How to monetise the mobile cloud – the Telco / CSP strategy

clouds_lights_multicolor_vanilla_sky_skyscapes_desktop_1600x1200_hd-wallpaper-969606How to monetise the mobile cloud – the Telco / CSP strategy

For mobile communication service providers (CSPs), revenue from voice service continues to decline as a percentage of overall revenue, while global mobile data use continues its inexorable rise. Indeed, industry analyst firm Informa Telecoms & Media has predicted that revenues from mobile data will have grown from $210bn in 2009 to more than $450bn by 2015.

Cloud offers a unique opportunity to service providers that want to offer value added services like voice, video and collaboration on cloud platforms, but success will come only with simplicity and a recognition that the economics of the cloud are very different than traditional telco models. In essence, recognition that cloud models have utilization patterns like airlines, which means they are capital intensive, meaning supply and demand differentiation will be critical to maximizing yields.

Most mobile cloud applications will be sophisticated — mash-ups of all sorts, including applications that incorporate core mobile phone and Telco capabilities, like location, presence,phone calendar, address book, and cameras.In addition to the services accessed by “traditional” means such as via mobile handsets or web browsers, there is huge potential for machine-to-machine (M2M) services availing of Mobile Cloud Computing.

As mobile operators contemplate their mobile cloud strategy, it is critical that they reinforce one of the key value propositions that truly separates them from OTT players, ie the relationship with the consumer. Consumers will gravitate towards simple, trusted providers and solutions so if mobile operators could offer competitive cloud-based services that were integrated in the devices and the billing, plus add the reliability of the network, they will come.

Carriers already dominate the communications (and to some extent the personal media distribution) value chains. Energy and government service provision are certainly important areas to study, but in most cases Business IT seems a good place to start due to the general trend of SMEs moving to opex oriented models for software, systems and services.

By leveraging their network assets, operators add value by exploiting user attributes such as profiles and activities, making cloud services relevant and meaningful to users and providing the linkage between the upstream and downstream components of multi-sided business models.

Mobile Cloud Computing enables these payments to be made through customers’ phone accounts . Furthermore plug-ins can take advantage of NaaS features. One of the most valuable services, that can enfranchise many thousands of new ASPs, is the ‘Bill on Behalf-of’ (BoBo) ability for them to be paid through their customers’ phone accounts. Comprehensive payments and settlement and the associated business infrastructure, is a critical component of Mobile Cloud Computing.

For telecom operators offering enterprise cloud services, target segments can be based on enterprise size for horizontal applications, such as unified communications (UC) and enterprise resource planning (ERP), or it can be vertical market-based for industry-specific applications such as meter data management for utilities companies. We can expect industry-specific cloud services to benefit from the rise of M2M communications, and vice-versa, and there are already cloud offerings purposely built for airlines, healthcare providers and financial institutions.

The requirements for implementing Mobile Cloud Computing are three pronged :

a. Developer friendly standardised interfaces

b. Appropriate carrier grade platforms and architecture, which support both the highly technical communication infrastructure and secure and auditable payments, settlement and charging infrastructure

c. Cross network service providers to establish the necessary business relationships with operators and with each other (for inter-region access). The GSMA’s OneAPI commercial pilot in Canada is paving the way for this.

The global mobile industry’s main trade body, the GSM Association (GSMA), has recognized the need for (mobile) telecom operators to treat their assets as marketable resources and to offer APIs to third parties, i.e. to embrace the Network As a Service model.

According to Gartner, the single biggest revenue opportunity for CSPs is as a Cloud Service Brokerage. This concept is beyond product bundles, it is creating an aggregation and integration of ICT solutions from a single source. The cloud application marketplace is loaded with solutions, creating confusion and challenges for the cloud service providers and consumers alike.

Becoming a cloud service brokerage, and bundling those services with their existing traditional telecom services has many advantages. One of the main benefits is service velocity, as XaaS services (Software-as-a-Service, Infrastructure-as-a-Service, etc.) can be on-boarded for pricing, fulfillment and billing in weeks, as opposed to the typical months-to-years timeframe. In addition, the costs to implement the services are dramatically reduced as well.

by Sadiq Malik ( Telco Strategist )

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