Recently in Alcatel-Lucent Technology News Category

Enabling the Application & Content Provider: Collaboration for Innovation

Posted by: Erik Linask | November 18, 2009 12:14 AM | 0 Comments
Alcatel-Lucent's application enablement strategy, which focuses on network operators' ability to effectively develop, deliver, and monetize new applications and services relies on two distinct components: the operator's network and the relationship between the operator and the application and content provider community.
 
In the second iteration of Alcatel-Lucent's online publication, Enriching Communications, which focused on the strength of partnerships and ecosystems in today's competitive communications environment, Carrie Hydro, Senior Director for Solutions Marketing at Alcatel-Lucent, and Patricia Hargil, Head of Global Strategic Programs, focused on the latter half of the application enablement proposition. Specifically, they considered the implications of recent research by Alcatel-Lucent regarding how ACPs (application and content providers) view the opportunity to collaborate with network operators.
 
Working on the understanding that network operators are going have to rely on third-party applications and content to drive sustainable growth and revenues, it's evident that their ability to do so lies in their willingness to provide value from their networks to their existing and future partners. However, while operators are in a position to increase the pace of service innovation, to date, the single greatest obstacle has been their ability (or willingness) to deliver a winning proposition to the ACP community.
 
According to Alcatel-Lucent's research, however, the opportunity for network providers to collaborate with ACPs is very real - as long as they are willing to expose their network resources to benefit their partners. In fact, network providers were named as the second most valuable partnership opportunities by the ACP respondents, behind hosting/utility providers - and that's only because hosting providers have been a traditional resource for cost-effective, scalable capacity.
 
Network providers, however, have potential to move to the top of the list because of the potential value that rests in their networks. Their ability to leverage that value rests not in capital investment, but in accepting that allowing access to network resources, like subscriber data, Quality of Service, security, bandwidth, and more.
 
By offering their partners access to their network intelligence, network operators can foster a more trusting, more equitable relationship with ACPs, prompting them to not only develop more applications and content faster, but to tailor them to targeted subscribers, creating a more viable and predictable revenue model.
 
That's not to say that infrastructure investment will not be required - moving to what Alcatel-Lucent calls high leverage networks will enable network providers to scale effectively as they cultivate new relationships, add new subscribers, and introduce new applications and services. Alcatel-Lucent pegged the ACP market in 2008 at about $800 billion, with double-digit growth expected, so naturally, some infrastructure enhancements will be required (that much is, perhaps, self evident based on the growth of the global smartphone market and the increase in data-intensive applications resulting from the introduction of the iPhone and other similar devices in the past two years.
 
Thus, in order to offset infrastructure costs, network providers will have to collaborate more effectively with their ACP partners to ensure they have access to a wide range of sticky services and can deliver a differentiated, high-quality user experience.
 
For more on the evolving relationship between network providers and application and content providers, read the complete article, Application/Content Provider and Network Provider Cooperation Drives Innovation and Value for All.

Alcatel-Lucent Turns Focus to Green IT, Launches Eco-Sustainability Site

Posted by: Erik Linask | November 17, 2009 10:47 PM | 0 Comments
Energy efficiency and carbon footprint are no longer peripheral issues for today's businesses. Rather, Green IT has become a vital consideration when making communications equipment purchasing decisions.  With the increased attention being placed on green IT and eco-sustainable solutions, driven by not only the rising cost of energy, but growing corporate environmental awareness as well, it has become imperative for telecom equipment vendors to devote resources to developing products and solutions that fit into their customers' green initiatives.
 
Alcatel-Lucent is developing its end-to-end network equipment with an eye towards "greenness," helping its customers and their end users reduce the environmental impact of the communications solutions and products they use each day. Taking a holistic approach to eco-sustainable networks, Alcatel-Lucent is able to help its customers leverage its intelligent network equipment to drive energy efficiency throughout their end-to-end networks.
 
