CSPs have a huge opportunity to create new complex products and solutions for the B2C market assembled with the help of partners. But this isn’t just a one-way opportunity. The flipside of this model is CSPs' ability to participate in value chains and ecosystems that are orchestrated by a partner.
These partners will be domain experts that utilize their own expertise and leverage existing relationships to create innovative B2C services enabled by an ecosystem that they orchestrate (including connectivity and other services provided by the CSP), with them taking responsibility for the end-customer relationship.
This model means the CSP is not responsible for the customer and doesn’t own the customer relationship, so why would it be appealing to CSPs?
CSPs are not experts in every vertical market or niche. With the exception of the large enterprise market – where CSPs create highly bespoke solutions at some considerable expense - they have approached many of their opportunities with a fairly broad brush, providing a relatively generic service and utilizing partnerships (eg MVNOs and resellers) to further tailor the offering. This approach was a pragmatic response resulting from factors such as:
- a lack of domain expertise
- a de-risking of the opportunity - CSPs preferred guaranteed wholesale revenues to uncertain B2C revenues
- a lack of agility and flexibility to address these opportunities directly and tailor the offering to them
- limited innovation capabilities (i.e. the ability to bring new products to market).
In the last ten years, this approach has not always worked in favor of CSPs, with much of the value created by their network investments flowing away to so-called OTT players, while they simultaneously saw their core service offerings commoditized. CSPs now have a pressing requirement to avoid commoditization and disintermediation, fuelling the need to address more opportunities directly and to add value beyond basic connectivity.
However, given the huge scale of opportunities that are emerging from the digital economy, CSPs will not be best placed to monetize all of them directly. Rather, CSPs need to prioritize and direct their resources towards those opportunities they perceive to be the most lucrative and where they have the highest chance of success. Elsewhere, they need to squeeze as much value as possible out of their network investments by partnering with domain experts to help them maximize their addressable opportunities and avoid value simply flowing away.
But this emerging B2B2C market will be highly competitive, and a CSP’s success depends on becoming a connectivity partner-of-choice and maximizing the value they derive from B2B2C partnerships.
Success in the B2B2C value chain
CSPs have not always been easy to do business with. They have been too slow, too monolithic and their core connectivity product hasn’t always been easy for their enterprise customers and partners to consume.
Steve Ranford Bragg, Principal Architect at BT, calls partner onboarding “a painful process that discourages companies from working with telcos.”
All of this is set to change, however. The advent of connectivity-as-a-service (CaaS)
and increased digitalization, will make products easier for business customers and partners to buy, use and pay for.
According to TM Forum research, 80% of CSPs see CaaS as an opportunity for growth, while one in five view it as a way of protecting revenue from commoditization. But CaaS is a complex undertaking. For it to function as CSPs need it to, not only does the industry have to deliver network-as-a-service
(NaaS), but this has to be combined with agile, flexible, automated and easy-to-use back-end systems that replace manual or semi-manual processes to radically simplify the way partners and enterprise customers buy connectivity and other telecoms products.
Historically, the buying experience for partners was slow and manually intensive, requiring salespeople to capture requirements, then configure and price a solution, which usually had to be checked by an expert team – with quotes alone taking weeks or even months and delaying the ability of the partner to use the product. In future, smarter partnering, packaged connectivity products, and increased digitalization will result in a more consumer-like experience for partners, whereby connectivity can be priced, ordered and configured from a digital portal, and thereafter rapidly and reliably provisioned.
But the opportunity for CSPs in this kind of model extends beyond CaaS to other valuable capabilities they can add into the mix to support their partners such as:
- billing, charging and micropayments: CSPs have offered these to their partners in a limited way in the past – for example, offering MVNE support to their MVNO partners – but in future they will be able to leverage their investments and expertise in this area more readily. For example, in developed markets, the ability to use the bill as a way of amalgamating small charges (straight-to-bill) adds convenience for the end customer as well as a very valuable service to partners. Taking payments reliably and in a fully compliant manner is not a trivial undertaking but something that CSPs have vast experience with. They also have the ability to give the end customer a choice of payment options (such as prepay, paynow or postpay) and to settle with partners with full transparency to both end customers and partners
- customer service: Many digital companies have little investment in customer service, which means that when the service is running well, they are delightful to do business with, but when things go wrong customers can be left frustrated and dissatisfied. It can be hard for small digital companies to address the increasingly sophisticated support needs of their customers, providing an opportunity for CSPs to leverage their considerable investments in 24x7 digital first line support and contact centers to add value to the partnership
- quality of service: CSPs are uniquely placed to define, manage and monitor service quality for their partners. When a partner’s entire business depends on a reliable network experience, the value of a quality network partner is paramount
- data and data insight: CSPs are able to leverage the data they have to help their partners tailor and personalize their services, innovate more effectively, and monitor their business performance.
