Telco 2.0 Bussiness Model Map

On the Telco2.0 blog there is a very interesting 4 parts(part1, part2, part 3 and part 4) post to help operator’s answer the following questions:

Where am I?
Where do I want to go?
Which way do I need to go to get there?

The Big conclusion is not to focus on triple or quad play but to break up the broadband(Pipe) business model(horizontally and vertically). By doing so create new value and differentitaion(my reasoning, argumentation is missing in the post). Well…That sounds familiar. Have a look at this presentation about 3D Valuechains. I made this presentation not specifically for operators but business in general. My personal belief is that there is little new value to create by bundling and controlling a large part of the value chain. We basically should focus on individual parts and be no more than excellent in the seperate functions.

Here are some highlights that I discovered in this map:

We want to describe some new archipelagos and islands that telcos need to explore. Our thesis is that operators need to:

  • slice and dice the broadband connectivity offering in different ways, then
  • package it in different ways together with devices, software, services and
  • distribute it in different ways via the standard channels and sales methods.

Thus they assemble a portfolio of business models for paying off the network.



In the bottom left are free (or subsidised) community or municipal networks. For good or evil, we think that governments will see high social benefit in ubiquitous adoption, and new business models are likely to emerge to support this. Communities themselves will also work together to provide the next generation of access. (The current generation being the widespread “linksys” and “NETGEAR” open wi-fi access points bringing you this very article right now.)

The bottom-up connectivity model is epitomised by companies like FON. As femtocells and other technologies mature, carriers will embrace hybrid models of network build-out.

There is a small exception case for services like i-mode or ISP email that use connectivity charges to cross-subsidise services. This is a commercial dead-end but lives on another decade.

In the middle of the diagram are personal-area networks (PANs) and other unrouted connectivity. Existing examples might include Bluetooth, Zigbee, or even short-range Family Radio Service radios. We agree with Motorola on this one: there’s likely to be an explosion of value in this space, and operators are so attached to big centralised networks that they’re likely to miss the boat. A whole new raft of players enter based on payments, games, next-gen walkie-talkies, presence sensing, and social media sharing. One to watch.

The growth in capacity of storage media greatly outstrips that of CPUs, batteries or dynamic memory. Within a decade, you’ll be able to buy a music phone with every song every recorded. Soon after, every movie will be thrown in too. Today operators sell devices where the memory is empty. It’s like Coke selling aluminium cans with a pack of sugar syrup and instructions to “just add water”.

In reaction to the “one-size-fits-all” nature of IPTV, peer-to-peer content delivery grows — and the networks evolve to support rather than throttle this behaviour. The content delivery networks (CDNs) incorporate P2P functionality, and everyone is happy.

Two big growth stories will dominate: one is already on the radar, of ad-funded services and connectivity; the other is service-funded connectivity where the user pays the price they see — no hidden postage or package charges, no bill shock, no metered usage anxiety.

An increasing number of devices will come with connectivity embedded as part of the deal, and no recurring charges (at least initially). This is the reverse of the cellular model, where the hardware is subsidised by the service fee. In practise many of these devices will be part of bigger home or automotive services where the cost of billing isn’t worth the hassle when the connectivity only forms a small part of the overall solution cost.

Finally, the shark’s fin in the water. Various forms of tiered connectivity are going to emerge at an alternative to full-blown carrier-controlled QoS. Rather than recap everything here, go read our article on Paris Metro Pricing for some insight into the area.

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