“The likes of Facebook and Whatsapp are eroding traditional revenue streams and CSPs therefore need to prioritize, looking at alternative streams instead of relying on traditional revenue streams which offer legacy services like voice and SMS.”
OTT players like Whatsapp are definitely a threat to CSP revenue streams and are clearly causing erosion in many markets. The OTT organisations have a few advantages that their business models take advantage of, namely speed to market and (relatively) low capital expenditure (ie they don’t have to build or maintain cross-city or cross-continent infrastructure).
The CSPs have to find new business models to take advantage of their own relative strengths to counter the OTT threat. Two models that appear to have merit are bandwidth prioritisation (via customer-centric QoS) and big data, both of which are ably supported by OSS technologies.
Unfortunately CSPs such as Verizon are being taken to task over an obligation of net neutrality and big data raises questions about privacy given that the end-user’s data would be being used by the CSP for less-than-altruistic means. Pimping of personal details and/or pushing the wares of other companies using location-based marketing isn’t going to engender trust or ongoing relationships in most cases.
Clearly, both of these approaches would seem to have conflicts with the key advantages of most CSPs, namely a relative trust that their customers have in their privacy mechanisms and the long-standing relationships with massive subscriber bases. As such, neither represents a long term business model advantage.
Mobile payments, machine2machine (M2M) communications and cloud services via mobile are other models that could work for the CSPs, at least whilst they maintain exclusivity through spectrum monopolies (ie until community Wi-Fi technologies usurp that dominance). Content exclusivity is another sustainable model (if the exclusivity can be maintained).
A further alternative is to climb up the value chain from provisioning of basic communications services. To build on the trust and long-standing relationships, CSPs can look at how to take their managed service offerings to the level of being highly trusted and reliable partners. The bureaucracy of many big CSPs combined with their cumbersome B/OSS are potentially holding the CSPs back from the speedy delivery and innovation required to reach this level.
Perhaps B/OSS are more hindrance than help for some CSPs to build sustainable business models for the future?Read the Passionate About OSS Blog for more or Subscribe to the Passionate About OSS Blog by Email