December 19, 2017

Internet Of Things For Telecom Business

IoT is not in itself an engine of the telecom business unless this technology is developed. In other words, if within the framework of the IoT the communication operators will provide only communication channels for the final services, then the profit will be able to earn from it only in the short term. The fact is that the cost of communication services for IoT will fall steadily as the number of devices will grow.

This is the repeated pattern of all new technological innovations and developments. As a consequence, this will require a serious investment in infrastructure at the same time as competition will also grow. And here you have confirmation: recently in the market there began to appear niche telecom operators, focused exclusively on M2M / IoT services.

However, IoT can also become an excellent springboard, allowing a transformation in the business for operators of these services. This will require the participants of the market to build an ecosystem, within which it is possible to create and jointly partner to launch new services for consumers. It may require more vertical integration of related services and technologies. Without the introduction of new technologies, this can not be done. And in this direction, operators are taking the first steps.

New Directions And Typical Services For Telecom Business

Most operators worldwide increasingly pay attention to the service of providing content. For example, subscribers can buy through the operator antiviruses, make payments for purchases through the App Store and iTunes Store, subscribe to Microsoft Office applications and other similar services.In the future, this channel will be more in demand due to the expansion of the range of services provided.

Operators, in order to search for additional profits, “taste test” different types of business. And if, for example, with the development of the Internet of things, which directly depends on the standard business of the telecoms operator, everything is more or less clear, then here is a completely atypical example – the issue for subscribers of bank cards that are tied to their mobile account. The bank card from the operator is no different from the usual, with its help you can also pay for purchases, transfer, withdraw cash and it allows for cashback, etc.

Participants in the telecommunications market make their first attempts to enter the financial sector, which for them has never been the main one. What is the benefit to the operator? Attracting the attention of subscribers to a new banking service and receiving additional revenue from providing atypical, but demanded services, increasing customer loyalty. At the same time, the operator does not need to have a banking license – it is possible to do it through a partner bank.

By the way, while communication operators are introducing payment services, the banking sector is developing the MVNO (mobile virtual network operator) technology. The trend towards expanding the boundaries of business is also visible on the part of decision makers. For example, the company Cisco, whose main specialization is network technologies for data transmission, is now actively developing a portfolio of new software products: such as PAYPAL, IoT-services, etc.

It is noteworthy that in terms of the number of operating virtual mobile operators (MVNO, mobile virtual network operator), Europe occupies a leading position in the world of about 600 MVNO, or 59% of the world index, without taking into account the “second” brands of mobile operators (J’son & Partners data Consulting). Germany, the UK, the Netherlands, France and Spain account for almost 2/3 of all independent MVNOs. Such popularity is associated with the desire of national regulators to increase competition and reduce retail prices for mobile communications. Most often, virtual operators do not have a branched network of offices or even no offices at all, service is carried out on the site, and SIM cards are provided by mail or courier. Savings on leases and minimal costs for maintenance of data network equipment allow virtual operators to provide lower tariffs.

Applying New Business Models

Operators need to build both a technology and a financial ecosystem of partnership. The launch of new services always takes a long time for a large company. The operator should strive to be more dynamic in order to respond quickly to market needs and reduce the time of their launch. The main trends are the development of business models for revenue sharing and co-branding. No matter how strong the telecom market player is, the operator can not provide financing for the development of a huge number of services.

It is much more convenient to offer ready-made services and earn on it, sharing revenue with the developer-owner and integrator, which will ensure seamless integration into the infrastructure. To do this, the operator needs to restructure on the model of the storefront, following the example of Apple Store or Google Play. For example, according to the revenue sharing model, we work with telecom operators in the framework of providing basic services – notifying the subscriber about a missed call. Judging by the trend, this will be actively used in the future.

The logical model for the operation of cellular operators in the future will be “outsourcing for outsourcers.” Ideally, there are one or two basic operators in the region that own the physical infrastructure. They will receive the basic income from providing it for rent. Plus there will be a pool of MVNO-operators, exclusively launching and selling services to subscribers. In other words, large operators will be able to earn on infrastructure, as the cost of ownership will be shared among MVNO operators, which in turn will not build radio networks, purchase channels, purchase large quantities of equipment, but focus on the formation of new methods of offering services to subscribers. In the future, when a sufficient number of virtual communication operators appear on the market, it will be possible to create a global cloud infrastructure that will minimize the timeframe for launching new services to the market.

Telecom-market continues to develop into other areas of business, offering more and more new services, demanded by subscribers. Due to technological progress, the cost of their own will decrease and thanks to the development of the partner ecosystem, new services will appear, while subscribers are eager and ready to switch to a new model of relations with operators.

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