Post by Iqbal Zulkarnain on Jul 6, 2012 16:22:13 GMT 7
[glow=red,2,300]How to Prevent our Pipe from The Parasite ?[/glow]
Today, telco has found its transform way from traditional telco into internet based communication platform. Telco has offered the communication platform, service and content via smartphone, PC, tablet, Smart TV, etc. Every device equipped with smart application and service, they’re connected into content and application player, so called OTT player like google,amazon,facebook,twitter,youtube,etc. This phenomena will explode data traffic exponentially. Is the explosion of the traffic growth phenomena will be more benefit to OTT player or can be parasites to operators ?
Today’s Broadband Challenge
There are three main challenge for operator in broadband era; Customer experience, traffic growth and revenue. This challenges will impact to performance of telco operators. Operators are competing offer many internet package to customer. But they still give similar product and service to customer. No unique value proposition each other. Every operator offered similar tariff scheme in quota based and time based. Customers keep directed to enjoy low and lower tariff without seeing the quality given from the operators. Operators still used unlimited scheme to attract the customer of using the offered package. Second thing to the customer experience is about coverage and throughput. Operator always introduce newest technology like HSPA 21 Mbps, DC-HSPA 42 Mbps to customer. But the customers still feel same throughput between operators those have HSPA 21 Mbps and operators those still have 7.2 Mbps, no excess between this two things. Second challenge of broadband communication is traffic profile. Data traffic will be more inefficient accessed from 2G network. 2G handset penetration still dominant in the market today. It will impact traffic growth profile where 2G traffic still growth. Expand 2G network is not good solution for operator investment. The last challenge is about revenue. Revenue profile still like scissor, Traffic growing exponentially while revenue growing flat. Operator revenue can’t meet traffic growth due to current business model with OTT player and also data price war from operators.
Operators had done the price war for voice tariff in recent 3 years. After demand moved from voice to data, Operators still affected by the price war, thereby operators seems too early to enter data price war. From the rupiah that customer paid, the money is not going all to operator, instead of going to OTT player.
Operator doesn’t have control to device that customer used as well as content and application. No additional revenue from this area without bundling strategy.
The Future Trend
In Broadband era, many of electronic devices will be connected to internet (gaming devices, medical devices, automotive, home appliances, etc). Those enhanced devices will push more data traffic in the network. In line with content and service application (social media, video based application, etc) are experiencing significant growth. Today more than 48 hour video upload every minute on Youtube, more than 70M tweets per day on twitter, more than 8 registration per second on facebook, more than 1GB per second file downloaded from premium file hosting. These phenomena will drive significant data traffic growth on the network. There will be 92% data traffic growth from 2010 to 2015.
Growing mobile internet usage from traffic and subscriber will impact to the network. Demanding quality of experience will happened later. More video HD on youtube, interactive application on mobile should be fulfilled well from the network. Operator should put higher cost to fulfill customer expectation. Consequently will impact to operators revenue while OTT players no need to spend their investment like operators do. Operators operating revenue seems to be negative growth while OTT players operating revenue will take positive growth in the future.
Smartpipe Strategy
Operators need strategies to avoid their pipe to being dumb. operators have plenty of assets which allow them to maintain their revenue. The three strategy typologies which operators should explore in running optimal business to take them forward are as follows :
1. Differentiate Broadband Customer Experience
Operator should differentiate customer experience to make customer which uses service from operator different from another operators. To avoid operators pipe being dumb pipe, operator may implement policy control to control customers data flow. There were many ways to implement th policy control by dynamic tiers consumption, continuum tiers, traffic priority, etc. By policy control, operators may optimize their network capacity with additional income from tariff scheme. For customer, the will have better choice to use operator service according to customer requirement. Operators can examining new pricing models that better reflect actual network usage and guard profitability. Another way to differentiate customer experience by offloaded data traffic to WiFi. WiFi network have better throughput than 3G network. Customer experience will differentiate when they feel saturated in 3G network, offloaded by network automatically into WiFi. For operators, data offloaded will help network from being congest.
