A lot of the attention has been around how CSPs can monetise their networks effectively in order to develop sustainably profitable businesses. Here, at Management World 2012 in Dublin, that’s as much on the agenda as ever but there are intriguing glimpses of how attitudes are changing to encompass other ways of paying for bandwidth consumption than simply making users pay more for their megabits.
Throttling bandwidth usage is obstructive to the user experience and detrimental to CSPs’ opportunity to generate profits. However, we are now entering a phase of the market’s development in which that throttling also has the potential to damage the performance of other businesses.
I have heard examples of organisations such as YouTube being potentially interested in subsidising consumption of its video. It could, for instance, pay for its users to engage a ‘turbo’ button to increase their bandwidth to download a high definition video on the move with guaranteed quality. YouTube, of course, makes the money back – and more – through the advertising revenue it derives.
Another scenario put forward by Ericsson – and its newly acquired Telcordia – would see companies such as travel services provider Expedia looking to subsidise roaming for its customers. An Expedia customer would be offered a cheap or free roaming deal and Expedia would offer further services, knowing that the user is in a particular location and receptive to relevant cross-sell and up-sell offers.
“People like Expedia might be willing to pay for consumption,” explained Martin Sundblad, director of portfolio management at Ericsson. “They know they lose the opportunity to support [their customers if they switch off roaming].”
That opportunity could involve selling of services such as travel insurance, restaurant bookings, entertainment tickets and a raft of other travel and location-specific propositions. “We can do it,” said Sunblad’s colleague Peter Briscoe. “It’s not technically difficult.”
Critically, both believe there are a large number of willing partners keen to participate in this revived type of communications value chain. It’s a psychological leap for CSPs but it could be just the step needed to create the sustainable telecoms business of the future.
