Mobile Payments Opening Up Huge Opportunities for Service Providers

Next Generation Communications Blog

Mobile Payments Opening Up Huge Opportunities for Service Providers

By Ed Silverstein

An increasing number of network providers are adopting new business models and embracing open development. Such activities represent new strategies to accelerate application enablement and address the growing demand for applications across consumers and enterprises.

By efficiently enabling applications and collaborating with third parties in a more open manner, network providers can establish their place as value-added participants in the emerging application ecosystem. There is no “one-size fits all” approach for network providers to accomplish these objectives. Instead, network providers will need to consider, and possibly adopt, multiple business models to reap the full benefits of the application opportunity. These models vary across customer segments, device/terminals, and networks based on the specific demands of the end market and interested developers. In addition, a network provider’s own internal strategic and organizational position will impact model selection.

Network providers face many challenges in both decision-making and execution. The industry innovators and early followers have already begun to take action, as they perceive opportunity in the midst of turmoil. All network providers need to develop concrete plans in this area based on their current competitive context and desired future positioning.

Today’s market reality includes a range of new value-chain players who are bringing new applications to end users across both wireline and wireless networks. For many network providers, there is no additional revenue beyond user access fees for the delivery of third-party applications that do not utilize network capabilities. And network providers who continue to rely solely on traditional access business models for revenue growth risk loss of relevancy, commoditization and increased churn.

Some 71 percent of network providers launch less than five applications per month; those who do launch more utilize a developer platform or 3rd party hosted app store, according to Alcatel-Lucent research.

New telco business models allow greater collaboration with value-chain players who are willing to pay for network provider capabilities exposed as open APIs.

Some 75 percent of app developers are willing to pay for subscriber preferences and location, according to Alcatel-Lucent.

Network providers can become more agile, remain relevant and gain new diversified revenues by offering these and other developer-valued capabilities via new telco business models.

How can network providers benefit from consumers’ insatiable demand for bandwidth-hungry applications? Alcatel-Lucent addresses this crucial question through application enablement, a new industry vision for new revenue generation and improved end-user experience. Application enablement starts with an ongoing assessment of consumers’ expectations and needs — and offers effective new ways to meet their demands. 

Today’s consumers may rely on the latest technologies and Web 2.0 capabilities, but that’s not their primary interest. What they’re really looking for is a satisfying experience, through communicating with friends and family, sharing their lives and interests and enjoying entertainment on demand. To deliver this type of compelling experience, network providers must begin with a solid understanding of their target market. That’s why Alcatel-Lucent conducts primary market research through its Market Advantage program. These studies gather up-to date information on a full range of enterprise and consumer segments, across all ages and regions.


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