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10 ways telecom can make money in the future a.k.a. telecom revenue 2.0

LTE roll-outs are taking place in America and Europe. Over-the-top-players are likely to start offering large-scale and free HD mobile VoIP over the next 6-18 months. Steeply declining ARPU will be the result. The telecom industry needs new revenue: telecom revenue 2.0. How can they do it?

1. Become a Telecom Venture Capitalist

Buying the number 2 o 3 player in a new market or creating a copy-cat solution has not worked. Think about Terra/Lycos/Vivendi portals, Keteque, etc. So the better option is to make sure innovative startups get partly funded by telecom operators. This assures that operators will be able to launch innovative solutions in the future. Just being a VC will not be enough. Also investment in quickly launching the new startup services and incorporating them into the existing product catalog are necessary.

2. SaaSification & Monetization

SaaS monetization is not reselling SaaS and keeping a 30-50% revenue share. SaaS monetization means offering others the development/hosting tools, sales channels, support facilities, etc. to quickly launch new SaaS solutions that are targeted at new niche or long tail segments. SaaSification means that existing license-based on-site applications can be quickly converted into subscription-based SaaS offerings. The operator is a SaaS enabler and brings together SaaS creators with SaaS customers.

3. Enterprise Mobilization, BPaaS and BYOD

There are millions of small, medium and large enterprises that have employees which bring smartphones and tablets to work [a.k.a. BYOD – bring-your-own-device]. Managing these solutions (security, provisioning, etc.) as well as mobilizing applications and internal processes [a.k.a. BPaaS – business processes as a service] will be a big opportunity. Corporate mobile app and mobile SaaS stores will be an important starting point. Solutions to quickly mobilize existing solutions, ideally without programming should come next.

4. M2M Monetization Solutions

At the moment M2M is not having big industry standards yet. Operators are ideally positioned to bring standards to quickly connect millions of devices and sensors to value added services. Most of these solutions will not be SIM-based so a pure-SIM strategy is likely to fail. Operators should think about enabling others to take advantage of the M2M revolution instead of building services themselves. Be the restaurant, tool shop and clothing store and not the gold digger during a gold rush.

5. Big Data and Data Intelligence as a Service

Operators are used to manage peta-bytes of data. However converting this data into information and knowledge is the next step towards monetizing data. At the moment big data solutions focus on storing, manipulating and reporting large volume of data. However the Big Data revolution is only just starting. We need big data apps, big data app stores, “big datafication” tools, etc.

6. All-you-can-eat HD Video-on-Demand

Global content distribution can be better done with the help of operators then without. Exporting Netflix-like business models to Europe, Asia, Africa, Latin-America, etc. is urgently necessary if Hollywood wants to avoid the next generation believing “content = free”. All-you-can-eat movies, series and music for €15/month is what should be aimed for.

7. NFC, micro-subscriptions, nano-payments, anonymous digital cash, etc.

Payment solutions are hot. Look at Paypal, Square, Dwolla, etc. Operators could play it nice and ask Visa, Mastercard, etc. how they can assist. However going a more disruptive route and helping Square and Dwolla serve a global marketplace are probably more lucrative. Except for NFC solutions also micro-subscriptions (e.g. €0.05/month) or nano-payments (e.g. €0.001/transaction) should be looked at.

Don’t forget that people will still want to buy things in a digital world which they do not want others to know about or from people or companies they do not trust. Anonymous digital cash solutions are needed when physical cash is no longer available. Unless of course you expect people to buy books about getting a divorce with the family’s credit card…

8. Build your own VAS for consumers and enterprises – iVAS.

Conference calls, PBX, etc. were the most advanced communication solutions offered by operators until recently. However creating visual drag-and-drop environments in which non-technical users can combine telecom and web assets to create new value-added-services can result in a new generation of VAS: iVAS. The VAS in which personal solutions are resolved by the people who suffer them. Especially in emerging countries where wide-spread smartphones and LTE are still some years off, iVAS can still have some good 3-5 years ahead. Examples would be personalized numbering schemas for my family & friends, distorting voices when I call somebody, etc. Let consumers and small enterprises be the creators by offering them visual  do-it-yourself tools. Combine solutions like Invox, OpenVBX, Google’s App Inventor, etc.