For instance, it has reduced carbon emissions from its CDMA and GSM base stations by 40 and 50 percent, respectively. It also has cut emissions from its DSL access lines by 20 percent. These figures represent only a slice of the green development at Alcatel-Lucent in its global research facilities, where it is focusing current research on thermal management of components, power management of equipment, and topographical management of networks, among other eco-sustainability factors.
 
The goal is to curb carbon emissions of communications equipment, which is predicted to double to 4 percent of the total global emissions by 2020, given current technology and industry growth. 
 
Product-specific enhancements are one way to achieve increased energy efficiency, but Alcatel-Lucent believes that wider reaching programs and initiatives can have a profound impact on global carbon emissions, which is why it is working to drive smart technology as a lifestyle. Initiatives like smart grids, smart metering, smart homes, and smart highways, for instance - all of which have become part of the common vernacular in the communications industry - will all help create a more eco-sustainable and more efficient global landscape.
 
To supports its global eco-sustainability campaign, Alcatel-Lucent has recently launched its new Eco-sustainability Web site, which details its corporate mission to promote environmentally aware communications technology across the globe. 
 
In addition to a dedicated Eco-news page, detailing its recent work and announcement around green IT, the site includes sections dedicated to its three main areas of development:
 
  • Smart ICT: Highlights a focus on green communications technologies, such as video conferencing, location-based services, and vertical specific solutions, as well as smart grid, smart home, smart highway, and smart metering solutions.
  • Eco-innovation: Focuses on the ongoing R&D efforts at Alcatel-Lucent's research facilities.
  • Eco-sustainable Networks: Details Alcatel-Lucent's intelligent, environmentally efficient end-to-end network equipment and solutions, from alternative energy sources through the network architecture to the end user premises.
Alcatel-Lucent believes its development efforts can have a significant impact on the environmental impact of communications technology, but it further believes the same fundamentals that are being applied by the communications industry can be applied to other market segments as well, driving down the 98 percent of carbon emissions from non-communications technologies.
 
For more, visit Alcatel-Lucent's Eco-sustainability site.

Competition vs. Collaboration: Strategies for New Revenue Generation

Posted by: Erik Linask | November 16, 2009 11:34 PM | 0 Comments
The question of which approach - competition or collaboration - is best in a competitive business landscape is hardly new. The natural instinct is to lean towards competition. After all, collaborating with other industry players can expose your business. However, collaboration breeds innovation, especially in the communications space, where most technologies are based on accepted standards, so there is little risk to intellectual property - your competition is leveraging the same technology.
 
Gary Iosbaker, Principal Technologist in the Office of the CTO for Communications and Media Solutions at Hewlett-Packard, recently discussed this issue in his article in Alcatel-Lucent's online magazine Enriching Communications, noting that HP prides itself on its extensive industry partnerships. In fact, he claims that, because of the standards-based technologies driving the communications market, and the rapid rate of evolution today, it is imperative that businesses be willing to share their information and experiences for the benefit of the industry.
 
Because today's communications experience depends on a broad range of vendors - devices, clients, access, transport, support systems, and more - the only way to truly succeed and deliver a quality experience to the end user is to work through partnerships, "rather than wasting limited resources chasing the same goals," as Iosbaker says.
 
It's the old strength in numbers theory: "By pooling the rich complementary capabilities of a broad range of players, the collective expertise and experience benefits everyone," writes Iosbaker.
 
The idea is that working in tandem with other industry experts facilitates more rapid development of products that will be more widely available, more reliable, and more cost effective to develop. In addition, market acceptance is increased due to the collaborative nature of the product(s) - there is less hesitation resulting from the perception of single-vendor bias.
 
The same ideal of bringing more innovative revenue-generating products to market more quickly drives the Alcatel-Lucent initiated ng Connect program, which is designed to foster the very kind of collaboration between vendors Iosbaker promotes. In fact, according to Iosbaker, HP didn't hesitate to become an ng Connect member because, quite simply, it made good business sense.
 
