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New Telco 2.0 Research: how to accelerate the implementation of new business model strategies

April 25, 2012|

STL Partners recently published a free report based on in-depth research among senior execs in ‘upstream’ industries (e.g. retail, media, IT, etc.) and telcos that shows that poor communication of the telecoms ‘Telco 2.0’ value proposition and slow implementation by operators is frustrating upstream customers and operators alike.

A key premise of the Telco 2.0 Initiative is that opportunities exist for operators to support third-party businesses in Customer Profiling, Marketing offers, ID & Authentication, Network QoS, and Billing, Payments & Collection. There is previously published research outlining the high level opportunity framework for this in the ‘Telco 2.0 Two-Sided Business Model Opportunity’ report, and subsequently the strategy development activities required in the ‘Roadmap to New Telco 2.0 Business Models’.

The new analysis identifies strategic customer segments for telcos building new ‘Telco 2.0’ business models, key obstacles to overcome, six real-world implementation strategy scenarios, and strategic recommendations for telcos.

Telco 2 Research

The free report was sponsored by Openet and the research, analysis and editorial were independently directed, managed and carried out by STL Partners. For more details, you can download the full report here.

By Chris Barraclough, Managing Director and Chief Strategist, STL Partners

Posted in Advertising, Cloud Computing, Monetization, OTT | Tagged , | Comment >>

The CSP Cloud: Moving From Rhetoric to Reality

April 3, 2012|

Core voice and messaging revenues are under pressure, and cloud is widely regarded by communication service providers (CSPs) as a source of replacement revenues. Currently, CSPs have some unique assets that confer on them a competitive advantage for the cloud, namely better billing, smarter networks and knowledge of customers. As more applications and services move to the public cloud, these are especially compelling.

But with hype making it appear as though the cloud is everywhere, the reality of cloud strategy and monetization for CSPs can be lost amid buzzwords and shaping of market expectations by internet and technology competitors.

To answer the question of what a CSP cloud could look like, we investigated the topic with IBM. Our answer comes in the form of a whitepaper, sponsored by Openet and IBM, and created by IDC. Here are the findings:

Don’t build a strategy on commodity cloud offerings

From the outset, CSP public cloud offerings must be built around their network.  While CSPs may offer a generic compute and storage model, this should be a building block, rather than an end state. Both mobility and a dynamic network will create a more compelling cloud experience: enabling prioritization of applications, assigning an appropriate Quality of Service and supporting ad hoc requests for service access and speeds.

Embracing and fully exploiting CSP delivery capabilities

With more companies looking to deliver their services via the public cloud,  CSPs have a number of assets that are attractive to developers – creating new offerings and market for their services. Classic service delivery features such as payments, bandwidth boost and end-to-end SLA, are valuable services that OTT cloud companies simply cannot match, and that fill gaps in a developer’s service portfolio to improve profitability and service quality.

Investing in an open, flexible cloud infrastructure

CSPs need to rethink their cloud platform to ensure they have the capabilities to innovate, enable new business models and improve execution. For example, what constitutes a successful business model will be regularly changing depending upon new services and subscribers, making an open, configurable infrastructure a must. Specifically, integrated policy, charging and subscriber data management software can act as a de facto cloud services innovation toolkit, improving the time-to-market for new services and supporting innovative packaging of offerings, along with providing better insights into subscriber behavior.

These are the key strategic principles required for carriers to monetize the cloud. For the full report, please click here.

Posted in Cloud Computing, Monetization, OTT | Tagged , , | Comment >>

Delivering the Safest Mobile Experience for Families and Children: Identifying and Stamping out Mobile Misuse and Cyberbullying

January 18, 2012|

Now that the holiday season is a dim and distant memory, many parents willbe wondering just what their kids are doing with the new smartphones they got as presents. Chances are they’ll be using them in bed, when they’re supposed to be sleeping, and in the classroom when accessing a social networking site seems a lot more attractive than long division. There’s also a chance that they will receive messages that cause them pain or distress, and a possibility that they are using their mobiles to bully other kids. Most parents have rules about how and when their kids can use their mobiles, but there’s the problem: many of these rules are useless because parents can’t enforce them and there’s a good chance  the kids will take steps to hide their mobile activity.

