figure 2: In a two-sided business model, the platform company draws revenues from both the traditional customer but also potentially a developer community

That’s fine as a start, but how can this analysis lead me to a better understanding of how to manage—and dominate—a mobile ecosystem?
As we mentioned above, there is a feedback loop in this system that can lead to considerable growth. Operators who know how to create—and then profit from—the growth of a platform business model can be very successful.

Figure 3: Less well understood are the feedback dynamics over time in a two-sided business model, which lead to surprising results
But operators are not platform companies, are they? In most mobile ecosystems, the platform is the handset/operating system: Blackberry, HTC, Apple, Microsoft. Each has fostered a significant development community that increases the value of the platform by developing applications independent of the original vendor. What part does the operator play here?
You’re right. For instance, developers have extended the iPhone considerably, but it is the iPhone itself that is the platform, not the carrier to whose network the iPhone connects. However, carriers absolutely do participate in increased ARPU from the data services generated by a handset that encourages users to consume a greater amount of telecommunications services.
In an important new development, some operators are also participating directly in platform models. Case in point: Sprint, which has maintained a developer network for years, and which offers its developer community access to platform services like billing, location, and data services.
Figure 4: An operator may offer both its own platform and also partner with a handset company, which offers its own development platform, adding further complexity to the business model


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