BLENDED SERVICES - Telco smoothie
In today's financial environment, blended services may be the key to survival for
telco operators. With shareholder and investor audiences becoming increasingly difficult to please, fixed line and mobile operators need to identify new revenue streams - and one way of doing this is by looking within. Many operators have excellent applications and service environments, but they are split in two - one for their next generation networks and a second, older environment for their legacy networks. If a link existed that could seamlessly sit between the two and share applications across - or blend services - operators would be able to get the most out of the applications that they currently have says Mike Jones
Service blending is the practice of taking more than one service and combining them to make something new. Think of making a fruit smoothie - mixing bananas, strawberries, and oranges together isn't something that naturally occurs in the wild, but when blended makes a delicious treat. Considered separately these fruits are all delicious in their own right, however the blending of these fruits has created a business where there was not one previously - the act of blending is considered a value-add above merely the fruits alone, and therefore can demand a higher price.
Also consider that this business was created with ingredients that were already lying around the kitchen. There are people who are content with buying the fruits individually, but there will always be some people who are tired of the same old fruit, and will be willing to try something new if for no other reason than to break the monotony. This smoothie market was created when buyers were presented with something that they had not thought of or seen before. They expected to eat regular fruit, however when presented with something new, they were delighted with the prospect of experiencing a new sensation. This new sensation is what attracted their attention and money.
The last point to make with this analogy is that the key to unlocking this market was the tool - the blender! The tool is the enabler for this new market. Without the tool, the process of making the smoothie might have proven to be too expensive or ineffectively blended the ingredients. The right choice of tool is crucial to blending the fruit into a new, delicious, and refreshing beverage that opens new opportunities and revenue streams.
Blending telecommunications services has a great deal in common with blending fruit. Both need:
- Ingredients: Preferably ones that are already being used and therefore are readily available
- Innovation: Thought leaders that can see an opportunity for a new product or service
- Tool: An efficient enabler that provides the link between the idea and the product or service.
Telcos have the first two items, but are missing the right tool that can easily and cost effectively turn their ideas into reality.
Services are currently deployed as discrete functions within a network, which are akin to the individual fruits in a smoothie. SMS, voice mail, automated outbound calling, and pre-paid are all examples of discrete functions that are present in most service provider networks today. These services are discrete due to the complexity of interworking the application with the network, and this complexity is a leading cause of inefficiency in telco networks.
What if these services could be unlocked and offered for free consumption to application developers? Applications are rarely universally adopted by every subscriber in a network, so there are opportunities to repackage one or more of these discrete functions into a new service that will be consumable by a new user. For instance, a mobile subscriber may only think of automated dialing as something a telemarketer would use. However, that same mobile subscriber may view an automated wake-up call service as a useful feature. This is just one simple example of how the same discrete network function can be blended with, for example, SMS to create a new service using piece parts already in a network.
As the market continues to take shape, existing enhanced services are prime candidates for incremental innovation and arpu enhancements. By leveraging the existing enhanced services and creating innovation "on top" of them, service providers complement an understood user experience while at the same time, enable an ecosystem to reinforce the first social network application, voice services.
Innovation comes into play for blending old with new. Using the smoothie example, consider the fruit smoothie discussed earlier as being the "old" technology. Now consider a "new" technology, protein powder, which is being used by fitness enthusiasts. The blending of the "old" and the "new" in this case has enabled the smoothie vendor to start selling protein powder to a different audience, effectively creating a new market of fitness beverages.
This analogy once again carries into the Telco domain when compared to the legacy network and NGN. There are new services being created for NGN all the time, but how well do these applications work with the mainstay applications in the legacy network? Based on the fact that most NGN services duplicate the core functions of the legacy network, it's safe to assume that the new and the old interact very little or not at all. Which will be more profitable? Repackaging an existing service to address a new market, which is aimed at revenue growth, or duplicating a service to the same market for some nominal cost savings?
An example of service innovation in the telco market is the blending of "new" IT policy enforcement capabilities, such as web browser parental controls, with the "old" pre-paid application. This policy enforcement could be extended to control who, when, and where phone calls can be made or received. The blending of these technologies is another clear example of how two disparate technologies can be brought together to create a product that is marketed to people from two separate demographics - voice and IT security.
The key that unlocked the smoothie market was the blender. The right tool made the process of making the smoothie quick, efficient and cost effective. The telcos also need a tool like the blender that will unlock their services for the purpose of creating something new. This tool will:
- Protect the telco by ensuring that their services operate independently from the underlying network
- Prevent vendor lock-in by opening up the core network services as building blocks for new applications
- Support telco and IT technologies such and IN and web services for the cultivation of multiple ecosystems
- Create service building blocks from the old and new networks for rapid creation of innovative services
- Support the reliability and scalabilty required by large scale services
- Unlock trapped arpu
What service providers must do is protect the value and innovation potential of their legacy network by ensuring that their services can be offered independent of the underlying networks and, more importantly, independent of the vendors enabling those networks. Service providers who choose to open up their applications for mass consumption have the potential to open up new markets. By doing this, telcos can avoid falling into the vendor lock-in trap, and ensure that their investments in new technologies achieve maximum ROI.
Mike Jones, is Sales Engineer with AppTrigger
www.apptrigger.com
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