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Telco 2.0 Strategy: Say It With Charts

A TV show called Who Wants to Be A Millionaire is apparently now the most internationally popular television franchise of all time. Its popularity comes partly from the tension created by the huge amounts of money at stake and partly because of its interaction with the audience and with interested parties (‘phone a friend’).

At Telco 2.0 events we also have an ‘Ask the Audience’ format, but the difference is that the audience is also the contestant, the question master and, in fact, the prize giver too. That is to say, the audience (or ‘participants’ as we prefer to call them) represent companies who have a chance of taking a slice of the new $250bn+ platform opportunity, and they collectively can make it happen if they share knowledge and collaborate effectively. The new business model we are proposing is one which ‘floats all boats’.

We’ve already published here a set of FAQs that came out of the event. There is much more brainstorming output from it, the majority of which we keep for those who invested their time, effort and money to come to the event. However, there were also some votes at the event, the results of which are worth sharing here to demonstrate that there is a groundswell of opinion towards the propositions we are making. The votes were on these questions:

  • How well do we understand the commercial needs of upstream partners (3rd Parties)? How well do upstream partners today understand the assets telcos have?
  • What is the best ‘next practice’ for voice?
  • Which approaches to fixed network video delivery will be most profitable 5 years from now?
  • How important will new wholesale products be to mobile internet data revenues in 5 years from now?
  • What is the best way of competing with a ‘Platform’ play?

Results here:

1a.) How well do we understand the commercial needs of upstream partners (3rd Parties)?

upstream-chart.png

1b.) How well do upstream partners today understand the assets telcos have?

upstream-assetschart.png

It’s therefore not surprising that we’re not getting better deals from Google, Yahoo and not engaging effectively with all the thousands of upstream 3rd parties who could become our paying customers.

(It’s worth pointing out that a major (potential) upstream customer speaking at the event, Ed Wray, Chairman of Betfair, was very clear indeed about what theoretically a telco could do for his business in terms of authentication services. But no one had ever offered it to him.)

2.) What is the best ‘next practice’ for voice?

sliceanddice.png

This is a key part of the new business model, where we see significant growth opportunities for telcos. It is something that can be done relatively easily, today. (Example here) It was good to see the concept supported by the event participants.

3.) Which approaches to fixed network video delivery will be most profitable 5 years from now?

From the inception of Telco 2.0, we’ve occasionally felt the need to be quite negative around big industry bets that we just don’t think will fulfill the ambition of bringing back the good old days. Yes again, supporting previous survey work, the vision of massive telco IPTV didn’t go down at all well. We asked which strategy for video delivery will be most profitable for telcos in 5 years:

• “Product Strategy” - Telco builds a complete end-to-end own-branded IPTV service (acquires and aggregates content, provides CPE and customer service)

• “Platform Strategy” - Telco provides a set-top-box (with broadband and broadcast interfaces) and content delivery network, and partners with media companies to provide a variety of partner-branded content services and user experiences

• “Pipe Strategy” - Telco builds a content delivery network as part of its broadband network, and re-sells a variety of CPE and content services from Apple, Sony, Sky, etc.

video-chart.png

The ‘audience’ was not entirely sure whether it should be a ‘telco-plus’ model, competing heavily on the set-top box, or a ‘telco-minus’ model, competing heavily on distribution and CDN-ing; in a sense, this is a choice between competing in retail and wholesale. But they are at least clear of the relative value of the first strategy. (Lessons for Mobile TV plans too…)

4.) How important will new wholesale products be to mobile internet data revenues in 5 years from now?

This is complex question, but a core one to the new Telco 2.0 business model.

isp-chart.png

A majority did put the revenue from this at over 10 per cent of mature market ISP activity in 2013, and more than a quarter over 20 per cent. This is an area that we will be creating more detailed use cases and business models for in the coming months…

5.) What is the best way of competing with a ‘Platform’ play?

The last vote at the event was around this question:

Slide1.PNG

In opening up their networks and IT systems for a ‘platform play’, how far up the value chain should operators typically compete? * Simple raw network APIs that others can aggregate and turn into application platform(s)
* Rich application platform(s) (e.g. BT Web21C, Verizon ODI) that others can aggregate (e.g. Microsoft)
* A common interconnected application platform (e.g. how PSTN works with an SS7 API)
* Specific vertical industry platform services (e.g. utilities, healthcare) that industry partners package and sell
* Complete vertical industry solutions

api-chart.png

This is a complex and critical issue. We’ll be developing more thoughts on this over the coming months…

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