Open Telco - cse.tkk.fi · 3/1/2010 Open Telco T-109.4300 Network Services Business Models...
Transcript of Open Telco - cse.tkk.fi · 3/1/2010 Open Telco T-109.4300 Network Services Business Models...
3/1/2010
Open Telco
T-109.4300 Network Services Business Models
18.02.2010
Data Communications Software
Researcher
Yrjö Raivio
Email: [email protected]
Tel: +358 50 568 9672
Open Telco enables new innovation
3/1/2010
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2
• Introduction• Service domain• Technology domain• Organization domain• Finance domain• Conclusions
Contents
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From Closed to Hybrid Model
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Closed Model
Walled Garden
Hybrid Model
Smart Bit PipeOpen Model
Bit Pipe
IMS
Open TelcoBit Pipe
Flat Rate
Degree of
openness
MP2P
Push PullSMS IM
Mobile
Web 2.0DRM
Creative Commons
WAP
Wireless Village
QoS
Security
Jabber
DynamicFlat Rate
iMode
Broker
RESTIN
Super distributionN-sided
model
Area
Long Tail
B-partypays
Web Services
P2P
Web 2.0
MSS
PoC
PremiumSMS
0700 &0800
VoIP
PTT monopoly
• Pressure from the Internet
• ARPU is declining
• Volume of mobile data is growing exponentially but revenues just linearly
• Service innovation difficult
– Lack of global markets
– Lack of standard APIs
– Lack of business case
• Open Telco a good opportunity for the Finnish ICT industry
• Principles can be applied to other industries also (ref. EVA report)
• Operators moving from Walled Garden towards openness: a hybrid model
Operators still make good profits but..
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Internet players have strengths
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APIs and Mashups in the Internet
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Source: www.ProgrammableWeb.com
Lessons from the Internet
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Network Effect
Context
Metcalfe´s and Reed´s Laws
Speed and quantity turns into quality
Every customer can be monetized (Privacy?)
Flickr: “Don´t build applications. Build context for interactions.”
Social networking - Viral marketing
Open Innovation – The Long Tail
Developers
Open and simple APIs & SDKs, automated support systems
Global access
Fair revenue sharing
The Long Tail of Mobile Services
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III Open Innovation
II Content Provider
Services
Serv
ice R
even
ue
s
Mobile Music
I Operator Services
Number of
ServicesCall & Share
Mobile Email
BusinessServices
InfoVoice SMS/MMS
PoC
Mobile TVHome Entertainment
Community
Location WEB2.0
Revenue
Ring
tonesGames
100 M€ ? M€2 B€Finnish
Market:
Mobile World Congress, 15.02.2010
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http://www.mobilebusinessbriefing.com/content/showdaily/2010/monday/pageflip.html Source:
Open Mobile Terminal Platform
Supported by large operators,
Nokia and Ericsson
BONDI: standard for W3C widgets
and web applications on mobile
Standard within12 months
15 largest operators
incl. TeliaSonera
3 billion subs
”..open international
applications platform”
30% commission?
What Open Telco can offer for
mashups?
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da
ta c
on
ne
ctiv
ity
billin
g
pre
se
nce
ide
ntity
loca
tionnetwork
internet (IP)
Operator
horisontalization
end user
Many passwords to remember, security issues, spam
Limitation to ad-based business models and tedious credit card use
Context to be provided manually by the user
Telco identity management
Telco charging and billing capability
Telco location and presence information
Limitation of targeting possibilities for advertisers
Telco demographics and profile information
Bad real-time quality, long response times, connection break-offs
Telco quality of service
High cost of voice related application integration
Integrated voice & messaging in Internet applications
vo
ice
me
ssa
gin
g
• A holistic business model framework
described in "Mobile Service Innovation
and Business Models", Bouwman et al.
