Two sides to a business model

In a world of IP-based convergence, new business models are needed to open up essential new revenue streams. The Telco 2.0™ initiative advocates a two-sided business model with third party businesses on one side and consumers on the other.

Business transformation has been on the radar screens of operators for some time. The pressure for change is relentless and rising as consumers and businesses demand more from the converging world of communications.

"The old telco business model has been very powerful, perfectly packaging access, services, support and payment. But people want more now," says Simon Torrance, CEO of STL Partners, a UK-based consulting, research and special event services company which runs the Telco 2.0„¢ Initiative. "We believe that a new two-sided business model is needed. Rather than trying to squeeze more revenue out of subscribers directly, the new way focuses on growing revenues by building capabilities that support third parties, for example Internet application developers and advertisers, wishing to interact with the operator's user base. Instead of trying to find customers to fit their core products of voice, messaging and data, operators can do the opposite and hunt for propositions to fit their customer base."

Uniting businesses and customers

Labelled 'Telco 2.0„¢', this new model entails operators supporting the interactions between people and organizations. It requires changes to their business, as well as new business-to-business value-added services, to enable third parties to package up minutes, messages and megabytes with their own products.

Torrance likens the new way to a shopping center. "A center has to attract both shops and shoppers. By placing the right type of each together, it increases the number of buyers and sellers, and through shared resources like car parks, lowers costs to both. eBay is a good online example."

Subscriber data is key

All revenue a operator can collect from third parties is derived from its unique relationship with its customers and the detailed data it can offer to third-party companies, enabling them to target their offering more precisely to the various user segments.

However, one of the biggest hurdles to adopting the Telco 2.0„¢ model is the fragmented nature of the subscriber data that most operators hold. A solution such as Nokia Siemens Networks Subscriber Data Management which provides an integrated, real-time view of a operator's customers is essential in enabling the operator to partner up with other enterprises to generate new sources of revenue. Such benefits come in addition to the faster time to market and operational efficiency gains brought about by unifying all subscriber data into a single database that can be accessed through open interfaces by any application.

As well as holding out the promise of a rich new vein of revenue for operators, Telco 2.0„¢ can enrich the customer experience by delivering services from a wide variety of companies, all matched to the vast array of customer needs.

Telco 2.0™ Operator Club launched To develop its ideas further and help the industry solve the challenges of adopting the Telco 2.0™ model, the company is launching an ‘Operators Club’ to help the industry collaborate on realizing Telco 2.0™ growth opportunities. This is complementary to its Telco 2.0™ research and brainstorm services – www.telco2.net