"It's about truly transformational and innovative companies that are willing to collaborate and understand how they are going to use broadband technologies in a way that betters the user experience," said Derek Kuhn, Vice President of Emerging Technology and Media at Alcatel-Lucent, of ng Connect. 
 
Ultimately, with the growth of broadband communications and the pace of evolution of communications technology, it is impossible for any single vendor to keep pace alone - they simply lack the resources. Si, the logical alternative is to rely on mutually beneficial partnerships that help achieve existing goals, but are also likely to unveil new opportunities as well.

 
For more on how HP leverages its partnerships to drive its business success, read Iosbaker's article, along with several others in an entire issue of Enriching Communications dedicated to how collaboration is driving innovation in the communications market, enabling new, revenue-generating products to be introduced more efficiently and cost-effectively.

What is the impact of new IP applications on wireless networks?

Posted by: Erik Linask | November 16, 2009 10:34 PM | 0 Comments
Today's wireless networks hardly resemble those of only a year or two ago - of course, the applications delivered across them and the devices users use to access them are equally different. This new generation of data-intensive applications has created a surge in network usage, which has, naturally, placed increased strain on wireless networks due to an increased number of device connections. We also know that the number of bandwidth-intensive applications is only going to grow, as network operators and application developers learn how to collaborate more effectively. This will only increase the number of active sessions between devices and networks in any given time period.
 
Simply put, in order to send and receive data - to access applications, that is - devices must open active connections to wireless networks. In their "normal" state, when they are accessing on-board data or in not using mobile applications, devices typically do not maintain active connections; it's predominantly a question of battery life, which is among the key development issues with mobile devices, so they are designed to conserve power whenever possible.
 
So, between active sessions - the idle time after which a network shuts down a connection is determined by the operator, but ranges anywhere from 5 to 30 seconds, typically. But, because every active RF connection consumes network resources, whether spectrum, power, or processing resources, these active connections must be carefully monitored and managed by operators to avoid interference or congestion and, ultimately degradation of service.
 
While the signaling process - the activation of a connection between the device and network - with data applications is much like that of voice communications, the difference lies in the patterns with which devices connect to data applications and services. It's a simple scenario for voice calls - the connection is set up when the call is placed, remains active for the duration of the call, and is terminated when the call is ended.
 
Data transmissions, however, can act is several different ways, adding significant complexity to resource management and utilization. File transfers behave much the same way voice calls do, with continuous transmission until the transfer is complete. But, other applications, such as security or location-based services, can access the network at regular intervals, requiring set-up and tear-down of the connection each time. In addition, subscribers accessing Web pages or manually retrieving sports scores, for instance, create an inherently unpredictable pattern of access. Then there's also the equally unpredictable scenario where certain external events, like push email, or scores in football games that trigger text messages being sent to countless users at once every time a team scores so that users can follow not only their favorite teams, but their fantasy sports players as well. Both present equally unpredictable connectivity patterns.
 
The point is that, while some connections are predictable, most today are not, and the variations in user and application behavior can have a significant impact on radio access resources.
 
Depending on the specific applications and their automatic or manual refresh sequences, and the nework dormancy timer (the maximum time before a connection is automatically deactivated after non-usage), and, of course, download speeds, a recent Alcatel-Lucent white paper describers how different variations on a single application can result in significant differences in transmission loads and the number of signaling events in a one-hour actual RF airtime span.
 
This, of course, is in addition to the fundamental network bandwidth usage required by the variety of applications, from mobile email and location-based services to VPN access and P2P communications, to, of course, video, the biggest bandwidth-consuming application of all.
 