Unfortunately, the above scenario is an accurate reflection of mobile phone usage by teenagers, and this is supported by research conducted by Harris Interactive on behalf of Openet. The researchers interviewed more than 1,000 teenagers to gain insight into their mobile usage and behavior.  The results of the research showed a high degree of cyberbullying and potentially unsafe Internet usage– for example – in the U.S., 28% of teens have experienced cyberbullying on their mobile phones, with this figure rising to 46% for heavy users.

The research showed that parental rules are largely ineffective – 70% of teenagers say they have parental rules, but 47% of teenagers say their parents don’t monitor their mobile usage and 42% actively hide their mobile behavior from their parents.

Many mobile operators have guides for parents to ensure ‘safe’ mobile usage. This isn’t enough. This is ‘check box’ compliance. Operators that offer the most advanced parental controls solutions recognize that it makes good business sense. Some operators offer basic URL filtering free of charge, and then charge for usage controls. This means more loyal subscribers, more usage, and more value added service revenue – not to mention happier, safer customers.

Visit www.openet.com/parentalcontrols to learn more.

Posted in Control, Customer Experience, Personalization, Policy Management | Tagged , | Comment >>

Microsoft’s Xbox TV – Beating Google to the Punch

January 4, 2012|

With Microsoft’s launch of TV services over Xbox 360 consoles, the computing giant now certifiably has, for now, a better strategy than Google in creating a sustainable OTT business model for live TV content. The reasons for this advantage speak to the importance of knowing TVs stakeholders and catering to them effectively.

Google’s largely on-hiatus GoogleTV venture tried to control the TV navigation layer from service providers, so the search would get done via Google TV. Not surprisingly, it failed because the networks blocked them from indexing their content online. Microsoft is cooperating with the TV networks, so let’s see what business model Google TV is coming up with for its new launch. Those agreements are a win for Microsoft, especially with its more than 35 million U.S-based customers, but what’s really going on?

To get cable operator content on an Xbox, a customer needs to be a cable subscriber and pay $60 per year for an Xbox Live Gold subscription. Cable companies are also limiting what they’d deliver through the Xbox, for example:

  • Comcast is streaming previously aired on-demand video
  • Verizon’s FiOS only offers 24 channels
  • AT&T is sending its full cable lineup through the Xbox

The points above illustrate that set-top box replacement won’t be widespread at the present time, but Microsoft has lot of traction compared to how Google tried to approach the TV business. Additionally, the Xbox itself offers more than convergence – it’s a unified search mechanism from several content sources, of course its gaming element, along with some other cute elements like the voice/gesture recognition and phone remote capabilities, etc.

In my view, for now, this will go as far as Netflix, but some other fundamental elements of the business model would need to be there to be truly disruptive. How Google, and of course, Apple, approach their TV platforms in the wake of this will be very interesting, and may chart yet another course for the future of TV.

Posted in Monetization, OTT | Comment >>

Openet's Subscriber Engagement Engine: The Blueprint for Cultivating Real Operator-Subscriber Relationships

November 1, 2011|

Last week, we announced the Subscriber Engagement Engine – SEE for short. The product represents Openet’s commitment to helping mobile operators be more relevant in the lives of their subscribers. Unfortunately, for all to many subscribers, they only think of their mobile operator when they review the number of signal bars they are getting, or see the operator’s logo when they are powering down their phone after the aircraft doors close – that’s normally the case until their bill gets delivered. Mobile operators need to create a more active engagement with their subscribers.

To be more engaged, you need to be on the mobile device – in the subscriber’s hand.  The last thing people want to do is reserve the time out of their busy lives to sit down at a laptop and log in to some customer care website. People are too busy – the operator needs to be able to engage when the subscriber has the time. With an operator presence on the mobile device as a mobile app, representing the mobile operator and everything it can do for you will be the way of the future.

