A different commitment: how Online Retail & Telecom can Innovate Together

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This is a guest post by Peter Briscoe, Executive Director of Innovation, Business Unit Support Solutions at Ericsson, on the opportunities for telcos and retailers to innovate together.

Currently there is a strong drive within the telecom's industry to define future service models and the focus on digital services has never been stronger. The recent New Digital Economics Brainstorm in London was a welcomed opportunity to not only discuss and debate the future among colleagues, but also to discover alternative points of view from banking, online retail, web service and other sectors.

By looking at existing online retail models we can see some challenging areas with fundamental differences that Communication Service Providers (CSP) will need to address, including zero future commitment and short duration services.

Until recently, only a small number of CSPs used payment models based on zero future commitment, where there is no recurring component and involve no additional cost for the consumer after the initial purchase. In most cases, this model is based on pay-before-delivery.

In contrast, most non-retail services, including utilities and telecommunication services, involve a minimum commitment - usually more than one day and in many cases months or years. It is therefore interesting to see how a CSP could adapt this alternative approach and address the challenges it can bring.

This lower level of commitment drives a new breed of short-duration services. With care, these service can provide higher margins and compensate for declining revenue streams elsewhere. People are willing to pay more for a short-duration service if it can be delivered in an immediate, efficient and simple way such as watching a downloaded film.

For short-duration services, greater real-time service enablement will necessitate additional partnerships and introduce new methods that do not require the same level of device pre-configuration and network configuration as required today.

The ability to bring all of these different views together will be the balancing act that many operators will attempt, and centre stage to this approach is how to create the right service enablement platform that can meet all of these demands and drive new business.

For us at Ericsson, the brainstorm was also a great opportunity to hear how companies are looking at new ways in which they can experiment and innovate on top of these new service enablement platforms. Mobily's Head of Innovation, Gaurav Basra, provided a great example of this. He explained not only how they enable internal innovation but bring gamification to the process with a virtual internal stock market for employee ideas.

Mixing retail and telecommunication companies shows that there are great benefits to be found in better understanding the existing online models and exploring how we can enrich them together. With this combination, I believe it will spark the next transformation in both markets.

Background on Author

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Peter Briscoe is executive director of innovation, Business Unit Support Solutions at Ericsson. He directs new programs intended to address evolving priorities in telecom software operations platforms. Briscoe has spent more than 19 years working in telecom operations support, with experience in consulting and software creation spanning fault management, service fulfillment and planning. He has worked on several large deployments around the world, specializing in new network technologies and equipment.