Use Cases 2.0: Five new business models in action
For our forthcoming EMEA and US Executive Brainstorms, and for a new strategy report, we’ve been working on a set of five new ‘use cases’ that bring ‘two-sided’ telecoms business models to life. The ‘use cases’ describe the application in detail, and an outline business case for the opportunity.
There’s a presentation on the background here, and more on each one and what they mean for the industry below.
So what are the use cases?
- Digital Advertising 2.0: Local Mobile Search
- Broadband 2.0: Managed Mobile-to-Fixed data offload service
- Digital Money 2.0: Introducing Mobile Banking to mature markets
- Digital Home 2.0: Telcos’ role in Smart Grid
- Voice and Messaging 2.0: SME productivity platform
1. Digital Advertising 2.0: Local Mobile Search Use Case
The first use case reflects our long standing interest in the possibilities and pitfalls of the vast resources of customer data the telecoms industry is sitting on. The possibilities in terms of social networking, advertising, marketing, and business intelligence are huge – though there are significant challenges too. For example, the first ever scientific study of public attitudes to targeted advertising shows that people appear to be highly sensitive to the use of behavioural data. This use case will explore how to tackle this combined problem and opportunity.
It’s never like this when you really need a taxi
The Use Case focuses on providing immediate Local Mobile Search services that deliver relevant results to customers on the basis of their current location. The consumer proposition is a free local search SMS short-code. Sending a text containing search terms grants permission to enable the use of the Telco’s embedded location information. Responses are returned free to the user, paid for by the advertisers, and carrying paid results with greatest prominence (as per Google search). The aggregating agent for the advertising can be a partner directory service or search specialist. The Telco gains a share of the revenue, either from wholesale SMS charges or by a revenue share model.
2. Broadband 2.0: Managed Mobile-to-Fixed data offload service
Our new Broadband 2.0 Use Case shows a new way to ease the increasing data traffic on mobile networks and the associated cost surge and creates a new wholesale revenue opportunity for Fixed broadband service providers (BSPs).
An expensive way to solve the mobile data capacity crunch is to install ever more cell sites. A potentially cheaper and easier way is to relieve the backhaul and core networks by shuffling bulk Internet traffic off to the fixed broadband network and out to the public Internet at the earliest possible stage.
We see two phases: ‘Offload 1.0’ as Mobile Operators use femtocells or WiFi on either their own sister-company's fixed broadband, or a third party's broadband without optimisation, and ‘Offload 2.0’, with Mobile operators dealing with fixed-line BSPs wholesale arms (not just their own "captive" arms). Offload 1.0 is a good start, but Offload 2.0 is needed to create the network effects to offload sufficient volumes, improve operational effectiveness and "groom" the traffic in a variety of ways.
3. Digital Money 2.0: Introducing Mobile Banking to mature markets
Nearly 200 million people live outside of their countries of birth, 93% of whom on a voluntary or economic basis driving over $300 bn in worldwide, international remittances per annum. Yet many in this segment are poorly served by Banking Services.
The Digital Money use case looks at the huge success of m-banking/money transfer services in emerging markets, and asks how operators could extend this business into the unbanked segments of developed markets - a “reverse leapfrogging” strategy. The Use Case:
- Sizes the global market opportunity
- Details a consumer proposition and core experience
- Analyses major flows of international migration and the existing, highly costly, money transfer opportunities available to them
- Analyses the costs, risks and mitigations, and overall business proposition of a mobile-based m-banking service targeted at migrants.
3. Digital Home 2.0: Telcos’ role in Smart Grid
Smart grid technology - adding rich controls to the electricity grid using modern telecoms - is emerging as a megatrend. Developed and fast-industrialising countries are pouring money into grid upgrades, driven by an increasing concern for energy efficiency and the climate.
Managing the grid better offers significant efficiency gains, and the possibility of integrating much greater percentages of variable renewable forms like wind or solar power into the mix. However, the electricity industry has been very keen to outsource its billing and measurement operations, leaving it short of the key assets it needs to build on. This may open up an opportunity for the telcos to be more than simply providers of bulk SMS/USSD messaging. Through this Use Case we explore which technologies and business models are best used and what is the best balance for each operator, region and nation in terms of sophistication vs. costs.
4. Voice and Messaging 2.0: SME productivity platform
- Cut costs through increased automation and more streamlined processes to reduce demand variability and under-utilisation
- Increase revenues through better customer understanding (e.g. in-store feedback) and reducing the number of no-shows
For central deployments in larger organisations, businesses rely on a combination of application providers and systems integrators to get fully customised solutions that are approved by both senior management and the IT department. However the rise of software as a service applications has meant hat many smaller firms and departments can look at adding deployments which add value but don’t affect existing systems. By integrating these solutions with communications, they can add greater value still. We believe operators are in a strong position to bring this vision to fruition as a platform for a range of CEBP applications.