By Susan Campbell
Service provider (SP) revenues are taking significant revenue hits from application and content providers (ACPs) as the disaggregation of content from physical access shifts value generation opportunities toward third parties. At the same time SPs are also attempting to ward off “free” offerings, such as people using things like Skype for making phone calls who are willing to put up with inferior quality, by attracting people to superior services they will pay a premium for. The challenge, which every day gains more urgency, is how to react to both trends.
The objective is to be relevant and central in evolving ecosystems and thereby be in a position to maximize new opportunities while minimizing risks. The vehicle for turning things around is embodied in the desirability of creating a new conversation experience with customers based on a holistic strategic approach.
A recent Alcatel-Lucent article, The Value of the New Conversation Experience highlighted the need for service providers to increase the average revenue per user and reduce churn, two of the major revenue corrosive issues. It focused on the reality that to accomplish these goals, SPs must quickly bring to market enhanced service bundles and also rapidly introduce innovative service offerings with compelling and differentiated perceivable value as critical to combating free services.
According to research and business models provided by Alcatel-Lucent (ALU), establishing a new conversation experience offers SPs the means to create sustained business value. It cautions that the value has to be communicated correctly to users and made attractive to all members of evolving ecosystems as well.
ALU’ research reveals that service providers willing to leverage things like IMS technology can capture and keep the attention of their customers through by enabling a more intimate relationship that is experienced as being personal, seamless, secure and social. However, a rich communication suite is not enough.
The research found that users want something with the attributes of ALU’s new conversation experience if they are to remain loyal which in turn can provide service providers with a broad and long term business value.
To truly deliver this new conversation experience, it’s critical that service providers understand what is required. For instance, the article says that customers want such things as:
- Delivery of enriched voice to enable VoIP through a presence- and chat-ready enhanced network address book
- One number service for all calling
- HD quality IP-based video calling and sharing services through the availability of an enhanced network address book
- Intuitive messaging for a converged messaging
- Single inbox service between SMS, IM, MMS, video mail and voice mail
The key to all of the above and many more is that each of these services can deliver only short-term business value when delivered alone. Worse, they can be easily commoditized. When the services are bundled together, however, they are the foundation for the delivery of the new conversation experience.
To position service providers to generate new and sustainable revenue streams, ALU contends that the focus needs to be on creating integrated communications solutions, combining services and delivering enhanced bundles. This may include a Multimedia Pack to extend enriched voice, intuitive messaging and live video and access to enhanced bundles to deliver on the new conversation experience.
The key for the service provider is to develop the right offering and the right strategy for taking the offering to market. They must then employ sophisticated business modeling techniques so they can react quickly to maximize opportunity and minimize risks in a rapidly changing world.
ALU contends that the new conversation experience is the best way for service providers to create long-term differentiated and sustainable value and that now is the time to start the conversation before as they say, “the window of opportunity is closes.”
As with so many aspects of modern life, the Internet has profoundly changed the nature of relationships between buyers and sellers. Choice and not dictates are the rule and not the exception, and the customers because of access to information and alternatives now have historically unprecedented leverage. They are willing to talk but under new terms and conditions which are going to require new approaches to engagement both short and long term. It is as stated, a new conversation experience. It certainly appears to be a conversation worth getting started.