The larger telecom operators have been reinventing themselves over the last couple of years again and again. They constantly look to replace voice revenue and profit lost due to competition, they fight price declines, migration and substitution effects. It’s a fine line of introducing new products as needed and demanded and at the same time not to cannibalize the own existing offering. After unbundling and specialization in the 90ties, incumbent operators today go after service bundling and multiple screen plays to tie their customers into their product and services portfolio. With a strong focus on services and entertainment, media is still big for a lot of them.
The Optaros assembled solution Room 2.0 for Swisscom Hospitality Services is a good example how next generation internet solutions can help telecom operators to maintain overall growth: SHS is providing their customers a portal to facilitate the transition from the old model “connectivity” (+ services) to the new model “premium services” (+ connectivity). It helps both retaining existing revenue sources while offering additional services and creating demand for a premium offering. Thanks to Assembly, Open Source and Open Standards support, this platform could be launched rapidly. It is easily adoptable to acquire additional services.
Recently, in addition the telco ecosystem is being extended widely by different “open” players and is therefore more and more difficult to control.
Especially in the mobile segment for consumers, data transfer is not only well supported but even encouraged. E.g. iPhone users talk less and surf more. Phones become small computers; computers and especially laptops become capable of using 3G networks and to leverage them for data transfer. The device through which the end users consume the operator’s services is less and less a standard handset and the handsets are less and less to be considered a controlled environment. With multiple browsers and application frameworks and especially open operating systems, the users take control more and more. Latest examples are the announcements of Google Gears for mobile devices or Microsoft’s Silverlight for Symbian. And the open handset alliance’s and Google’s Android is not just a new operating system. In a few years, the handset will be as open as personal computers have been for quite a while. And this introduces a new way of thinking. Away from the operators controlling the requirements for the handset manufacturer towards the user taking this cepter. The user is promoted into the center of the mobile eco system. The operator demoted to application network provider level. To come back to the iPhone case: according to this study by Rubicon, every second iPhone user has installed third party software on their designer smart phone and two thirds wish to do so in the future.
With Swisscom Labs, a large incumbent operator in Switzerland is showing how to consider this openness as an opportunity. They have applied the open innovation model to their product and services development process though this Web 2.0 telco forum. Swisscom knows sooner and better what their customers think of their new services and product and what else they expect to find. The platform is based on standard open source web frameworks and was designed and deployed by Optaros in less than 8 weeks.
A next step in opening the telecom operator’s world is to allow partners to leverage the existing infrastructure. Enabling third parties to leverage native telco assets and resources for new services or for pure reselling will help drastically increasing volume (long tail) and thus impact profitability. BT has done a great job with their Web SDK to enable 3rd parties and provide partners with the ability to re-package distribution assets like broadband or voice networks independent of the operator’s own retail efforts. They can then - based on those telco network and customer data assets - issue new services to support largely non-telco business processes.
This seems like a reduction of the telco business. But when you look at it from the right angle you will soon realize that a unique proposition will enable a new way of making business and a unique role in this new eco system for operators. Besides the use of infrastructure, the operator controls or can offer authentication and identity through verified billing records in the BSS and OSS, security assets, e.g. SIM, Location as in location based services, user behavior patterns (everything from micro blogging to average online and talk times), credit/eligibility and micropayment, channel availability (which device and service are you currently using?) and user network (who are you talking to?) and last but not least: service- and call centers.
With setting those capabilities free to use in non-telco business environments a whole new market opens as source for new revenues. Operators will focus on and continue to mature these distinctive assets to grow the market with partners as well as their own end users. With bridging the two business partner focusses, the telco’s primary operator role makes them logistics service providers for data. This to me seems like a safe bet, when it comes to future growth.
We will soon see platforms like the sourceforge marketplace in the open software space arising in the telecom world with more open and partner enabling offerings. The Apple App Store as announced last month is a first step.
Operators supporting the new ecosystem through operating such platforms will be the ones to benefit first from the ways of doing business in the new open telco space.
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The MCCA owns and oversees the operation of the Boston Convention & Exhibition Center (BCEC), which was recognized by the 2007 Spotlight Awards as the “Convention Center of the Year”, the John B. Hynes Veterans Memorial Convention Center, The MassMutual Center and the Boston Common Garage. Optaros’ Assembly Methodology (OptAM) will incorporate best-of-breed open source technologies and customized features to allow the MCCA to capitalize on the recent rapid increase in business and react efficiently to increasing demands on internal operations.
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