Operators already have a lot of information which would be very useful to the subscriber, including exactly where their billing/family plan spending stands right now, which service plans they currently have, how far into consuming these plans they are and how much is left. However, there are many more things the mobile operator can do which are quite easy when using software systems. Some of these capabilities are also very useful for subscribers. These include real-time roam rating (so subscribers know how much bandwidth is costing in real time, as it’s used), loyalty point plans and the spending of those plans for upgrades and services, frictionless purchasing of new services and parental self-care for family plans. Openet has built the engagement client for iPhone, iPad and Android, which do all of the above, and some other pretty cool use cases. We are busy working on lots more.

To mobile users: in the future, when you have an ideal 30 seconds at some airport waiting to check into a flight, you may find yourself reviewing exactly where you billing plan stands now – even though you’re half way through the month – reviewing what telecom services you can buy with the loyalty points you have earned by using your cell phone, purchasing a new bundle, configuring the service options for one of your kids or deciding whether to accept a recommendation you just received from a friend about a new service. And all of this will be on a mobile application which has your operator’s logo on it. Checking your plan, configuring services and buying add-ons will be as important as checking your credit card or bank account online – something most of us do every few days. In some cases it will be just a quick in and out inspection, in other cases, you will be deciding which new service to buy. Whichever it is – when you do – you’ll likely be using Openet’s software!

Posted in Control, Customer Experience, Personalization, Policy Management | Tagged | Comment >>

Sprint Joins Forces with Apple To Offer iPhone 4S. What Are the Impacts and Opportunities?

October 18, 2011|

On October 4th, 2011 Apple announced Sprint will be offering the iPhone 4S. Before 2011, subscribers in the US keen on having an iPhone only had one service provider option : AT&T. In early 2011 Verizon, announced the long-awaited iPhone for CDMA and now Sprint is officially a player in the iPhone game. This is great for subscribers, giving them more service provider choices, but how will it impact Sprint? Can Sprint continue to offer unlimited data or will the iPhone drive enough additional revenues to offset the additional network capacity cost? The short answer is: We’re not sure yet.

Let’s start by focusing on the fact that Sprint promotes being the only US operator with unlimited data plans. Just in case you haven’t seen the Sprint commercials that specifically call out competitors AT&T and Verizon for charging extra and/or throttling subscribers after 2 GB, here they are:

Sprint Now ‘Charts’ Video

 Sprint Now  ‘Dictionary’ Video

Ironically Sprint’s Dan Hesse has also publicly stated: “We can offer unlimited data, as long as usage on the network is reasonable. But if I have an all-you-can-eat buffet, and the entire New England Patriots football team shows up for dinner, it’s going to run me out of business.”

This commentary on unlimited plans reveals a fundamental weakness: that the integrity of the network relies on low user demand vs. operator control.

The reality is that as Apple’s iPhone evolves, it increasingly becomes more reliant on network bandwidth. For instance, Apple is promoting the 4S has the best camera on the market which can quickly upload to Flikr. More interestingly, it comes with a video recorder with 1080p resolution, which means higher quality and bigger files to upload. Speaking of uploading (and downloading), Apple’s continued push of the iCloud is only going to drive more bandwidth. If you aren’t familiar with Apple’s iCloud , here are aa few really cool but also network bandwidth-impacting features:

  • Photo Stream – photos are uploaded to iCloud under an online album and pushed to all of the other subscriber’s Apple devices such as MacBooks, iMacs and/or iPads.
  • Device Backup – allows subscribers to backup and restore Apple devices from the cloud.
  • Find My Friends – this application released by Apple’s Internet Software Services Division allows subscribers to share their location with family and friends. Potentially more impacting to operators like Sprint is that Parents can lock this feature “on” to track their kid’s location.
  • iTunes Match – This new feature allows subscribers to scan Apples 20 million song library and stream paid for music content to devices such as the iPhone 4S.