9. Software-defined networking solutions & Network as a Service

Networks are changing from hardware to software. This means network virtualization, outsourcing of network solutions (e.g. virtualized firewalls), etc. Operators are in a good position to offer a new generation of complex network solutions that can be very easily managed via a browser. Enterprises could substitute expensive on-site hardware for cheap monthly subscriptions of virtualized network solutions.

10. Long-Tail Solutions

Operators could be offering a large catalog of long-tail solutions that are targeted at specific industries or problem domains. Thousands of companies are building multi-device solutions. Mobile &  SmartTV virtualization and automated testing solutions would be of interest to them. Low-latency solutions could be of interest to the financial sector, e.g. automated trading. Call center and customer support services on-demand and via a subscription model. Many possible services in the collective intelligence, crowd-sourcing, gamification, computer vision, natural language processing, etc. domains.

Basically operators should create new departments that are financially and structurally independent from the main business and that look at new disruptive technologies/business ideas and how either directly or via partners new revenue can be generated with them.

What not to do?

Waste any more time. Do not focus on small or late-to-market solutions, e.g. reselling Microsoft 365, RCS like Joyn, etc. Focus on industry-changers, disruptive innovations, etc.

Yes LTE roll-out is important but without any solutions for telecom revenue 2.0, LTE will just kill ARPU. So action is required now. Action needs to be quick [forget about RFQs], agile [forget about standards – the iPhone / AppStore is a proprietary solution], well subsidized [no supplier will invest big R&D budgets to get a 15% revenue share] and independent [of red tape and corporate control so risk taking is rewarded, unless of course you predicted 5 years ago that Facebook and Angry Bird would be changing industries]…

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MWC 2012 in Barcelona is not focusing on new revenue

February 29, 2012 Leave a comment

MWC is supposed to show off the best innovations in the telecom industry. The telecom industry is desperately in need of a new business model to substitute falling revenues and pay for exploding data costs.

There were a lot of LTE innovations that were announced. However these will only generate new revenues for the solution providers and not for the telecom industry as a whole.

M2M was another major innovation area. However there was no announcement of any standardization whereby several large operators would push a common standard. Without this standard it will be hard for large scale M2M projects to deliver large profits. If the telecom industry wants to be seen as the leader in the M2M then they should take a leading role in its standardization.

Augmented reality is also pushing strong. However most players are over-the-top companies and not telecom solution providers or telecom operators.

Lots of new phones and tablets but this will also not generate new telecom revenues but will probably push operators into bit pipes sooner.

Cloud computing, big data, collective intelligence, gamification, etc. were under-represented. A lot of slides but few real mind-blowing products.

Operators are probably the once to blame most for this. There is no clear signal from them that they will be investing in revenue generating solutions in 2012-2013. The only thing you can hope for is revenue sharing. Why if you invest in making a stellar product would you want to go to endless RFPs and complex integration solutions if you could launch the product by yourself and become a successful over-the-top-player?

Social EPG, Semantics and how BroadCast becomes SocialCast

October 20, 2010 Leave a comment

Cable operators and telecom IPTV providers are delivering a hundred or more channels to each subscriber. However teens are no longer enticed by TV broadcast and like the Youtube model more. Even a video-on-demand service would not fully cater to their needs because they are interested in the top 5 minutes of a show or gossip program, not the other 40.

In the Twitter-world we got accustomed to URL shorteners like: TinyURL, Bit.ly, Is.gd, etc.  They take a long URL and make it short so it fits. What if a cable or IPTV provider would allow such URL shortening to be made for television programs?

TV Links

In search of a better word, let´s call them TV links. A TV link would be a short URL to a part of a television program that the viewer found interesting. By adding semantics to the part that is being linked, the viewer can provide information about what the TV link is about and why it caught his attention. Also automatically the program title and channel can be added from the public EPG.

Why would you need TV links?

A crowd of viewers that is watching all the hundreds of channels is filtering what is of interest to them and makes TV links to them. They can use the TV links to forward them to their friends on social networks. However by aggregating different TV links you can make social EPGs (electronic program guides). A social EPG is a collection of TV links that a group of viewers find interesting and often has a common theme or interest. Viewers that are under time pressure or from the Youtube generation can then easily pick the social EPG that most interests them and get all the content that peers with similar interests have preselected.  Collective intelligence can be used to find those social EPGs that are more similar to your tastes.

The Social EPG technology

You would need to have a TV or set top box that allows applications to be executed while you watch television. Most Android systems can do this already. Via the TV link app, you would be able to indicate which part of a program you want to create a link for and how you want to tag it. Via the social EPG app you would be able to search for TV links and combine them into a social EPG. The SocialCast app allows you to find and watch social EPGs.

