By Andreas Lemke, Applications Marketing, Alcatel-Lucent

We live in a time of tremendous disruption in the digital economy. Applications are moving into the cloud while smart phones and tablets are multiplying. Everything is becoming social including: shopping, customer service, search, gaming, learning, work-life in the enterprise, reading, traveling, and dating, even politics through social media campaigns and voter participation.

Communication service providers (CSPs) can benefit from these disruptions. They are selling rapidly growing numbers of smartphones and mobile broadband services that propel the social media phenomena, yet commoditization looms and network load demands high infrastructure investments. Forward looking CSPs, therefore, have recognized the need to actively participate in the digital economy on top of these networks. Opportunities abound as books, news, and shopping and other media and business processes are relentlessly being transformed into digital form.

The currency of this economy is knowledge of the consumer; and social enabled services are a key way of earning it. Smart service providers use this knowledge not only to better target commercial messages. CSPs can also help businesses improve the customer service experience.

How do service providers strengthen their position in the application and content value chain?

First, CSPs make their telephony and messaging services into a social currency machine. Every day, we communicate with many different people such as our dentist or our tax officer. When we interact with these people we wish to benefit from a communication style similar to that of a social network but many of us would not feel comfortable with having these persons as friends in a social network. CSPs are starting to offer a rich selection of communication modes that are more personal and trusted, virtually creating a private ad hoc social network for each communication exchange.

Second, more and more CSPs are engaging in content distribution such as application and e-book stores. To be successful in this business, CSPs need best-in-class marketing tools based on social capabilities. Users love to tag, rate, and comment on the media they consume or purchase. Social capabilities exert great power over consumer behavior. According to Nielsen, recommendations from people known as well as consumer opinions posted online are the most trusted forms of advertising. For CSPs, this data can be analyzed for marketing and promotion optimization.

Third, CSPs establish themselves as business-to-consumer enablers, for example, with messaging based marketing services. CSPs can further optimize these services with demographic and dynamic context information about consumers in addition to communication behavior. For example, they can group customers according to the frequency of communication and social activities, amount of data traffic consumed, and this can be done preserving consumer privacy. CSPs can also help businesses optimize customer care interactions through secure user identification and selection of high value customers.

The disruptions in the digital economy are happening now. Forward looking CSPs take advantage of these opportunities – not by duplicating existing social networks – but by evolving their own unique approaches based on social communication, content distribution, and optimization of business-to-consumer interactions; and this can be done with new cloud based solutions reducing time-to-market and business risk in an unprecedented way.

To learn more about strategies that CSPs can use to enter the application and content value chain, click there. Social media services also offer CSPs a number of other revenue channels, which are discussed in Alcatel-Lucent’s latest white paper, “Is there a Role for Communication Service Providers in Social Media?”