My point is simple. Sprint knows adding the iPhone is going to drive additional revenues and create more bandwidth needs. The opportunity for Sprint is to do what they and every other operator globally is doing; evolve to smarter networks. Smarter networks are all about optimizing network resources while sustaining a satisfactory QoE (Quality of Experience) to subscribers. The concept seems simple, but the reality is that there’s a combination of several solutions required to make this work. The most commonly discussed solutions are congestion management, data offloading, video optimization, etc. This is great for software companies like Openet that offer PCC (Policy and Charging Controls) products that help enable smarter networks, and great for the service providers who are always looking to optimize the user experience.

As for whether Sprint will keep its unlimited plan approach or cave to the power of the iPhone and move to tiered pricing—I don’t have a crystal ball, but my prediction is that Sprint will need to change is unlimited approach in some way to accommodate the iPhone, whether it be a plan change or another approach such as Fair Usage Controls.

Personally, I’m excited to get my own iPhone 4S check out the new iCloud features and leverage the dual CDMA and GSM capabilities for when I travel abroad. As for what my plan might look like…I can’t wait to find out!

Posted in Congestion, Control, Monetization, Policy Management | Tagged , | Comment >>

Embracing IP Video

September 27, 2011|

Faced with growing pay TV competition and the threat of cord-cutting from “over-the-top” (OTT) video providers, both cable operators and telcos are embracing IP video.

A big question, though, is how quickly service providers will make the full transition to IP video systems. Another big question is how service providers will manage and monetize their budding IP video systems.

In a new global survey of video providers, Heavy Reading found out the answers for Openet. Here are some key results:

More than four-fifths (83 percent) of video providers have started IP video trials or deployments or plan to do so by the end of next year. In fact, half said they have already begun trials or deployments of IP video. Plus, more than three-fifths (62 percent) of providers plan to offer IP-based video to over half of their subscribers by the end of 2013.

Hence, with the technology field likely to be level, providers should  think about how they will differentiate themselves from the competition, such as   by offering unique features,  delivering a greater breadth and depth of content, personalizing services, offers and devices, and/or providing a higher quality  of service.

As the study makes clear, service providers plan to leverage IP video technology to deliver both linear network programming and on-demand video, not just VoD. Slightly more than half (51 percent) of providers think they will deliver the bulk of their network programming over IP video systems by 2014. A somewhat larger majority (57 percent) will distribute the bulk of their on-demand content over IP video.

As a result, look for providers to craft new combinations and packages of subscription and sponsored video programming. For instance, a la carte offerings, long the bane of the cable industry, could finally become commonplace.

Usage controls are clearly on the rise, as network operators seek to manage traffic on their IP networks more closely and make money by doing so. In the survey, more than two-fifths (44 percent) of respondents said they are seeking to deploy various types of usage controls, while nearly half (49 percent) are still undecided. Just seven percent said they are definitely not looking to deploy them.

Service providers particularly intend to deploy policy tools for transmission speed, application type and service priority. But the mix of tools may vary greatly by provider and region. So expect video providers to experiment with various tools until they get the mix right.

Service providers are also looking to personalize their IP video offerings in one or more ways, focusing particularly on display devices, sales offers, pricing and packaging, and the quality of service. At least half of providers are thinking of applying personalization to one or more of these four areas within the next six months.

Thus, look for operators to use personalization efforts as a way to stand out from their rivals. As with usage controls, expect video providers to tinker with a number of personalization moves until they find the best combination.

Finally, service providers see great promise in monetization methods for premium content, especially one-time, or per-use, billing. Slightly over half (52 percent) of providers aim to introduce one-time billing for services beyond VoD within the next six months.

So expect providers to start putting these methods to work as they seek immediate financial payoff from IP video. But don’t necessarily expect these methods to generate much receipts right away. It will take time for consumers to adapt to the new IP video era, just as it will for video providers.