2. Develop Efficient Broadband Pipe
Data traffic growth is going significantly year by year. Recent technology seems not enough to accommodate data traffic. Operators need to increase capacity and coverage with the most efficient technology. Operators can increase spectrum efficiency in hotspot area by deploy additional carrier, high order modulation and MIMO technologies. Operators can used Pool concept to optimize network capacity. All IP architecture, infrastructure sharing, traffic migration and also new tariff scheme that better reflect actual network usage and guard profitability
3. New business Model
By partnering, rather than competing, with OTT players, operators can bring their own capabilities to content and applications development and stave off commoditization. Operators should begin to focus on identifying new revenue opportunities in areas such as energy, healthcare and publishing. An example is Deutsche Telekom, which is targeting €1bn (£850m) in sales from ‘intelligent networks’ by 2015. Operators could take a leading role in demonstrating the benefits of smart grids, e-healthcare and e-publishing, for instance, to their customers. Operators can make strategy for revenue share or content acquisition from 3rd party developer to create vertical application like M2M, automation system, telemathics, etc. in Advanced way operator can bring open API for developers. This way can speed up content creation for market. At least operator will choose suitable content and application for customer. Revenue share or acquisition with individual/small content developer or even big content developer by give them software development kit. By this way operator can get revenue through traffic and share of service revenue. Mobile advertising can made new revenue stream for operators. By used subscriber profiling and monitoring (location based, content & application, voice,messaging and data usage, customer loyalty & billing system), operator can used mobile advertising to get another income. Operator can offer cheaper rate or better quality to customer through mobile advertising.
Too many parasites in internet era for operators. This will significantly impacted to operators business continuity. OTT payer will be “gnawing worms” for operators pipe. Smartpipe strategy would help operators to counter the existential threats they face today, it concludes. If pursued in combination, the effect on operators’ long-term prospects could be magnified.
Author : Iqbal Zulkarnain
Today, telco has found its transform way from traditional telco into internet based communication platform. Telco has offered the communication platform, service and content via smartphone, PC, tablet, Smart TV, etc. Every device equipped with smart application and service, they’re connected into content and application player, so called OTT player like google,amazon,facebook,twitter,youtube,etc. This phenomena will explode data traffic exponentially. Is the explosion of the traffic growth phenomena will be more benefit to OTT player or can be parasites to operators ?
Today’s Broadband Challenge
There are three main challenge for operator in broadband era; Customer experience, traffic growth and revenue. This challenges will impact to performance of telco operators. Operators are competing offer many internet package to customer. But they still give similar product and service to customer. No unique value proposition each other. Every operator offered similar tariff scheme in quota based and time based. Customers keep directed to enjoy low and lower tariff without seeing the quality given from the operators. Operators still used unlimited scheme to attract the customer of using the offered package. Second thing to the customer experience is about coverage and throughput. Operator always introduce newest technology like HSPA 21 Mbps, DC-HSPA 42 Mbps to customer. But the customers still feel same throughput between operators those have HSPA 21 Mbps and operators those still have 7.2 Mbps, no excess between this two things. Second challenge of broadband communication is traffic profile. Data traffic will be more inefficient accessed from 2G network. 2G handset penetration still dominant in the market today. It will impact traffic growth profile where 2G traffic still growth. Expand 2G network is not good solution for operator investment. The last challenge is about revenue. Revenue profile still like scissor, Traffic growing exponentially while revenue growing flat. Operator revenue can’t meet traffic growth due to current business model with OTT player and also data price war from operators.
Operators had done the price war for voice tariff in recent 3 years. After demand moved from voice to data, Operators still affected by the price war, thereby operators seems too early to enter data price war. From the rupiah that customer paid, the money is not going all to operator, instead of going to OTT player.
