The rise of Internet technology and the success of over-the-top (OTT) players continues to have an enormous impact on traditional players in the telecoms ecosystem. Fighting disruption or seeking to maintain the status quo is ineffective in a world of increasingly and irreversibly IP-based communications. Sustainable new business models focus on exploiting the core competence of operators, separating access and services, and innovative network design.

  • Traditional telcos still have many advantages: network infrastructure, billing systems, customer relationship and trust, identity authentication via subscriber number, vast amounts of customer data, brand awareness, building infrastructure, recognized regulation. In emerging markets the social compact remains strong; the ‘threat’ from OTTs is greatest in developed markets.
  • Some form of separation of network access and service delivery allows for layered model:
    • Split into network infrastructure operator and services company, increasing value of both parts.
    • Create services division within operator to compete directly with OTTs.
    • Invest in innovative service providers and application developers as third parties to better manage the risk of entering new space with new culture and pace of innovation.
    • Partner with key vertical industry players to create content, leveraging scale of network and customer base in health, education.
    • Stick to core competency as a utility offering neutral network, billing and CRM.
  • Innovation in pricing:
    • Move from minutes-based model to charging for bits and usage to capture value from the bandwidth.
    • Separate access and content pricing models.
    • Monetize end-user data, the audience rather than traditional subscription model.
    • Tiered access costs in free to premium scale dependent on quality of services, off-peak/peak usage. Above an established minimum quality threshold, data capacity, speed and quality can be charged to scale.
    • Increase basic price of broadband to maintain value.
  • Differentiate on value propositions based on quality of service:
    • Remaining a bastion of basic services which are “fit for purpose” with guaranteed quality standards, in particular for real time and voice communications.
    • Focus on reliable, secure, quality solutions for B2B – leaving consumer-facing services to OTTs. Differentiate investment between emerging markets (basic access) and developed (high speed, capacity and efficiency networks); provide services in response to different behaviours (such as mobile services arriving as first utility before electricity or water).
    • Provide service package for other industries and market players through identity authentication, subscriber number as single sign-on, payment and billing, content distribution, and advertising platform.
    • Exploit data, allowing association and de-association of data to create personalized services; data mining based on status as trusted data guardians; selling data wholesale.
    • Emergency services: provide minimal connectivity among multiple parallel networks in crisis situation.
    • Orchestrate services to enable networks to form ecosystem from isolated major OTTs, in central management role rather than control of services.
    • Localized and personalized network offering personalized services on programmable platform.
    • Dialogue, cooperation with other sectors to drive successful convergence, increase usage.
  • Innovate in network models and architecture building on applications of software defined network (SDN) in particular:
    • Monitor actual traffic flow on network to enable flexible, dynamic allocation of power and capacity, optimizing services.
    • Open, programmable network to enable analytics, personalization, rather than closed, static pipes; networks becoming trading spaces for cloud-based applications.
    • Enhance intelligence at edge of network to improve user experience on all aspects from gaming to health apps.
    • Combine connect (devices), compute (servers) and storage functions of cloud world, slice individually to offer infrastructure as service or individual, virtualized “my network”.
    • Human, social element at centre of network and model to ensure sustainability. WiFi is increasingly rescuing mobile operators struggling to meet data growth, both as back-up and as first point of access. Free, prepaid or pay-as-you-go models grow usage in times of financial crisis.
  • WiFi hotspots in public places such as hotels and restaurants bring in customers and provide targeted advertising potential.
  • Accelerate process of standardization to enable global functioning on next generation networks and harmonization with new cloud and M2M services, avoid duplication of effort, allow economies of scale and create a level playing field for international trade. Convergence standards vital to facilitate cross-sector cooperation.