What it means is that network operators must be more diligent than ever in monitoring, managing, and effectively allocating network resources to ensure a consistent, acceptable level of service for all users. To understand how Alcatel-Lucent's 9900 Wireless Network Guardian (WNG) provides wireless network operators a management platform that combines traffic analysis, network performance monitoring, and behavioral anomaly detection, helping operators better understand how their users' behavior impacts their networks - and how to adapt accordingly - read the white paper, "Alcatel-Lucent 9900 Wireless Network Guardian - Powerful solution to classify wireless data traffic, understand wireless resource usage and improve network performance."

Leveraging Multi-industry Ecosystems to Speed Service Innovation

Posted by: Erik Linask | October 5, 2009 9:48 PM | 0 Comments
It's clear that, in order to achieve ongoing success, mobile operators must put in place a plan to evolve to all-IP networks in order to facilitate higher quality and reliability of service. That means either a combination of 3G and 4G technologies, or an all-out migration to 4G.
 

But, the network technologies they deploy are merely the beginning, and will serve only as a medium for delivering the services, content, and applications that will present the real opportunity for differentiation. Once operators have invested in and deployed their next generation networks, their key to success will lie in their ability to quickly and effectively introduce innovative new services to their subscribers - services that will be in high demand and for which users will be willing to pay a premium. In addition, the innovation must extend beyond the applications themselves, to an ability to integrate these new offerings across multiple networks, devices, and geographies.

 

Operators that invest in LTE technologies, for instance, will have spent billions, even tens of billions of dollars, by the time they have completed their full deployments. ABI Research predicts that Verizon Wireless, for example, will spend close to $30 billion on spectrum and infrastructure, and while LTE technology will present Verizon and other operators with significant reductions in operating costs, they will still need to find new revenue streams to support their business models to compete effectively.

 

As Nadine Manjaro, senior analyst, wireless infrastructure at ABI Research, writes in her article, Ecosystems Help Evolution to 4G Services in the latest issue of Alcatel-Lucent's online magazine, Enriching Communications, "Delivering new services quickly will require collaboration across an entire ecosystem. Operators are turning to vendor partners and members of the mobile value chain to assist in developing new services."

 

The idea of collaborating with other industry participants isn't a new one, and many operators have already successfully developed and launched services driven by such relationships, but there is potential - even a necessity - for more.

 

That's why Alcatel-Lucent, among others, which of course is a key player in the network infrastructure space, is also pushing the idea of developing ecosystems to help spur innovation, lower time to market, and increase the value proposition of new services and applications.

 

The idea is founded on the principle that networks can provide valuable resources that can be leveraged by an entire ecosystem to increase the value of new services and applications. Traditionally, however, most network operators have been hesitant to open their networks up to developers and content providers. However, in order to create deeper relationships, many are realizing that, properly controlled and secured, these resources can be an effective way to deliver more enticing services, since developers will have access to data that will help them more effectively personalize services and ensure their compatibility with networks and devices.

 

An Alcatel-Lucent white paper, Working with Third-Party Services: An Action Plan for Network Operators, identifies several network resources that can easily be leveraged to create compelling services that users will be willing to pay for. They include:

  • The ability to offer differential QoS;
  • Demographic and behavioral information on end users;
  • Information on subscriber devices, location and online status (presence);
  • Ability to authenticate, identify, charge and bill subscribers;
  • Exposure of call control and messaging platforms;
  • Ability to host and maintain services;
  • Ability to provide 1st line customer support.
 

By working with third parties to build wide-ranging, multi-industry ecosystems that include infrastructure vendors, device manufacturers, application developers, content providers, gaming and computing experts, universities, and others with relevant expertise, operators can discover best practices, new business models, and new revenue opportunities not possible on their own.

 

Alcatel-Lucent itself has launched the ng Connect program as a means of bringing together these very types of constituencies in a collaborative environment to develop new services that exploit their network assets to create compelling, sticky services and opportunities for subscriber retention and attraction.

 

"The ng Connect ecosystem has the power to create a nucleus to showcase what is actually possible when you connect all these devices in a real LTE environment that provides the bandwidth that is necessary to provide an enhanced user experience," said Volker Hirsch, EVP at ng Connect member Connect2Media.