- Authored by guest blogger Alan Breznick who is a Senior Analyst at Heavy Reading and has worked with Openet on sponsored reports

Posted in Control, OTT, Policy Management, TV Everywhere, Video Optimization | Tagged , , | Comment >>

Shake it Up: Innovative LTE Pricing

September 7, 2011|

To date, there are more than 20 operators with live LTE services, and while we’re seeing some innovation in pricing and packaging with usage and speed tiers, it’s fair to comment that the real innovation in pricing is yet to kick in. Visit the website of any LTE operator and the message is clear. It’s all about speed. Some operators are now pricing speed tiers, and Telia in Sweden goes as far as offering a ‘speed promise’. They will guarantee a minimum of 10Mb/s for customers in an area of LTE coverage.

At present, most operators are providing LTE as a post-paid service. They are missing a significant market opportunity to make LTE available to as many customers as possible. With LTE, customers need the optimal experience – so operators need dynamic pricing and charging, which can involve real-time context aware offers (e.g. network speed upgrade, location-based offers) and controls (e.g. usage caps and notification, spend controls, etc.).

To some customers, data is new and talk of megabytes and gigabytes is confusing, so operators may need to consider application-based pricing. Some operators are bundling “free” services with basic offerings. For example, as part of its lowest cost LTE offer, U.S. operator MetroPCS offers Web browsing and unlimited YouTube. If customers want additional content and the ability to download content from other sites then they need to go to a more expensive plan. The point here is that stimulating usage by packaging a well-known and widely-used content service reduces risk for the customer as they know how much they’re paying and what they’re going to get. In other countries, we’re seeing operators providing bundles of applications and selling them at different price points to attract different segments of customers.

The changes enabled by LTE, such as faster speeds and end-to-end quality of service measurement, will lead to the use of a wider range of services with an increased and more diverse use of mobile data and content. This can lead to micro-segmentation and personalization, which will in turn help accelerate more flexible pricing and charging options that benefit both customers and carriers. These could include family and group usage plans, multi-device plans and application plans. By including options such as these into LTE pricing plans, operators can increase the value that LTE delivers to its customers. In addition, we’ll see more subsidized usage (from content providers and advertisers), more dynamic pricing (real-time context sensitive offers), and smarter tiers (QoS-specific levels). LTE enables much more dynamic usage of a wider range of products and services, so operators need to start providing built-in flexibility on their monetization solutions to maximize the real return on investment of LTE.

For more information on strategic issues on LTE check out Openet’s LTE Knowledge Management Centre www.openet.com/lte

Posted in LTE, Monetization | Tagged | Comment >>

Changing the Channel on the TV Business

August 10, 2011|

Choice. Real choice.  Americans crave it in the electoral process and it is the power of the democratic ideal.  We go to great lengths to demand the ability to choose.  And we seem to have found it with television.

 

The days of one hundred channels and nothing to watch appears to be largely a thing of the past.  Americans are watching more TV in more places, according to a recent Nielsen report.  Nearly 289 million Americans watched television in the home in the first quarter of 2011, up 0.8 percent compared with the first quarter of 2010.  The average American spends

159 hours per month watching television in the home, an additional 4.5 hours of content on the Web, and yet another 4 hours of video on mobile devices.  That only begins to tell the story.  The real story is that thanks to the power of choice, the mythical average profile no longer describes any individual very well.

TV Everywhere, or more precisely content anywhere, has freed society to enjoy the kinds of entertainment they most desire in new ways.  This disruption is the ruin of Blockbuster and Borders, and yes, the slow death of movie theaters and over-the-air TV with
program-interrupting three-minute ads.

The winners are time-shifted TV, with 107 million Americans viewing time-shifted content – and skipping ads – in the first quarter, up 13.2 percent compared with the first quarter of 2010; streaming video, via the Web, is increasingly viewed through nascent Internet connected TVs, as nearly 20 percent of all TVs shipped last year feature connected TV capabilities; and mobile video, with youth driving the  latter category, as 25 to 34 year olds are 24 percent more likely to watch movies on iPods, and 21 percent more likely to watch films on tablets and smartphones than those who are between the ages of 35 to 64.

Is the content any better?  Arguably that is not the case so much as that search and discovery tools are becoming far superior.  People can actually find content they want to watch. And they can watch it in far more convenient ways – not simply surfing channels, hours after a show or a movie is no longer playing on live TV.