(2008)
• Includes four domains: Service,
Technology, Organization, Finance
• Service Domain: end-user perspective,
customer value of the service
• Technology Domain: technical design of the
service
• Organization Domain: the value network
needed to realize the service
• Finance Domain: revenue models,
investments, financial arrangements of the
service
STOF model
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Service
domain
Finance
domain
Organization
domain
Technology
domain
Business
model
Value
for
customers
Value for
service
providers
Technology
domain
Organization
domain
Technology
domain
Finance
domain
Organization
domain
Technology
domain
Service
domain
Finance
domain
Organization
domain
Technology
domain
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Service domain
Complements other open APIs
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Social media
Hobbies
Context
Ecommerce
& advertizing
Emergency
Public
sector
Travelling
Message Payment
Location
OPEN
TELCO
APIsContext
SLA
Profile
Voice Identity
Public
transportation
B2B
• Idea: Profile based automated travelling information about local hotels, restaurants, public transportation and tourist attractions combined with tickets
• Targeted advertizing• Both business and private customers• Open Telco APIs: messaging, payment, location,
profile
Travel guide
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• Idea: Mobile ticket owner can impact on the event content, give feedback before, during and after the event
• Services tailored to concert ticket: live recordings, T-shirts, exclusive offers
• Open Telco APIs: messaging, payment, location, profile
Access ticket + voting & blogging
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Technology domain
Mobile network
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DOCUMENTTYPE 1 (1)
TypeUnitOrDepartmentHere TypeYourNameHere TypeDateHere
RNC
MSC/
VLR
BSC Other networks (GSM, PSTN, ISDN, etc)
Air
MS
MAP
BS
RAN
RNC
UE NB SGSN
MS BS
UE NB
GGSN IP-networks
MS/UE= 2G/3G Mobile Station BS/NB = 2G/3G Base Station
RNC = Radio Network Controller RAN = Radio Access Network
MSC = Mobile Switching Center
SGSN = Serving GPRS Support Node
SCP = Service Control Point HLR = Home Location Register
Backbone Backbone
Gr
CAP
Gn
GMSC GMSC
SCP SCP HLR HLR
GMSC = Gateway MSC GGSN = Gateway GPRS Support Node
CAP = CAMEL Application Part
Iub
Iur
IuCs
A
Gb
IuPs
Gs
Abis
VLR = Visitor Location Register
BSC = Base Station Controller
MAP = Mobile Application Protocol SMSCOSS/
BSS
OSS/BSS = Operations/Business Support System
SMSC = Short Message Service Centre
Call,
Presence
MessagingPayment,
Profile,
Statistics
QoS,
Browsing
Identity,
Location
Service
logic
WAP
Gateway
Architecture
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Support Functions
Adaptation Layer
MSS SMSC HLR …
Secure APIs
Developers & Services
Networks
ServiceMiddleware
ServiceCloud
LCS… IMS SMSC HLR LCS…
End Users End Users
• Privacy has a top priority, a show stopper
• Input into regulation, privacy rules are changing
• Novel ideas, do not invent a wheel again
• Avoid any new registers if possible
• EU directives vs. national law, APIs vs. Mashups
• Subscriber identity vs. Openness
• Differences between B2B and B2C, and passive (static) and active (dynamic) APIs
• Privacy management (User/Operator), levels and defaults
• Payment (telco and other purchases, remittances)
Security, Privacy and Trust
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Payment has still challenges ahead
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Source: Aamulehti, 18.02.2010
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Organization domain
Broker models
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Internet (IP)
Operator
Internet player
Broker
Network assets(authentication, billing,
location, presence, quality of service, etc.)
Types: Digital marketplace, audience builders, cost minimizers
Broker market requires critical mass for both sides (ref. SMS, roaming)
Broker must be neutral entity
Internet player
Internet player
Internet player
Internet player
Internet player
Internet player
Internet player
Internet player
Operator Operator Operator Operator Operator Operator Operator Operator
Value Chain
End
User
Content
Owner/
Originator
Content
Provider
Content
Aggregat
or
Marketing BillingApplication
Developer
Content fee
Op
era
to
r
Tra
ffic
fee
Te
rmin
al fe
e
Te
rmin
al
ve
nd
or
Reta
iler
•Analyze how open APIs impact on
each player of the value chain
•What new is required
•What new is achieved
Source: Haantie, 2006
Terminal
Content
Network
Infr
a
ve
nd
or
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Value Network
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Broker
End User
Broker
host
AdvertiserDeveloper
Operator
API
provider
Service
Network
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Finance domain
Two-sided business model (1/2)
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Operator accessible brokerage content market:
$100 B by year 2012
$350 B by year 2017
Source: STL Partners
Two-sided business model (2/2)
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A B C
End User Developer, SME
Advertiser…
Broker,
Operator
Subscription
Subsidization
Commission
Service fee
• Describes financial agreements between actors in value network
• Most important variables: capital, costs, revenues and risks; Target: win-win
• Open Telco equals Amazon type bazaar
• Subscription, advertising, transaction, volume, licensing, sponsorship, freemium = free & premium (1/10/90 rule)
• Fully automated processes for business transactions
• B-party pays (ref. lack of Facebook or Hobby club SMS notifications)
Finance factors
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• Mobile operators must react on ARPU decline
• Openness has clear advantages, but privacy challenges must be solved, a hybrid model
• Open Telco enables innovative business models (win-win)
• STOF model for business model analysis; STOF method for business model design
• This study provides Step 1 for STOF method followed by
– Step 2: Critical Success Factors (CSF)
– Step 3: Critical Design Issues (CDI)
– Step 4: Internal and external robustness check
• A lot of uncertainties, lack of end user feedback
• Multi-organizational trial required, Tekes/Tivit Cloud SW program prepared
Conclusions
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