Transcript NGP Future phases

Enablers: Telcos as a platform
A two sided model?
Stephen Wood – Global Product Director
mBlox Ltd
[email protected]
May 25, 2011
© 2008 mBlox
mBlox – the world’s largest Mobile Transaction Network
A network connecting many Content/Service Providers to many Operators
The network for Enabling Services transactions worldwide
4 billion transactions worth $500m in 2010
We sell SMS and Premium SMS services. Delivery and ‘on carrier billing’.
© 2008 mBlox
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Enablers, telcos and content providers
- A possible future landscape discussion
Telcos have assets of great value to content providers
… we know content providers will pay for them, if truly valuable
… we know they could provide revenue for operators
… in a two sided model of retail and ‘wholesale’
BUT.. handset/OS providers may diminish the value of these assets
… by disintermediation of carriers; providing enablers directly
… however, can this be provided effectively to content providers?
… and does this model provide the ‘best hope’ for sustainable data
revenue?
© 2008 mBlox
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Separation of access and service
- A trend accelerated by IP services
Service
Terminal
Service
Terminal
Access
Access
Terminal
Service
Terminal
Customers want to buy service, not access. Visible in Mobile Content industry
When services were delivered inside the access network, the problem did not arise
Deregulation of voice services did not materially change this model
IP networks fully separate service and access - a new commercial challenge
‘Wholesale’ versus retail?
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What new business models will prevail?
Content
& service
Consumer
hardware
Access
Competing for the consumer, trading together
Will the mobile business model converge on the internet, or vice versa?
What are the other sources of revenue?
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Enabler Services in Mobile Content
The mobile operator as a 2-sided platform
Content
Service
Marketing
BSS
Content
OSS
Key
Enabler
Services
($€£)
Content services
Comms
Service
Marketing
Core comms
services
($€£)
BSS
Network
OSS
Consumer relationships based on core, vertically integrated services…
…create valuable enabler services to third parties
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Key enabler categories
Delivery enablers
• Text messaging is established and mature
• Sender-pays data is key
• Quality of service will be vital
Billing enablers
•
•
•
•
Premium and WAP billing are established and mature
Refunds and credits need to come faster
More advanced ‘on carrier’ billing
Credit and debit card payments….?
Handset Context – the next frontier
•
•
•
•
Location lookup?
Roaming detection
Radio link quality lookup
Terminal capabilities and status lookup
Subscriber Insight – eventually?
Identity management
• MSISDN or alias links device to person: identification and addressing
Handset enablers (possibly via the mobile cloud?)
• Some complement: accelerometer
• Some displace: GPS
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How Mobile Has Worked pre App Store
Content
& service
Content services
Enabling services
(billing, SMS,...)
Consumer
hardware
Access &
Phone Service
Comms
Phone service relationship gives mobile operators control also over access
Mobile operators sell enabling services to content providers
Mobile operators provide payment means for service providers and so…
…Customers pay for content
Disrupted by App Stores -> Handset and OS providers build direct consumer charging relationships
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Enabler Services in the Value Model
eg
Tax
Carrier Payment Enabler Services
Other
Net to CP
Carrier Delivery Enabler Services
Service Marketing
Content Rights
CP Net Income
Enabler services earn carriers ~25% of gross customer spend
Scaleable, high margin revenue source, driven by numerous CPs and
services
Standardized enabler services scale with the growth of content
services
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The Coming Fight Over Enablers

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


Billing
Handset control
Network visibility
Screen layout
Store placement
Content
& service
Brand & Application Stores
Consumer
hardware

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
Billing
Transmission
Network data
Subscriber insight
Access &
Phone Service
Enabling services will be important to erect barriers to customer churn….
…and also important sources of revenue
Competition for control over consumer buying decision
Different attitude of players: e.g. Apple v. Google
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Service providers require a mixture of enablers
Data, ‘Charge-to-bill’, Identity
Debit/Credit Card,
Paypal, App Store
Network Enablers
Payment Enablers
Location, Security, GUI
Handset Enablers
How will these get provided? Telcos, app stores, credit card services…?
Has much already been given away? Handset capability..?
How are they presented? Divergence a huge issue for content providers.
An ecosystem exists…
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Mobile Transaction Network – well placed to intermediate
Provide a sales and distribution channel to content providers
Provide focused service and support wrapper
Simplify for content providers (and Telcos)
Police and protect
Competition; better for all
© 2008 mBlox
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The Next Challenge for Mobile
Mobile broadband is the most significant
revenue driver for operators
Significant ARPU and low cost (no
interconnection)
Increasing traffic will cause congestion,
voice churn and heavy capex
Incremental
cost
per GB traffic
£3 - £100
How can operators tame this?
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The Impact of Video
Not just from
TV and HD-quality Video-on-Demand is coming
Extra revenue/audience for owners of premium
content libraries
A new broadcasting medium – but who pays?
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The Internet Faustian Pact
Content
& service
Free!
Consumer
hardware
Access &
Phone Service
££
Consumers’ favourite services - email, information, shopping - are provided free
Access providers are able to extract consumer value from these services, effectively
selling an infinite bundle of services
No commercial relationship need exist between service and access…
…as long as neither side breaks the unspoken deal
© 2008 mBlox
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Solving the Data Issue in Mobile
Buy
Buy “Toyland”
“Toyland”
for for
£3.00...
£4.00
Plus an extra data charge of up to £15 if your are on an old O2 tariff,
or £1 if you are a prepaid user on Vodafone or T-Mobile and have
not yet used up your cap, or no charge at all if you are a bundle
customer on any operator and have not yet exceeded your bundle
limit, or up to £25 if you have already exceeded your bundle,
including Orange Unlimited tariffs which are in fact limited
all inclusive
Content
& service
Data termination
charges for 5.2MB
at agreed rate
Consumer
hardware
Access &
Phone Service
…plus whatever
No
yourextra
tariffcharge
charges
for
data
for 5.2MB
Data-rich services presented a huge problem of cost and pricing transparency
Flat-rate data packages reach only a minority segment of the market
Solution is “Sender-Pays Data”, world-first innovation launched February 2009 in UK
Good approach for all
– Consumer wins - from total pricing transparency
– Content provider wins - from totally transparent pricing model with 100% market reach
– Operators win - from more content revenue and scaleable, value-priced revenue model for data
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Enablers, telcos and content providers
- What happens next?
Telcos have assets of great value to content providers
… will they provide them?
… will they be useful and can they be monetized?
… can the ecosystem make this consumable for content providers?
And/or
… will handset/OS providers diminish the value of telcos assets?
… by disintermediation of carriers; providing enablers directly?
And/or
… will Telcos embrace this model to aid the broadband business
model…?
© 2008 mBlox
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