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Broadband and Content Businesses of Mobile Operator – Alternative Concept

TARGET


Idea is to reach some complex solution, which solves typical problems of Mobile Operators in present days. These problems are – too big and growing amount of the traffic in Packet Core, without increase in Profit (benefit for Internet players and content owners, but headache for operators), and almost no income in advertisement (compare to Google’s share, for example). Just joining into these two pieces of cake is looks like attractive enough, isn’t it?


By the way, there will be demonstrated, that this concept also can allow Operator to increase sells of devices and take share in WiFi business.



Intrigued? Then keep patience until you reach the Resume partition!


SOLUTION


First of all – how to reduce Packet traffic (GPRS, HSPA, LTE, EV-DO)? Most obvious – push people to use WiFi or Broadband line via PC/Laptop in cases, when traffic is heavy (download/update applications, load video and music).


How to do it technically? Obviously there should be some PC/Laptop application, but with some differences to existing sync systems (MS ActiveSync, Nokia Manager, iTunes and similar). This application should be:

  • Small. For example, just 1 Mb exe file. It (most probably should) works without installation, and/or stay resident when installed once.
  • Simple. Get list of downloads from Mobile Device, has few buttons like “select all”, install, cancel.
  • Mature (or Automated). Should be able to connect Mobile Device without configuring/tuning. It should be valid at least for standard connections like WiFi and Bluetooth.


So, there is nothing about synchronization of contacts, calendar and no tough to any private information at all. Then it’s quite logical to suppose public version of such application, which can be supplied in cafes, hotels, air-ports – in connection to public WiFi spots or Bluetooth towers/pillars.


Then there is a question – why subscribers should care about this? May be it’s still not obvious, but there can be a lot of benefits for subscribers, that they even do not think there is some operator's benefit. Do not believe? Will see then.

  • Speed. It’s typical that wireline access faster than wireless. Even if it’s not so for some exact place in the City, then increase of wireline capacity is cheaper than of wireless.
  • Price for the traffic. Even if there is some Unlimited 3G for iPhone, but we all know, that this is some artificial thing. Cost of wireline and wireless access is different to operator, then price should and would be different! Finally, I can say OK to your price for the exact tariff or to its limitations (daily 100Mb or monthly 5Gb), but as cost for wireline is less, then you can offer lower price or bigger amount of included traffic, when offering such Application.
  • Another step – price for the content. It will be cheaper via this Application! Why? First of all – you have less cost, so you can reduce price. It works, if there is your own Content Portal. What to do if it’s not? We go to next step!



How to catch up the Advertisement’s piece of cake? Like this - when content synchronization is on the way, small script in Mobile Device shows advertisement. Cases:

  • There are some copyright owners of content. They do not care about advertisement at all, and they just want to get fee for the content. Most simple case – content is in your own WEB-portal and you place advertisement in application, and earn whole amount. Alternatively, you give discount on the amount of advertisement and still have profit by reducing OPEX (expensive wireless network is not loaded). Sure, there can be mixed solution, when you attract subscribers with discount, and keep part of advertisement’s profit.
  • More complicated case – there is internet WEB-site which selling content and earn on advertisement, thus offering competitive pricing for the solution (i.e. price discounted by the price of advertisement, thus content can be offered cheaper, than competitive WEB-sites offering). Still there is not a problem! They showing their own advertisement on WEB page and we showing our own in Mobile Device. Then same story with discount on content, but savings in OPEX. Sure there should be some agreement with this popular WEB-site, that we pay them from our Advertisement Profit.
  • Another case, there is a Mobile Portal, which offering Local Application itself, and there is advertisement in it. But, as the exact Portal do not care, in fact, about the advertisement engine (provider) we offering them same business, but advertisement is ours. They still get advertisement fee and we deal with OPEX.


There is one important thing with Mobile Advertisement, which powered by big Mobile Operator – it’s extremely high precision as operator has abundant information about each owner of device. Thanks to regulations rules as these finally bring some profit, instead of continuous spends! ))) What this profit is? This profit is the obvious fact, that Operator’s advertisement is more expensive, than regular WEB! So, in most cases (with 3rd party WEB or Mobile Portals) we have profit in both – advertisement (pay them same as for WEB and rest is for us) and via cost reduction (save OPEX by limiting load of Wireless Network).


What to do with iTunes, OVI and similar portals? Forget about them, as these guys hurt your network with dramatically increased traffic, while all content and advertisement payments went to them only. You may do not want to forget them and even feel some kind of love and nostalgia? ))) - No problem! But now they have to work using your rules! They place advertisement which you supply or they pay fees to you, which you say to them to pay! It sounds sweet, isn’t it?