This disruption also means that service providers can no longer make simplistic assumptions about their average user.  Market segmentation is occurring more dramatically in this industry than perhaps in any other.  Choice is creating new demands, new business models.  Customers want personalization – the ability to tailor the use of services, search and discovery capabilities, options for consumption and payment, desires for one-time usage and impulse purchases – to be under their control, not dictated by  onstraining categories that no longer fit their usage patterns.

Choice is freedom.  This freedom can be good for business, but only if business adapts to new models that enable it to thrive.  Or else, choice goes elsewhere.  Choice is disruption – harnessed, it is a powerful force for industry success.

Posted in Customer Experience, iPad, Personalization, TV Everywhere | Comment >>

Breaking the Netflix Myth

July 27, 2011|

Services such as Netflix have enlightened consumers about the advantages of on-demand content, available from any device, with limited advertising. We’ll soon live in a world where we can potentially unbundle content to buy whatever episodes, seasons, genres or channels we want and view that content on whatever device we desire. All and all, while cord cutting rates persist for operators, Netflix’s streaming model continues to expand its reach in the US and internationally.

Love was in the air for Netflix – until recently.

This month, Netflix announced that it would no longer offer a plan that includes both unlimited movie streaming and unlimited DVD rental. These two services will now be offered separately, starting at $7.99 each. If purchased together, consumers will experience a 60% hike from their current $9.99 a month membership for unlimited streaming and unlimited DVDs.

As expected, there was a strong reaction among consumers and the company received thousands of upset comments on their company blog and Facebook page. Additionally, media and bloggers began to talk about how Netflix has made itself vulnerable to its competitors. Case in point, PCWorld magazine came up with a list of Netflix alternatives. Additionally, the ‘unthinkable’ happened: customers started thinking about leaving Netflix altogether.

When Netflix first came up with its streaming business model back in 2007, nobody else was ‘there’ and it wasn’t quite threatening the traditional TV and movie business.

But now, Netflix is facing a network overload issue. For example, Netflix is responsible for close to 30% of peak Internet traffic in North America, compared with less than 17% for Web browsing. A recent analysis by GLG Research found “an online movie viewer could easily download 10-20 GB per month for movies alone, with say 1-2 movies per week.” Needless to say, this type of consumption quickly exceeds data caps and will force content providers like Netflix to shoulder the costs.

Additionally, Netflix today means rising cost and no revenue for network operators. Plus, the other harm comes from a brand erosion perspective as consumers begin to associate Netflix, Android, Amazon or Apple as their telecom brands.

This recent pricing change is aimed at trying to move away from the costly business of physical DVD rentals to the more cost-effective business of streaming movies and TV shows online, and follows similar tiered data pricing models from Verizon, AT&T as well as Canada’s Shaw Communications’ new Movie Club. Time Warner Cable’s CEO already stated that a consumption element is inevitable to broadband billing and Comcast limits its broadband customers to 250GB per month as a traffic-management tool.

Streaming content providers lack the breadth and more extensive choice of content currently available from traditional TV service providers with less delay from the original airing date. Additionally, Pay-TV operators have been de facto subsidizing their OTT competitors via their contracts with the content providers, and Pay-TV subscribers have been subsidizing the content providers through consumer subscription fees. This content is then purchased by Netflix (or similar services) for a lower price, which they then offer to their customers on the backs of the pay-TV operators.

Netflix has educated consumers about the benefits of on-demand content, but this pricing change reflects the challenges that all content providers are facing or will face in the coming months.

While the “right way” has yet to be found, it’s time for a new ‘world order’ in the communications industry with the outcome benefitting everyone in the value chain: network operators, content providers, OTTs and most of all, customers. Is it a zero-sum game? We don’t think so. Coopetition is preferable to disintermediation for everyone. But we’ll likely need a bigger meeting room when negotiations begin.

Posted in Customer Experience, OTT, TV Everywhere | Tagged | Comment >>