Using Ecosystems to Drive New Revenue and Innovation

Posted by: Erik Linask | October 4, 2009 11:42 PM | 0 Comments
As service providers look to feed their subscribers' hunger for innovative services and applications, they have essentially two alternatives: they can work alone to develop them in what amounts to a proprietary environment or they can collaborate with other companies to develop more effective products and that can be leveraged to meet the needs of a wide audience.
 
In a next generation communications environment, it becomes almost impossible to achieve high levels of success with the former. The need to accommodate to accommodate different means of access and devices and to maintain viable financial models by making services adaptable to multiple user types means providers must facilitate interaction with other companies as they seek to develop and introduce new services.
 
It's this need for collaboration that drove Alcatel-Lucent to create the ng Connect program, a mechanism for partnering with other companies - not only in the communications space, but other industries as well - to create services that are flexible, interoperable with multiple technologies, and importantly, present a revenue generating opportunity.
 
According to Derek Kuhn, Vice President of Emerging Technology & Media at Alcatel-Lucent, ecosystems, like ng Connect, allow members to collectively define prospective user groups for services, and determine best practices for addressing the needs of those users.
 
In his article in the latest issue of Enriching Communications, Kuhn adds that in addition to providing an opportunity to define strategies for developing services, ecosystems create what he calls "living labs" to consider the capabilities of next generation networks to deliver these services and the new business models they enable.

 
"It's about truly transformational and innovative companies that are willing to collaborate and understand how they are going to use broadband technologies in a way that betters the user experience," noted Kuhn previously. "We can collaborate to benefit the operator community with time to market and time to revenue, and we can innovate and touch industries that traditionally telecom might not reach out to. That's what's drawn a lot of the partners to this program."
 
The ng Connect program is based on an understanding that the only limitation to innovation is the effectiveness of vendors and developers in delivering new products. By providing a venue where providers, developers, and even users can come together to share ideas and experiences, ng Connect helps increase the pace of innovation, benefitting the entire community, from developers to providers to users.
To read more about why ecosystems, like ng Connect, hold the key to service innovation in next generation communications environments, click here.

Using Multimedia Content Management Solutions to Drive New Revenue While Increasing QoE

Posted by: Erik Linask | October 4, 2009 10:46 PM | 0 Comments
In an age where applications and content are king, and the networks that deliver them play second fiddle, telecom provider, in order to effectively penetrate their target markets, must unsure they are able effectively manage that content. It's not enough to simply develop and introduce new services; they must be able to integrate these offerings across multiple platforms, networks, and devices to create a seamless, integrated, and personalized user experience.
 
The evolution of networks, content, applications, and devices, combined with user's understanding of the capabilities available to them and their new expectations that result from this enlightenment make it critical for providers to be able to leverage flexible service delivery and management infrastructures.
 
Alcatel-Lucent's 5920 Multimedia Content Manager (MCM) has been designed for this very purpose - to enable service providers to manage, market, sell, and deliver content and services to any device their subscribers choose to use. The MCM allows mobile, broadband, IPTV, and converged services providers to manage the delivery of their services - including applications, video, music, ringtones, news and updates, and other personalized content - based on unique subscriber preferences.
 
To facilitate the efficient delivery and management of content, the 5920 MCM includes the following features:
·         Service and Delivery Orchestrator - Gateway for coordinating access to and management of core functions, including marketing, rating, charging, digital rights management (DRM) and service delivery;
·         Content, Storefront Manager and Subscriber portals - Provides flexibility in managing multi-screen catalogs and storefronts and allow service providers to build custom Web portals;
·         Marketing and rating - Enables multi-screen subscriber segmentation and management functions and the creation of targeted campaign promotions based on subscriber activities, including the definition of multiple pricing options and discounts;
·         Delivery and DRM - Allows the integration of the latest delivery protocols for both download and push services and offers a complete DRM solution to secure premium content;
·         Mediator - Provides a service order activation-enabled distribution workflow that integrates the Alcatel-Lucent 5920 MCM with downstream systems.
 
