Selecting the Right Business Model to Enable the Delivery of New Applications and Services

Next Generation Communications Blog

Selecting the Right Business Model to Enable the Delivery of New Applications and Services

By David Sims
According to a recent Alcatel-Lucent-published study, supporting the business case for enablement of third-party applications is still "a significant challenge for network providers," one that requires "analysis, planning and understanding of implicit tradeoffs."
For the majority of network providers, the difficulty in building a business case is the single largest obstacle to launching new "application developer friendly" initiatives, Alcatel-Lucent finds:
"Many network providers are overwhelmed by the seemingly daunting task of developing an application and content provider program business case that simultaneously addresses strategic, financial and competitive imperatives."
This challenge is further amplified by the rapid pace of change in the application and content ecosystem as well, company officials say.
There is a way for network providers to overcome this challenge. Alcatel-Lucent has performed economic modeling with the goal of providing a solid understanding of the basic business case options, including key revenue and cost components, drivers and tradeoffs between models and scenarios.
Naturally tailoring to each individual network provider's implementation and context is required. Analysis, based on multiple business models and NPs key decision components, leads to "a practical economic and technical situation for ACP collaboration implementation," Alcatel-Lucent officials say.
The insights, which are spelled out in greater detail in the paper itself, are based on Alcatel-Lucent primary research using a broad representation of network providers worldwide.
However, one significant challenge with building the business case for ACP collaboration is the myriad of potential approaches for engagement. Network providers are challenged with selecting an appropriate approach and building a business case that is aligned with their strategic goals and tailored to
their individual situation.
To that end, Alcatel-Lucent has identified core business models, representing the major approaches employed by network providers for ACP collaboration. The top three business models are summarized briefly here:
Operator Led. This is the model where a network provider takes full responsibility for the program and establishes direct, standardized relationships with many ACPs.
Aggregator. A partnership approach where responsibility is shared between the network provider and content aggregator.
Mass Wholesale. Where the network provider grants ACPs access to the network, but has no direct relationship with end users.


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