For network providers competing in the current economic conditions, creating a business case for the enablement of third party applications can being a very trying task. With the fast-paced nature of today's application and content ecosystem, developing a strategic and financially-sound ACP program business case involves meticulous planning and research as well as a thorough knowledge of the variety of modeling options that are available.
In an attempt to offer network providers a better understanding of the number of potential business case options at their disposal, Alcatel Lucent recently performed wide-ranging economic analysis that goes through the pros and cons of each solution. While officials with the global telecommunications giant admit that each business model will need to be tailored to a network provider's specific situation, the article should give NPs a framework to make the best decision for them.
Alcatel-Lucent identified six core business models that represent the most common approaches for ACP collaboration. The business case options are detailed below.
1) Operator Led: Model where a network provider takes full responsibility for the program and establishes direct, standardized relationships with many ACPs.
2) Aggregator: A partnership approach where responsibility is shared between the network provider and content aggregator.
3) Mass Wholesale: The network provider grants ACPs access to the network, but has no direct relationship with end users.
4) Enterprise Customer: Network provider enables enterprise owned applications, rather than providing application directly.
5) Trusted Partner: This is one-off approach to establishing a relationship with an ACP to enable a specific application.
6) Internet Model: Network providers are not involved in the creation of new applications/services choosing instead to provide bit delivery only.
As the article points out, each of these strategies can offer network providers certain advantages, depending upon their given situation.
"One model may provide direct revenue from the sale of 3rd party applications, while another may help reduce subscriber churn or market share while generating limited revenue from application sales," wrote Chris Kapuscinski and Ann Marie Vega, the two authors of the article.
The report walks readers through each model's cost structure, financial benefits, inherent risk and many other sets of drivers.
Alcatel-Lucent's wide breadth of experience in the analysis of network provider economics can help company's develop a business case that takes into account all the benefits and risks associated with the enablement of application and content provider collaboration. For more information on Alcatel-Lucent and their solutions, click here.