taking policy to the
smart connected device

Archive for July, 2011

#Mobile money: A case for MNOs to add value?

Written by GoS on . Posted in Blog

At the recent GSM Mobile Money summit, keynote speaker Dickson Chu of banking colossus Citi emphasised the need for banks to play a key role in the emerging mobile money ecosystem and to avoid the threat of becoming “dumb pipes”.

One could say the same thing about mobile network operators (MNOs). Mr Chu remarked that banks enjoy traditional strengths in terms of trust, security and regulatory compliance. As do MNOs. These assets need to be leveraged to ensure that the security demanded by mobile money users is in place. Mobile money needs service assurance and guarantees that banks and MNOs can provide. As a recent article showed, security issues remain a real threat to mobile transactions.

The GSMA recognises the market potential and has suggested that MNOs can play a key role, particularly in growing global remittance commissions. But MNOs also have an advantage in the way in which they can control and police their networks. They need to use their policy and service control assets to determine how they can offer capabilities to other stakeholders that enhance security and the user experience for mobile banking and transactions.

If MNOs extend their network boundary to include handsets and devices, they can offer additional capabilities to other stakeholders in the banking ecosystem, determining application performance and identifying authorised or unauthorised activities. While revenue on a single transactional basis might be low, in the aggregate they could amount to a substantial market as the user base extends to address all mobile users.

MNOs need to carve out a strong niche in the mobile money ecosystem that depends on more than simply providing the connectivity. By forging partnerships with key stakeholders, such as banks, network operators can leverage their assets to create new revenue streams and fully participate in the banking ecosystem, rather than simply being a pipe for transactions.

Triple Play Offers: Advantage Cable Operators? How can DSL Operators Fight Back?

Written by GoS on . Posted in Blog

A recent report suggests that cable operators have an advantage over operators with DSL products when it comes to offering triple-play bundles, because all of their subscribers consume the core TV offer, whereas for DSL providers with IPTV packages, only a subset of their total subscriber base consumes the full triple-play package.

This means that it is harder for incumbents to reduce the price of TV packages within their bundle packages, as they don’t have the benefit of subscribers who pay for the TV element but not broadband. It’s therefore harder to compete in markets with both cable and DSL providers. The report suggests that incumbent operators (and other DSL providers) need to focus on premium packages with strong content in order to justify this price differential.

But while content is essential, it’s not the only way to increase value. Service reliability is likely to become an increasingly important factor in choosing between multiple providers in a competitive market. Although it’s often taken for granted, increased uptake of more demanding services could create an opportunity for operators and service providers to charge a premium for differentiated or guaranteed service performance levels, resulting in service reliability becoming an asset, not simply an assumed commodity. We have already seen the beginning of this with the emergence of premium pricing based on specific applications, such as gaming and the trend is likely to accelerate.

An article in the UK’s Observer newspaper this week also makes the point that services that many consumers take for granted and treat as free, such as Facebook or Twitter are, in fact businesses, whose objective is, ultimately, to make money for their shareholders. Although an obvious point, it’s one that we would do well to remember. Sooner or later, they will want to make money, to recoup the massive investment in their service offerings. And, in order to do this, they will need to find ways to monetise their consumers. We have already seen this with Spotify, also in the news this week for receipt of fresh funding to fuel expansion. It moved from a free service to one with premium offers and uptake has been significant – more than one million of its six million users now pay.

And this means that operators can differentiate themselves on the quality and reliability of the connections through which users access these services. Once people accept that they may have to pay for an enhanced offer, it’s not too much to imagine that they will seek the best connections through which to enjoy these. There’s no point having a premium service if your connectivity to it is unreliable and slow. Of course, it also raises the possibility that operators could charge either the consumer of the service for this reliability, or potentially both the provider of the service and the consumer.

So, while content may currently be a key differentiator, quality, reliability and predictability will also become differentiators. Operators may not be able to compete effectively with cable operators in the TV market, but they do have an opportunity to help consumers make the most of other services that they will be paying for. Investment in the ability to manage and monitor these connections, even from inside user devices will be crucial to the success of these ambitions.

The real-time #cloud is more demanding

Written by GoS on . Posted in Blog

Cloud computing continues to dominate technology headlines. Each week, we see new announcements about enterprise and consumer services that are cloud based. Many of these services are non-real time, but an increasing proportion of cloud-based applications have real-time requirements. Of course, in order for these to be met, a reliable and consistent network connection is mandatory. People won’t pay for things that don’t work and, as we noted in a previous post, the providers of services that are currently free will, not unreasonably, expect to make money from their user base – somehow.

Of course, this is taken for granted in the business world. But we now have the added complication that enterprise cloud services will be expected to work perfectly over any connection. Increasingly, this will mean mobile. Business users won’t tolerate service affecting issues with network connections, particularly with services that need to function in real- time.

Network operators should be able to exploit this, whether for their own cloud service portfolio or for cloud services offered by “over the top” providers. Perhaps it’s not clear how at this point, but there should be ways in which they can charge business users for premium, guaranteed connections and charge the cloud service provider to ensure service guarantees.

And, although the cloud services market is in flux, with much to be resolved as this article points out, there are plenty of ideas emerging. Expect to see many developments over the coming months, particularly as the complication of delivering real-time services to mobile devices becomes more widely recognised.