Operator doesn’t have control to device that customer used as well as content and application. No additional revenue from this area without bundling strategy.
The Future Trend
In Broadband era, many of electronic devices will be connected to internet (gaming devices, medical devices, automotive, home appliances, etc). Those enhanced devices will push more data traffic in the network. In line with content and service application (social media, video based application, etc) are experiencing significant growth. Today more than 48 hour video upload every minute on Youtube, more than 70M tweets per day on twitter, more than 8 registration per second on facebook, more than 1GB per second file downloaded from premium file hosting. These phenomena will drive significant data traffic growth on the network. There will be 92% data traffic growth from 2010 to 2015.
Growing mobile internet usage from traffic and subscriber will impact to the network. Demanding quality of experience will happened later. More video HD on youtube, interactive application on mobile should be fulfilled well from the network. Operator should put higher cost to fulfill customer expectation. Consequently will impact to operators revenue while OTT players no need to spend their investment like operators do. Operators operating revenue seems to be negative growth while OTT players operating revenue will take positive growth in the future.
Smartpipe Strategy
Operators need strategies to avoid their pipe to being dumb. operators have plenty of assets which allow them to maintain their revenue. The three strategy typologies which operators should explore in running optimal business to take them forward are as follows :
1. Differentiate Broadband Customer Experience
Operator should differentiate customer experience to make customer which uses service from operator different from another operators. To avoid operators pipe being dumb pipe, operator may implement policy control to control customers data flow. There were many ways to implement th policy control by dynamic tiers consumption, continuum tiers, traffic priority, etc. By policy control, operators may optimize their network capacity with additional income from tariff scheme. For customer, the will have better choice to use operator service according to customer requirement. Operators can examining new pricing models that better reflect actual network usage and guard profitability. Another way to differentiate customer experience by offloaded data traffic to WiFi. WiFi network have better throughput than 3G network. Customer experience will differentiate when they feel saturated in 3G network, offloaded by network automatically into WiFi. For operators, data offloaded will help network from being congest.
2. Develop Efficient Broadband Pipe
Data traffic growth is going significantly year by year. Recent technology seems not enough to accommodate data traffic. Operators need to increase capacity and coverage with the most efficient technology. Operators can increase spectrum efficiency in hotspot area by deploy additional carrier, high order modulation and MIMO technologies. Operators can used Pool concept to optimize network capacity. All IP architecture, infrastructure sharing, traffic migration and also new tariff scheme that better reflect actual network usage and guard profitability
3. New business Model
By partnering, rather than competing, with OTT players, operators can bring their own capabilities to content and applications development and stave off commoditization. Operators should begin to focus on identifying new revenue opportunities in areas such as energy, healthcare and publishing. An example is Deutsche Telekom, which is targeting €1bn (£850m) in sales from ‘intelligent networks’ by 2015. Operators could take a leading role in demonstrating the benefits of smart grids, e-healthcare and e-publishing, for instance, to their customers. Operators can make strategy for revenue share or content acquisition from 3rd party developer to create vertical application like M2M, automation system, telemathics, etc. in Advanced way operator can bring open API for developers. This way can speed up content creation for market. At least operator will choose suitable content and application for customer. Revenue share or acquisition with individual/small content developer or even big content developer by give them software development kit. By this way operator can get revenue through traffic and share of service revenue. Mobile advertising can made new revenue stream for operators. By used subscriber profiling and monitoring (location based, content & application, voice,messaging and data usage, customer loyalty & billing system), operator can used mobile advertising to get another income. Operator can offer cheaper rate or better quality to customer through mobile advertising.
Too many parasites in internet era for operators. This will significantly impacted to operators business continuity. OTT payer will be “gnawing worms” for operators pipe. Smartpipe strategy would help operators to counter the existential threats they face today, it concludes. If pursued in combination, the effect on operators’ long-term prospects could be magnified.
Author : Iqbal Zulkarnain