In today's new age of communications, each piece of the service chain, from equipment manufacturers to application developers to network operators and everyone in between has had to challenge their traditional business models
, looking for new ways to drive revenue while cutting both operational and capital expenditures.
In the service provider community, we've already talked about the idea of outsourcing network resources and management to reduce the need for network additional infrastructure buildout on one hand, and as a means for increasing ROI on network assets on the other.
For those network operators
that intend on continuing that model - network ownership - in addition to looking at leasing bandwidth and network capacity to partners, the other critical element will be to identify the right third-party partnerships that will provide the applications, services, and content most desirable to their customers. After all, the end game is about customer service, which means securing the right products that will create brand loyalty.
The challenge is not only to find the right mix of third-party providers
, but to also find the right model that will provide value to not only the end user, but the network operator and third-party developers and service providers as well. The benefit for the operators is obvious - they can leverage these services to attract and retain subscribers.
For these third parties
, it's not as simple, because the value proposition for them comes from gaining access to operators' resources, which they have traditionally been reluctant to part with. The new business model however, is changing their position - out of necessity more than desire - and many are looking at ways to build these third-party relationships by providing access to telco resources and assets, such as guaranteed QoS, presence status, BSS/OSS support, hosting of services, customer support, etc.
While these trade-offs seem a logical step, little ground has been gained, largely because network operators are reluctant to allow access to their closely guarded goldmine of client-related information. However, in order to make this new collaborative model work, they will need to come around to some middle ground. As network operators look to move forward with these plans, a recent Alcatel-Lucent whitepaper
offers a set of 10 guidelines for doing it successfully.
1. Establish a set of KPIs that set benchmarks for improving performance in this area. Key benchmarks (set on a timeline) could include number of developers actively using the program, time to develop new services, time to onboard and configure new services, number of services developed per annum, revenue earned from third party programs both in absolute terms and as a proportion of revenues, and RoI on new services deployed.
2. Take a pragmatic initial approach to working with third parties, aiming to show through simple early-to-market solutions how the new relationship could work and demonstrating that superior value really can be created.
3. At the same time, be ready to have a variety of business and commercial solutions available over time. Since the universe of third parties is vast and varied, different business models and resources may in time need to be made available and marketed, depending on the type of partner, the value of the relationship and so on.
4. Understand which third parties are most likely to respond positively to an invitation to work with you, probably through detailed market research. There is no general rule here, as it depends on a range of factors including the network operator's size, competitive position, geographic position, customer set, strategic objectives, services available and so on.
5. Use software platforms that are suitable or adaptable for use by particular kinds of developers. This may include using the RESTful and Ajax software architectures used by Web developers, as well supporting more heavyweight environments used by mainstream IT developers.
6. Sell the ability to connect third parties with end users wherever they are--through both partnerships and technology. This means resolving issues on behalf of third parties such as the customer's location, type of access network, device and so on. It also means focusing on enablers that feature automatic configuration and auto-adaptation on the fly, as well as customer support. It may also mean actively supporting suitable standards as they emerge from the community.
7. Break down internal walls and barriers between the key stakeholders, which will include CIO, CTO, OSS/BSS, network operations, CRM, product management and marketing. This in turn means that programs must be supported and driven at board level.
8. Deploy policy and QoS tools that are designed from the start to help enrich relationships with third parties, rather than simply as tools to control the behavior of applications or the telco's own services.
9. Focus on dismantling subscriber data silos and getting consensus on rules for using that data. Subscriber profiling in its widest sense could be the most valuable tool that network providers own, enabling highly personalized subscriber offers to be constructed, but consolidating, harmonizing and securing that data is a long-term task.Emphasize the ability to identify and authenticate individuals in a secure environment, as well as the ability to bill them. Network providers (especially mobile network providers) are in a strong position to do this, and it is a capability that will be valued by third parties.