Session IVMobile Connectivity Platforms
“A User Centric Always Best Connected
Service Business Model for MVNOs” Anwesh Adhikari
(Waterford Institute of Technology, Ireland)Miguel Ponce de Leon
(Waterford Institute of Technology, Ireland)
N°2
Summary of the Paper
• Current state of MVNO model.• Opportunity for MVNOs in IP-based
communication services.• Introduces a new MVNO as a Broker (MVNOB)
model.• Analyses the characteristics of the conceptual
MVNOB model.
N°3
Motivation
• Limited usefulness of technology-push factor in the diffusion and adoption of new technology and services [2].- Calls for market-pull business models.
• Growing popularity of flexible and agile business models (Eg. SaaS, PaaS).
• Service Provider Model is seen as the best framework to promote innovation in the mobile communications market [6].
N°4
Limitations of Current MVNO Model
• Current MVNO model is based on the concept of reselling [9].
• MNOs can set the network lease prices high enough to increase the barriers to entry for MVNOs [10].- Long term viability of MVNO is unclear from the existing telecom industry structure [15].
• Promotes cost leadership over service differentiation.- Higher customer churn rate and lower profit margins.
N°5
IP-based Application Services
• Formerly distinct industry sectors like telecom and content industries are converging over IP.
- Provides better differentiation possibilities for focussed virtual operators [10].
• Industry structure has an impact on service usage [18].
• Vertical network applications can be integrated into one IP-based convergent network for both fixed and wireless communication services [19].
N°6
The Missing Perspective
• User-centric view.- Users contend for a network connection instead of operator networks contending to satisfy the users service.
• SAHARA model [48] considers the service composition across multiple providers.- MVNO and MNO agreements are static and agreed long in advance making user dynamic inefficient.
• Perimeter project [49] - Development of services independent and portable of the underlying access and transport network.
N°7
Value Chain to Value Network
• Vertical integration of the telecom industry will be unable to satisfy the new range of VAS [15].- More collaborative business models based on core competencies are likely to emerge [19] [22] [26].
• Next generation mobile services will leverage robust access platforms [15], with the emergence of a dedicated service composer [26] [28].- MVNOs are in a better position to deliver innovative VAS as more tightly integrated partners with MNOs [30].
N°8
MVNOB Business Model
N°9
Actors and their Roles
• MVNE- Role: Technical outsourcing partner to the MVNO.
• Possible candidates: Existing MVNEs, System Integrators, Equipment vendors, Internet Services Companies, and MNOs.
• MVNO - Role: Customer facing.
• Possible best candidate: Grocery and General Merchandising Retailer.
• MVNOB = Service Composer + Retailer
N°10
Market-pull Factors
• Cost of delivering mobile data is likely to exceed incremental revenues and become unsustainable for the mobile operators by 2013.
Chetan Sharma Consulting [43]
• Customer life-cycle management is hard to implement in pre-paid mobile services, 3/4th of the global mobile customers are pre-paid ones.
McKinsey [44]
• Flat-rate-based business model is likely to commoditise MNOs as bit pipe carriers. [43] [45]
N°11
Revenue Model
• Reduces cost by adopting a common standard (IP).• Promotes successful resource sharing as the actors are
business-wise decoupled.• Encourages service differentiation through real-time
open negotiation for services and network access.- This will become especially prevalent with the deployment of IMS.
• Capable of supporting various billing plans, and generating a single bill for the customer of all the services consumed from multiple-MNO.- eg. pay-per use/view/time
• Possible Long Tail Effects.
N°12
Adoption Prospects [50]
• Relative Advantage- Economic benefit of service bundling.
- Micro-segment customer offerings.
• Compatibility - Orchestration of the services from different MNO platform for customer-specific delivery is probable over the Internet Protocol.
- Major issue could be non-technical due to the likely resistance from the MNO to give away control over the service delivery.
N°13
Adoption Prospects
Complexity- Shifts product life-cycle management from an off-line to a real-time process.
Trialability- Will mainly depend on service attributes, personalisation, and the management of personal identifiable information within the ecosystem.
Observability- Social activities like sharing and recommendation by the users are likely to have a major influence on the subscription of the services.
N°14
Conclusions
• The suggested MVNOB model:
- Changes the telecom industry structure by introducing a service composer between the MNO and the customer.
- Envisage dynamic formation and dissolution of user-network relationships of short time-scales.
- Promotes a unique service by making available the various services from multiple-MNO under a single umbrella.
• MVNOs need to rethink their strategy and consider positioning themselves as a broker of services in a multiple-MNO ecosystem, with MVNE as their technical partner.
N°15
Thank You for Listening!
N°16
References
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[6] C. Cuvelliez, ”Study of Implementation Models of Mobile Virtual Network Operator (MVNO)”, PhD Thesis, Univ. Libre de Bruxelles, Univ. DEurope, Belgium, 2006.
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[18] A. Kiiski, ”Mobile Data Service Industry Structure: Walled Garden vs. Horizontal Integration”, Research Report of Networking Laboratory, Helsinki University of Technology, 2003.
[19] P.T Chen and J.Z Cheng,”Unlocking the promise of mobile value-added services by applying new collaborative business models”, Technological Forecasting and Social Change, vol. 77, Issue 4, pp. 678-693, May 2010.
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N°17
References
[28] T. Kohlborn, A. Korthaus,C. Riedl, H. Krcmar, ”Service aggregators in business networks”, Enterprise Distributed Object Computing Conference Workshops, EDOCW 2009, 13th, pp. 195-202, 1-4 Sept. 2009.
[30] S. Ulset, ”Mobile virtual network operators: a strategic transaction cost analysis of preliminary experiences”, Telecommunications Policy, vol. 26, Issues 9-10, pp. 537-549, October-November 2002.
[43] Bridgewater Systems, ”Whitepaper: Towards a Profitable Mobile Data Business Model”, Available: http://www.bridgewatersystems.com/Assets/Downloads/Whitepapers/Bridgewater_Towards_a_Profitable_Mobile_Data_Business_Model.pdf [28 July 2010].
[44] A. Levisse, N. Manuel and M. Sjolund, Getting more from prepaid mobile services, The McKinsey Quarterly, 2008. Available: https://www.mckinseyquarterly.com/Telecommunications/Getting_more_from_prepaid_mobile_services_2108 [28 July 2010].
[45] A. Banerjee, Insight on Service Provider Innovation: A Global Study of Services, Emerging Business Models and Marketing Evolution. Yankee Group, 2008, Available: http://www.openet.com/company/newsevents/press-releases?id=113 [28 July 2010].
[48] B. Raman et al., ”SAHARA Model for Service Composition Across Multiple Providers”, Lecture Notes in Computer Science, Pervasive Computing, vol. 2414/2002, pp. 585-597, 2002.
[49] F. Cleary, M. Fiedler, L. Ridel, and A. Cihat Toker, ”PERIMETER: Privacy-Preserving Contract-less, User Centric, Seamless Roaming for Always Best Connected Future Internet”, Wireless World Research Forum (WWRF), Meeting 22, 5-7 May, 2009.