Two-sided Telecoms Business Models
Is there $250bn in new Two-Sided Business models?
Simon Torrance, Founder, Telco 2.0TM Initiative
[email protected]www.telco2.net
Introduction to the Telco 2.0TM Initiative www.telco2.net
The Telco 2.0TM Initiative generates new ideas for growth for network operators and their partners
facing new forms of competition. Our view is that
Operators should focus on their core competence as distributors of valuable bits and bytes.
They should fully utilise their distinctive assets (which today are under-exploited) to support both upstream
customers and downstream end-users
Operators should not be dumb pipes, wannabe media companies, or end-user service innovators.
Rather, they should offer 'logistics services for data to help content owners, advertisers, etailers, brands, and software developers reach end users effectively.
They add value to the digital economy by ensuring data is delivered to the right place, at the right
time, in the right way, and enable different parties to get paid in appropriate ways.
To do this they make use of multiple delivery systems (eg. internet, mobile, broadcast, network
caching, physical media) some of which they own, some of which they dont.
They operate a two-sided business model, getting paid by upstream partners as well as
downstream end-users
New analysis suggests they have the opportunity to generate over $250bn per annum in new
revenue in 10 years time, in mature markets alone.
This short document introduces the concept based on the results of intensive new research.
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3 Core messages
1.Future Growth for Telcos: Reliant on New
Business Model
2.The Two-Sided Platform Play Could be Worth
$250 bn+
3.Needs Collaborative Approach + Investment
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Lets define core Telco
Packaging
Systems Integrator
Products
(partners)
Products
(own)
Telco
Packets &
Platters
Plumbing
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Utility (pipes and cell towers)
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Today: a one-sided business model
Suppliers =
Costs
Telco
Content, Apps,
Devices
Products
(partners)
Network &
Termination
Products
(own)
Interconnect &
Storage
End Users =
Revenue
Consumers
Packets &
Platters
SMEs
Enterprises
Multi-Nationals
Is this model sustainable?
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Our Survey* said: Pressure on core Voice & Data Services
% of Total Mobile Voice Minutes, Europe
Broadband Data (fixed/mobile ISP product)
Other
3-5 years after
market saturation
Private Voice
Apps &
Handsets
Enhanced
Carrier Voice
Costs
Revenue
Traditional
Telephony
2007
2012
2017
Time
* Telco 2.0 Business Model Survey, Sept 07. 800 Respondents. See: www.telco2.net/blog
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Our Survey said: Can we really be a media company?
IPTV
Open Content
Delivery System
* Telco 2.0 Business Model Survey, Sept 07. 800 Respondents. See: www.telco2.net/blog
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Our Survey* said: New Business Models needed
20%
25%
55%
ISP
Triple or
quad play
OK
New
business
model
OK
* Telco 2.0 Business Model Survey, Sept 07. 800 Respondents. See: www.telco2.net/blog
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Wouldnt it be nice if
Upstream Players
Telco
End-Users
telcos could reduce friction in the digital economy
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Telcos: many valuable but latent assets (user data most important)
MY RELATIONSHIPS
MY PERSONAL DATA
Knowledge of
personal and
business interactions
Core customer data
Name, Address,
Gender, National ID,
Profile & Preferences
My bank, school,
workplace, friends
MY INTERACTIONS
MY DEVICES
User ID linked to
physical device or
token; configuration
Naming and tracking
non-human resources
.mobi domains, web
browsing history,
QR codes read
SIM, USIM, SoftSIM, serial
number, profile & settings
MY STUFF
MY IDENTIFIERS
Identity and persona
creation for user
Number, address or ID
provisioning; porting; avatars
MY CONTEXT
User real-time activity
and environment
Location, Motion,
Temperature, On/Off,
Roaming, In-call
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Digital Lifestyle
Aggregators & PIM
Pictures, Videos, Bookmarks,
History, Files ; Calendar,
Address Book, To Do, Notes
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Telcos: Opportunity to create a 2-sided platform-based business model
Customers:
Revenue Side 2
Customers:
Revenue Side 1
Developers
Retailers
Government
Brand
Advertisers
B2B VAS
Telco
Platform
Distribution
Millions of
Customers
Thousands of
Segments
Content Owners
Telco Retail
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Richer wholesale aggregation will be a key enabler
Customers:
Revenue Side 1
Customers:
Revenue Side 2
Developers
Government
Brand
Advertisers
Channel Partners
Retailers
B2B VAS
Telco
Platform
Distribution
Millions of
Customers
Thousands of
Segments
Content Owners
Telco Retail
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New Value Proposition: Logistics Services for Data
1. Distribution (multi-modal)
Broadband
+ Voice & Messaging
+ Broadcast
+ Content delivery networks
+ Edge caching
for data
2. B2B Value Added Svcs
Advert Insertion
+ Identity & Authentication
+ DRM
+ Payments
+ Content controls
+ Vertical solutions
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Potential New Market* of $250bn +? (Mature Markets alone)
* Telco 2.0 Future Broadband Business Models Report, Jan 2008. See: www.telco2.net
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New Revenues (1): New Wholesale and New Distribution Platform
Re-mix telco assets with apps, content, and devices to enable valuebased pricing, increased usage and higher margins.
Voice
Skype minutes vs.
Ordinary minutes
Video
Content delivery
networks for 3rd
parties
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Data
Postage and
packing included!
for data
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New Revenues (2): New B2B VAS Platform
Upstream
Telco Assets to
support:
Downstream
Developers
Retailers
Identifying Other Party
Authorisation & Security
Government
Promoting Offer
Brand
Advertisers
Conducting transaction
Content Owners
Telco Retail
Fulfilling Order
Millions of
Customers
Thousands of
Segments
Billing & Payment
Service & Support
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New research and major event interrogate this $250bn+ opportunity
Research: www.telco2.net
Event: www.telco2.net/event/april2008
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Two-sided Telecoms Business Models
More on this topic:
www.telco2.net/blog
[email protected]