By bringing these capabilities to service providers in a single platform, Alcatel-Lucent not only simplified the content distribution capabilities for its customers, but also ensures they are able to focus on growing revenues and increasing operational efficiencies. It also allows them to focus their energies on the kinds of content and application partnerships Alcatel-Lucent promotes through its ng Connect program, while ensuring high quality, reliable services.
 
If you read the latest edition of Alcatel-Lucent's online magazine, Enriching Communications, you saw a case study explaining how Israeli telcom Pelephone used the 5920 MCM to launch its new music service that includes more than 250,000 tracks and playlists - Israel's largest music catalog. Not only does the Alcatel-Lucent solution allow Pelephone to manage and deliver the content through a friendly interface, it allows it to synchronize multiple user devices, a real advantage in an age where many - if not most - users have a desire to access content on multiple fixed and mobile devices.
 
"For example, if you use a PC to download a "jogging music" playlist to your private content area, that playlist is automatically available on your mobile phone," according to Pelephone.  "You can listen while you jog -- without the need for local synchronization via wires or WiFi."
 
This is just one example, and providers like Pelephone are increasingly looking to introduce new, innovative, and more personalized services to grow their market presence and subscriber bases using Alcatel-Lucent technology.
 
To read more about how Alcatel-Lucent is helping the service provider community address growing market complexities on the Next Generation Communications community.
 
If you haven't read the Pelephone case study, check that out here.
 

Driving Innovation Through Multi-Industry Ecosystems

Posted by: Erik Linask | October 4, 2009 9:18 PM | 0 Comments
The second installment of Enriching Communications, Alcatel-Lucent's eZine highlighting many of the hottest topics in communications today, takes a look at how ecosystems and the business models they promote help businesses leverage a collaborative environment to enhance the opportunities for all members of the communities.
 
As editor-in-chief Ruth Killeen writes, "Why work alone when partnerships help mitigate risk in a highly competitive marketplace?"
 
Indeed, ecosystems provide an opportunity for businesses that would have had little cause to work together under traditional business models, to generate added value for the members of a growing number of ecosystems as well as their end users. Taking a deeper look at some of the trends and topics in the LTE market introduced in the previous issue, this iteration looks at how participation in ecosystems helps members create new value from their own products and solutions, while leveraging the expertise of other members.
 
While the ecosystem isn't necessarily a new concept, this is an ideal time to foster long-lasting relationships to help the community as a whole more quickly assess and respond to evolving trends and requirements. Essentially, these ecosystems are the foundation for business relationships between strategic, multidisciplinary companies from a variety of industries, providing an opportunity for them to collaboratively deliver new solutions.
 
Ecosystems increase the value of products and solutions from each partner by offering input and feedback from a variety of members who have distinctly unique perspectives on what users want, what they will buy, and how much they will use new services and products, adding a new measure of predictability into the value chain.
 
Real-world experiences often provide a powerful message regarding products and services. The same can be said for the successes driven by participating in collaborative ecosystems. Hewlett-Packard, for instance, continues to expand its partnerships because of the benefit it has seen from the openness and collaboration promoted by ecosystems. These partnerships, in fact, are a key part of its corporate culture.
 
With the rate of evolution in the communications market, it is more critical than ever for individual vendors to ensure the ability to move equally quickly. Few companies have the resources to successfully respond to changing customers requirements without risking financial stability, making pooling resources and experiences more than a reasonable option - it is becoming a necessity. This article illustrates the success Hewlett-Packard's has seen from membership in ecosystems like ng Connect.
 