ENHANCEMENT and DEVELOPMENT


There are even more possibilities for business. The Operator’s exactly business, I mean!


§ First of all, let’s remember about FemtoCells! It’s the hot issue, a lot of marketing buzz, already. Then why we do not offer same solution for FemtoCells? Sure we offer! Whether it is a single device in home or some Femto-MVNO – we just have to be sure, that cost of connection/traffic here is less than in generic Wireless Network and that Mobile Device can be identified in FemtoCell area. Rest we took the same, as for WiFi or Bluetooth scenario, described above.


Then our business growth is – selling more FemtoCells (one more argument for users to by such a device), selling more FemtoCell’s services and finally offer new Converged services. One of this services you know already – our application, described above. If you are FMC operator with wireline business, then you have even more benefits of FemtoCells’ wide spread!

§ Another point – Cellular Operators have a chance to step into Free WiFi Spots’ Business! How? There is already not a big issue (in present days), that some caf? or hotel has free WiFi. Then it’s almost not work for the owner, as a competitive benefit! Sure they are ready to spend couple of hundreds dollars to attract reach and technically advanced clients – no doubts! No problems, we are ready to help them spend amount!



The case is that we sell ….Magic Sticker! This sticker tells not just – “Free WiFi”, but “Free Application’s Enabled WiFi”! So, Operator can offer connection to its own network and manage WiFi router’s traffic with our application (corporate one release, not the same, as for home use). Connection’s CAPEX is not really high, but as there kind of monopoly/oligopoly of few big operators in the region, then 100 USD monthly fee per one WiFi spot is quite small price for promoting caf?/hotel as Hi-Tech Users’ Enabled. In fact, it’s a matter of marketing and spread of the technology. I quite believe that first hundred of stickers in cities like Ney Yourk, Tokyo and Moscow – can be sold for 1000 USD or even 10000 USD each, depending on the abilities of your VP Sales&Marketing! )))


MARKETING


  • Sure, there should be strong marketing. People have to know that this is highly profitable for them. So, imagine cases for year(s), that you can demonstrate thousands of savings, for the exact subscriber. Use high profiles, make total amount for big family, use cases for your own high margin content and similar marketing tricks! You know, I sure! Then family buy FemtoCell or even two, as they considering, that they anyway saved money and these useful devises are like free stuff.

  • There is another opportunity to get plain discount from owners of heavy content like big applications or video. It’s obvious that part of people do not wants to purchase some heavy content/application, just because it takes too much time! So, using fast wireline download increase overall sells of such content and its owners have to agree on volume discount. For example, same 720p movies from iTunes or YouTube can be available for your subscribers in easy way, and a bit cheaper, while you do not waste expensive resources of Wireless Network on these Terabytes and save even more, than your Subscribers.


In other words – small amateur clips of 1-2 Mb and Solitaire style games are remaining in your HSPA network and do not hurt too much your OPEX and CAPEX. Movies (1-2 hours) and enhanced games (with 3D, video intro and stuff like that) are naturally shifted to WiFi/FemtoCell, as Subscribers themselves manage it for their own benefit. Is it not the statement, what all the Mobile Operators are dreaming now about?


RESUME


It’s a brief concept. Sure you can add and re-think some moments, for your exact network.


  • For example, you may develop the script (in Mobile Device), which showing several banners at one download, thus Subscriber must interact with this script, that download can continue. May be you contrary prefer Subscriber’s loyalty and do not want to be kind of Spam provider. Then, you just send advertisement to user’s e-mail (one per download via application) with a hope, that you have managed proper advertisement (using you precise knowledge of subscribers) and most people read it. Just because they are willing to watch such messages, as they really gain necessary info about discounts, special offers and goods they need.
  • May be you will find it valuable to join this application together with one specific content management system, described here - Drag&Drop – Telecom Business for IT companies. Or you contrary make most simple solution, only for your own Content Portal.


In conclusion, I just have to notice, that creating some eco-system like iTunes or OVI will add popularity for this concept. Anyway, it’s a good chance to establish your own Eco-System and stop be silent and patient to the situation when Google, YouTube, iTunes, OVI and similar guys make billions on your Subscribers and do not care at all about your traffic (OPEX) increase, spends on network expansion (CAPEX increase) and ARPU decrease, in general.



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Analytic Report about Possible Hurdles in the process of the Implementation. It's a correspondance from LinkedIn, about this article. Here is the information about - why Apps Developers prefering Apple's or Gooogle's AppStores, or plain WEB, instead of the interaction with Mobile Operators.

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