Paving the Way for a Next Generation Business Model for Carriers

Abstract:
Telcos today experience a tremendous hazard to their business models: Legacy switched voice and carrier-related data-services are being threatened by new application and service providers carrying on their business “over the top” of the ubiquitous open packet switched IP-transport platform, the Internet. Till recently, carriers used to be the only ones being able to offer telecommunication services like voice, because all services were tightly fixed to network structures; even more, transport and service were an integral whole and minute-based revenues used to be one stable cornerstone of their business. With the availability of the “Esperanto”-Internet as the open accessible transport platform and with the upcoming of all kinds of services on top of that platform, including voice like Skype, carriers are once cut back to their undisputed (IP-)access products. So they face the challenge, either to somehow rescue in part their minute revenues, which often make out more than half of all, or to find new revenue sources – or both. So, the first alternative is a direct strategy against over-the-top VoIP-providers (“pure play”). With an IMS service platform based on an NGN-network, a premium voice product, called VoNGN, can be offered. This can only save part of the voice business, however. Even more important for a future strategy is an enlarged product concept for all-embracing communication, presence, and multimedia services. At the end, the former carrier is going to have to turn into a broadband network operator (BNO) or even better into a digital service provider (DSP) with a fully-assorted digital life service portfolio and an outstanding customer service (over-the-top providers have nearly no customer service) reaching right up to an overall consumer support, including the customer’s digital environment even at home. So, it is key for a solid future for BNOs that they succeed in their strategy establishing a survivable next generation business model based on this all-inclusive value proposition and thereby sustaining the current ARPU at least in a larger part. This way, BNOs are able to match up to over-the-top players in their rush to dominate the service market, in order to avoid the fate of non innovative carriers being thrown back to mere bit pipe providers for access only. The reasons for and the vertices of such a new BNO’s and DSP’s strategy based on an integrated NGN and IMS carrier and service provider approach are elaborated in this paper.