Open Networks - Business Models09

New business Models for Digital Inclusion, February'09

New Business Models for Digital InclusionBenefits for extending the open Networks up to the last mileFebruary 2.009


guifi.net Evolution:From Community to Open Networks

2.0092.001 2.0052.003 2.0072.0022.001 2.004 2.006 2.008

Small wi-fi “communities”Small private networks

EU “Telecomm Package”

Spanish DGTel 2003Follow-up EU Directives

First inter-municipalities linksGurb/Vic/Sta. Eugènia de Berga

Provisioning applications“Comuns Sensefils” (Peer to peer agreements)Network information and components known to all

Established a Foundation toSupport the model

Premi Nacional de Telecomunicacions

Actively explaining the model to NRA and officials

100

6.000

2.000

500

nodes

<10

Selected as 3th wave EU Living Lab


eDivide vs eInclusion

● Fight eDivide does not necessarily means solve eInclusion

● eInclusion can be kept low due several reasons, not only because eDivide

– Classic ISP business model just focuses on ARPU, therefore generates a risk of exclusion

MIGHT BE INSUFFICIENT● Need for new models

Incl

usio

n

Exclusion

Divide


Public Sector

Classic Model● Funding traditional WISPs / ISPs

– Few players/limited business dissemination and competition

– Facilitates vendor & technology “lock-in”

– Flawed Business Model depending on Public subsidies, discourages service provision: Low effectiveness and not sustainable

– Static, centric & monopolistic, conflicts with other initiatives, in particular while using open spectrum

– Only to digital divide, misses digital inclusion

Single Operator

Franchiser

Dealer

CustomersFunding/Subsidies

Services

Fees

ImmigrationLow Incomers

Visitors/non residents

etc

Exclusion

Inclusion

Public SectorPublic Sector

Controlled Subcontracts


Public Sector

Old “Community” Model● Single Community/Cooperative Centric

– Sustainability: Dependent on volunteering, public funding, donations or fees

– Requires membership, but looks also to digital inclusion

– Critical Mass: Difficult to meet requirements to scale

– If no clear agreements, investment uncertainty: If successful, faces a risk of privatization

– Few players, small ecosystem

– Trends to technology “lock-in”

Community / Cooperative /

Association

MembersVolunteers

Funding/Subsidies

Connectivity Services

Fees/Donations

Non members

Exclusion

Inclusion


Open & Neutral Model● Single Community/Cooperative Centric

– Certainty: Based on clear peer to peer agreements open to everybody, participants retain ownership on their investments

– Symmetric & Dynamic: Many players in fair competition / same opportunities, stimulates new products and services. Complete and varied economic ecosystem, friendly to varied initiatives, territory & SMEs.

– Works both for digital divide and digital inclusion

– Complement: Build infrastructure available to others

– Able to scale / globalize

Open infrastructuresPubic Sector Enterprises

Individuals

Services

Content

Investments

ServicesContent

Investments

Servic

es

Conte

nt

Inve

stmen

ts


Compare...

Network type Economic benefits to

Business model basement

Stimulation for providing services

Fair competition?

Classic corporate telco/ISP

The telco itself and the subcontracted agents. Other are only customers.

Control over the network (fees, ads...). Maximize ARPU (how much a customer can pay for...)

Limited. Margin oriented, more margin as less services/costs

Trends to create dominants. Need for regulation

Public ISP Public Institution & the contracted. Others are only customers

N/A or subsidy oriented

No or only by what's required on the contract.

Limited or at the best, N/A

Open & Neutral All. Including individuals, professionals & SME.

Based on services, cost oriented

Complete, Service levels provided by the users themselves or service providers

ALWAYS


Challenges for Open Networks

● From “User” to “Participant”

– Enable everyone as capable for being not only a consumer or content provider, also become an infrastructure provider.

● Dissociate service provider from infrastructure ownership

● Keep the network open, understand openness requirements, not build more private networks

● Neutralize resistance

– Speculation pressure / Hypes / Corporate lobbies / acquired privileges / “Contamined” officials / Subsidy “culture”

● Keep growing, build success stories, technology shift to “homes with tails”

Open Networks - Business Models09

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