Even as many wireless provides are still moving into the 3G world, wisdom dictates that their goal must be to evolve further, to 4G technology, to deliver services with greater quality and reliability. However, the secret is not in merely evolving their networks - they must have a keen focus on the applications and services they bring to their subscribers. They need compelling new services that can cross networks, devices, and geographies - and they must provide enough value so that subscribers will be willing to pay for them.
 
This article looks at how network operators can leverage ecosystems to quickly develop and deploy 4G services, including eliminating risk through interoperability testing in a standards-based environment. By working closely with their partners, operators will increase their ability to grow revenue and market share in an ultra-competitive mobile market.
 
Israeli telecom Pelephone indentified some time what is now common theory - content and applications will be the keys to successfully penetrating the mass market. As such, it knew it had to be able to design new and innovative services for flexible, scalable deployment and rapid launch.
 
By working closely with its ecosystem partners, it is now able to deploy new services in a fraction of the time it would otherwise take. It has also been able to expand and manage its content and application library through simple, intuitive, and appealing interfaces, resulting in what it calls a "stunning user experience," including location-based services, mobile Internet, and multimedia content.
 
A key part of Alcatel-Lucent's market strategy is its application enablement model, which combines next generation network technology with the ecosystem and partnership theory to create more effective business models and greater efficiency in bringing services to market.
 
Earlier this year, Alcatel-Lucent conducted a study to gain an understanding of how various members of the communications value chain might be able to better work together to combine network capabilities with the speed of the Web - a key part to its application enablement strategy.
 
This article provides answers to the questions it was looking to answer, and which will help network providers more effectively partner with content and application providers to create a highly collaborative environment that drives value for both sides and create a win/win/win situation for network providers, application and content developers, and end users.
 
 
In this issue, experts from Alcatel-Lucent, Hewlett-Packers, ABI Research, and Pelephone discuss the need for and benefits of technology ecosystems in a competitive landscape. The next issue will delve into to telecom operators can transform their businesses to create more effective, sustainable operational models.

How the Recession is Impacting Consumer Spending on Network-based Services

Posted by: Erik Linask | September 28, 2009 8:43 AM | 0 Comments
There is no question the economic downturn has had a significant impact on spending in both business and consumer markets. In the business market, the results have been well documented, with a marked decrease in spending, including staff cuts as well as an increased need to justify any new investments. For the communications market, this has created an opportunity to feature the cost saving features of IP-based technologies, in addition to their productivity enhancing capabilities.
 
Because its service provider customers are critically impacted by the needs and trends of consumers, Alcatel-Lucent sought to determine how the recession has impacted consumer spending, knowing that overall confidence has been at an all-time low for many of them and that spending patterns can change drastically with the economy. 
 
The good news, based on Alcatel-Lucent's research, is that, while two-thirds of consumers are cutting their overall spending, their first cutbacks are not related to their network services. In fact, only one of the top 11 cutbacks is communications related - downloading online pay per view movies is the fifth most frequently cited cutback. The remainder of the top 11 includes other ancillary entertainment and activities, like going to bars (1), concerts (2), sporting events (4), movies (6), and restaurants (7). Renting movies from physical shops came in third. Travel, charitable contributions, health club memberships, and non-essential shopping rounded out the top 11.
 
The lower half of the response table included many network and communications services, but their frequency was significantly lower than the top cost cutting measures. In fact, the three of the four least likely services to be cut include the basic communications services: broadband, landline phone, and cellular service (education also fell among these three at the bottom of the list).
 
What it means is there is an ongoing opportunity for network operators, whose services are viewed as a much more fundamental part of everyday life than other leisure activities. Indeed, broadband service can be considered recession-proof.
 
Interestingly, paid VoIP has a much higher likelihood of being cut, despite the overwhelming sentiment that broadband Internet is a must-have service. Clearly, providers have a significant opportunity here in developing the PSTN replacement market. But, this is also a reflection of comfort - consumers are used to their reliable traditional phone service and, in a challenging economy, tend to favor tried and tested products to new technologies.
 