Cloud DVR (digital video recorders) would be needed to be able to rewind and play what was broadcasted in the past. These could either be provided by the cable or IPTV provider but could alternatively also be provided by the TV channel. At the moment TV is wasting a lot of content because each program is being aired and afterwards it disappears in the archives. By having social EPG and TV links this content could be repeated over and over again. Content from years back would all of a sudden get a totally new dimension because the cute little boy that was singing a song has grown into a major star. Fans would collect these TV links into their social fan EPG and post them on their Facebook Walls.

The business model

Having viewers aggregating content so special interest groups can take a look at it, is the ideal marketing vehicle for targeted publicity. The Social EPG for a music star will have publicity around the latest concerts and music downloads. A CSI Fans Social EPG will get you all the CSI merchandise via a single click. Car programs get car publicity.

Hollywood

I am pretty sure that some Hollywood executive would have some objective towards replaying content that was broadcasted before. So a revenue share for the content generators and producers should be part of the eco-system.

Google TV, free content and the future of long-tail content delivery

Google is preparing to launch Google TV together with Sony, Logitech and Intel. Details about how the service will work and what will be in the Set-Top Box or Sony TVs are not very clear yet. However Google has been one of the few companies that is really driving the long-tail content and advertisement market. When Google TV is discussed then people are always talking about which content will be offered for what price…

What if content was free?

Or at least there would be a cheap all-you-can-eat price? Impossible? Why? Youtube is able to show personalized advertisement per viewer based on what you watched previously, how old you are, where you are, etc. So if a movie can be paid for by broadcast advertisement then it can probably also be paid for by personalized advertisement. Additionally knowing your content preferences allows for other up-sells, e.g. merchandising.

How much is Google going to pay for movies?

Perhaps nothing. Why can’t they do revenue sharing with content providers? This would allow for a long-tail content delivery market that is currently unheard of. Content providers would get a share of the advertisement revenue. Block busters would generate a lot of money whereas home bloopers or specialized documentaries would not. According to the Long-Tail theories however 98% of all content would be viewed at least ones a month. So Google might be able to make more money with the old-time classics, funniest amateur clips, etc. then with the Hollywood blockbusters.

The big losers?

Some startups that wanted to enter this space will probably die. Content generators would make the same money. Some studios might have to do with less. However telecom operators would have a large load on their network without any guarantees they get any extra cent…

Ten Times Faster Time-to-Market for Telco Innovations

September 27, 2010 Leave a comment

Google has changed very little to its basic architecture building blocks over the years. Everything runs on top of the Google File System and Bigtable. Except for Google Instant which is reversing Map-Reduce usage, new services have been reusing their existing architecture.

Similar observations can be made for the rest of the main players. So why is it that Telecom operators have not invested in one architecture to launch multiple services? No idea.

One architecture for VAS

The concept is simple. Create one common architecture. This architecture should have multiple components:

  • A high-available real-time data store – stores all application and user data
  • A right-time data analytics service – allows collective intelligence and data mining
  • An asset exposure layer – applications can re-use network assets and get isolated from internal complexities
  • Presentation layer – facilitate mobile GUI and Web 2.0 development
  • Application Engine – allows applications to run and focus on business logic instead of scaling and integration
  • Continuous Deployment – instead of monthly big-bang deployments, incremental daily or weekly releases are possible, even hourly like some dotcoms.
  • Unified Administration – one place to know what is happening both technically and business-wise with the applications.
  • Long-Tail Business Link – all business and accounting transactions for customers, partners, providers, etc. are centralized.
  • etc.

Having such an architecture in place would allow telco innovations to be brought to market at least ten times faster. Application and service designers would have to focus on business logic and not on the rest. Administrators would have one platform to manage and not a puzzle of systems. Integrations would have to be done ones to a common integration layer.

Building such an architecture should be done in the dotcom style and not a telco RFQ. Only by doing iterative projects which bring together the components can you build an architecture that is really used and not a side project that starts to have its own life.

It even makes sense to open source the architecture. Telco’s business is not about building architectures hence having a common platform that was started by one would benefit the whole industry. It even would give a competitive advantage to the one that started the architecture for knowing it better than any competitor. Of course for this to happen, a telco has to recognize that their future major competitors are not the neighboring telco but a global dotcom…

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