Read more on this in our new report, Revenue Management: Essential for monetizing current and future services.
New services require a more inclusive approach that links demands from many customers with products from many suppliers. The goal is to move closer to the platform business models that have made webscale companies, such as Amazon and Google so successful.
By becoming some form of middleman – an introducer, a matching service, a distributor, a marketplace – communications service providers (CSPs) open the doors to revenue that is well beyond their direct reach.
However, creating a platform business is a major departure from all that CSPs know. It requires the ability to analyze and manipulate huge amounts of data, and will take time.
Indeed, as one European solutions architect explains, “In general, legacy BSS [business support systems]lack the flexibility and capabilities required to integrate third-party digital providers in a CSP’s business easily and with a valid time to market.”
Therefore, small steps that try out concepts are a valuable method in developing new service revenues.
For example, as a precursor to the platform business model, many CSPs are selling consumer IoT devices and charging for them through the customers’ existing payment methods. Operators need the option of bundling such services with their core telecoms propositions. Moving on from these, building a platform requires the CSP to:
- Support multiple charging models – pay-per-view, pay-per day, pay-per genre, pay-per device, etc.
- Improve knowledge about the customer so the CSP and its partners can target services more effectively
- Provide third parties with the ability to charge customers through the traditional CSP payment methods – the monthly bill and pre-pay account
- Create the ability to distribute the revenues gathered through the CSP bill and pre-pay account to all players in the value chain
Deutsche Telekom Qivicom – A case study in platform business development
Deutsche Telekom has made substantial headway towards a true platform structure for the smart home market with its Qivicom smart home platform. Qivicom is based on an open principle that means third-party app developers can add their applications to the platform and leverage as much or as little of the platform functionality as they choose.
They can charge the consumer directly if, for example, they are a utility with that capability. Or they can charge through the Deutsche Telekom bill should they not have such capabilities – if they are an equipment vendor, for example.
Deutsche Telekom can also partner more closely with app developers if it wants to sell the service to its customers directly. Interestingly, the company is now white-labeling the platform to other CSPs and other service providers in the smart home sector, creating a third possible revenue stream from the same partnerships.
Creating more than one revenue stream from the same partnerships is important if CSPs are to grow revenue.