On the other hand, free and low-cost services still present an opportunity - though they also present a challenge in subsidizing those services with other revenue streams, including advertising. Even with an improvement in economic conditions, Alcatel-Lucent says 13 percent of respondents still plan on making cuts, while 20 percent are likely to increase spending, leaving the majority at a level spend.
 
What does this mean for providers? Certainly, they will have to adapt their business strategies to account for consumer behavior. More than likely, they will see an increase in the use of free services, like IP-based voice and video services, an increase in messaging (email and IM) as opposed to traditional telephony, a rising interest in bundled services, and a greater acceptance of advertisement-driven services.
 
The latter presents a real opportunity for operators as they look to offset a reduction in the use of fee-based services. The creation of more bundled offerings also is an opportunity, because it creates stickiness and helps reduce churn, which is at least as important as singing new subscribers - and builds a relationship operators can leverage as the introduce new services. And of course, their ability to enhance the overall experience for the end user will only help increase subscriber loyalty.
 
For more on Alcatel-Lucent's research, read the full report, including tables and charts that show exactly how the consumer market is expected to behave as a result of the recession.
 

Speed Introduction of New Intelligent Applications and Time to Revenue

Posted by: Erik Linask | September 14, 2009 1:26 AM | 0 Comments
When you consider the work network operators are doing to build out their next generation communications infrastructures to be able to deliver new services and applications, and when you think about the evolution of end devices on which these new applications will run, the obvious question is, how can network operators keep up with the demand for applications to leverage these latest technologies.
 
Quite simply, the only way they can reasonably deliver new, innovative, intelligent applications quickly is to solidify relationships with third-party developers and content providers. Today's network operators have to focus on their delivery capabilities, and lack the resources to remain competitive if they also have to develop all the applications on their own. 
 
It's clear that network operators understand the need to work with third parties, as most applications already come from other sources, not from the operators themselves. In fact, other than expanding footprints in underserved markets, network operators are seeing relatively flat revenues from network access, due to market saturation. Thus, in order to increase revenues in a highly competitive environment, they need to explore new options for bringing compelling services to market, which they cannot accomplish on their own. The only new wireline service, for instance, that has found wide-scale market penetration is IPTV, compared to the number of new Web services developed by the developer community and other third parties.
 
It's a clear trend, and one that will continue to grow as more software platforms are leveraged to create environments to allow easy development and introduction of creative, and potentially revenue generating services. 
 
Highlighting this fact, a recent Alcatel-Lucent white paper discusses a survey of 132 service providers that were asked to identify the three most important factors that will contribute to the success of mainstream telcos. Two responses dominated their opinions: Rapid transition to all-IP networks and, topping all responses, more effective partnering and collaboration with third-party providers.
 
These two factors effectively comprise Alcatel-Lucent's application enablement strategy, a combination of building out intelligent, all-IP high leverage networks, and using the capabilities of those networks to develop deeper relationships and new business models with third-party providers.
 
By collaborating closely with third-party developers and content providers - and by allowing them greater access to network resources, including QoS capabilities, network-based storage, and key subscriber and device data - operators will not only create long-lasting relationships with these providers by increasing their networks' value to them, but will also allow intelligent, contextual applications and services to be more efficiently developed and rolled out, lowering all-important time to revenue.
 
Certainly, there are barriers that must be overcome - namely, despite a desire to work with third parties, network providers have traditionally not created a valuable enough value proposition that would drive these relationships to new levels. But, by enhancing their network capabilities and, more importantly, exhibiting trust in their partners by making these capabilities available to them, operators will have taken a significant step towards creating an meaningful ecosystem that will increase collaboration and entice developers to work more closely with the operators to quickly develop new revenue streams.
 
To understand more about how network operators can leverage their networks to solidify their third-party relationships and help speed the introduction of new intelligent applications, read the white paper, Working with Third Party Services: An Action Plan for Network Providers.
 
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