Examples of this business model
IoT use cases
Here CSPs can connect the device to the network and collect the data (eg via fixed network, WiFi, RFID, 4G/5G, LTE-M or NB-IoT), which is sent to a platform for analysis and served up via an app. The partner(s) may provide the sensors, additional software, insurance and care to the solution. The orchestrator of such a solution might also turn to the CSP for know-how and consultancy, as well as an array of technical and support capabilities. For example, both Orange Business Services and Deutsche Telekom (via T-Systems) have market-leading expertise capabilities that they provide to IoT players as-a-service. An example of this type of tie up is C Security Systems, which specializes in both B2B and B2C use cases such as tracking boats, pets and livestock, recently partnering with Orange Business Services and the IoT Continuum initiative to accelerate the delivery of its LTE-M trackers in Europe.
This is an interesting example of a B2B service provider partnering with an enterprise in order to address both B2B and B2C IoT use cases. Carole Taillan Pruykemaker, Head of Connected Products at Orange Business Services noted that her company is well positioned to support multinational enterprises such as C Security Systems in their end-to-end IoT journeys.
“Releasing the maximum value from IoT means moving beyond just basic connectivity to deliver complete solutions with state-of-the-art integration, devices and data management, combined with the know-how to accelerate time-to-value,” said Taillan Pruykemaker.
In this scenario the CSP supports the provision of a range of digital services from the cloud and may include billing and charging capabilities to the partner.
The West Midlands 5G smart city initiative in the UK is led by the West Midlands Combined Authority and covers the cities of Birmingham, Coventry, Dudley, Sandwell, Solihull and Wolverhampton. The aim is to improve the operational efficiency of the area, to innovate new services for citizens, and to support local businesses (including SMEs).
One use case is around accessible transport. Working with Icomera, its subsidiaries, GoMedia and dg8, Transport for West Midlands (TfWM), West Midlands Metro (WMM), RNIB, NaviLens and UK cellular operator, Vodafone, the initiative sought to make it easier for visually impaired travellers on public transport. The solution provides timely and accurate information to passengers who need additional assistance when travelling on the UK public transport network, either in the station or on the vehicle. Passengers can simply hold up their smartphone, which recognizes any NaviLens BIDI codes, connects to GoMedia’s live cloud-based passenger information system and delivers the desired information.
John Worsfold, Innovation and Technology Implementation Manager at RNIB noted: “Technology has and continues to open up the world for people with sight loss, and this opportunity has the potential to increase access to relevant information whilst travelling for blind and partially sighted people”.
Here the CSP provides charging capabilities for a service provided to consumers. This could be something as simple as mobile payment for parking services. While this has been used for a number of years in certain markets, it’s been boosted by the COVID crisis as consumers rapidly moved away from cash payments. Centili works with 280 CSPs as well as global and national merchants to enable micropayments, user identification and direct carrier billing for leading brands. Its recent group-wide deal with Deutsche Telekom will see it enabling the carrier’s customers to pay for services such as parking or in-app features in games and social networks and charge them to their bills.
“Mobility and transportation, gaming, e-publishing, vouchers, video and music on demand are just some of the areas where the demand for carrier billing is increasing,” notes Lazar Pasajlic, Regional Manager Europe at Centili.
In order to become a great partner, CSPs need partner relationship management capabilities to vet partners, manage contracts, SLAs, terms & conditions and enable rapid partner onboarding. They have to create a more digital experience for their partners, which will require product simplification and a high level of process automation to deliver more self-service, such that partners can get quotes and order services more readily, have new services rapidly provisioned, and make changes to their services when they need to. CSP investments in monetization capabilities and omnichannel customer service will come into their own, as they can be used to support partner offers. Added value will be created by the ability to integrate data to provide a 360-degree view of end customers that delivers ‘one source of the truth’ and supports end-to-end visibility to partners for their own business process monitoring. Meanwhile data will also drive business insight for service providers themselves – revealing which partners are the most profitable, monitoring key performance indicators, and tracking performance throughout the partner lifecycle.
Key initiatives from the TM Forum set to help in this area include Open APIs
, the Digital Ecosystem Management Project
and the Open Digital Architecture