Telco 2.0 'two-sided' business model - Intro
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Transcript of Telco 2.0 'two-sided' business model - Intro
‘Two-Sided’ Telecoms Markets The $375 billion growth opportunity
Simon Torrance, CEO, Telco 2.0TM Initiative20th January 2009
[email protected] www.telco2.net
Business Model Innovation for the Digital Economy
- 2 -© STL Limited • Proprietary and Confidential
Introduction – the Telco 2.0TM InitiativeTo help players in the Telecoms-Media-Technology sector grow through business model innovation.
A research-based approach to developing new business models through a blend of four activities:
Mission
Approach
Research Brainstorms ConsultingOperator
Club
- 3 -© STL Limited • Proprietary and Confidential
Telco 2.0 Research Agenda for 2009Issues and opportunities
Corporate Strategy & Industry Issues
• Industry issues & new business model concepts
Growth Opportunities:
• Retail Services: • Digital Kids/Generation Y – next gen consumers • Voice & Messaging 2.0 – next gen personal comms
• Wholesale Services: • Online Video Distribution – fixing broken value chain
• Enterprise VAS:• Advertising and Marketing services• Enterprise Services – Comms-enabled CRM• Transaction services – billing and payments
Moving forward
Enablers:
• Open API commercial model – an industry framework• Regulation & standards – for Telco 2.0 world
Infrastructure:• Telco 2.0 Reference Architecture – Exploiting
customer data and on-demand systems• Devices – Mobile, Consumer premises equipment
Implementation:• Operational Agility – Building the low cost
transactional platform
- 4 -© STL Limited • Proprietary and Confidential
What do telco execs really think today?
Source: Telco 2.0 Executive Brainstorm, 4-5 Nov 2008. Participant survey N = 250
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Telco 2.0 and the ‘two-sided’ business model
• $375 billion telco growth opportunity• New telco proposition: “Reducing friction in
the digital economy”
• OTT threat if telcos don’t embrace it
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Friction in the Digital Economy
Developers
Retailers
Government
Brand Advertisers
Content Owners
Telco – Retail
Providers UsersBarriers
Other Party, Authorisation & Security
Promoting Offer
Conducting transaction
Fulfilling Order
Billing & Payment
Service & Support
Millions of Customers
Thousands of Segments
Barriers
Identifying Other Party, Authorisation & Security
Promoting Offer
Conducting transaction
Fulfilling Order
Billing & Payment
Service & Support
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Telco assets: well suited to reducing friction
Developers
Retailers
Government
Brand Advertisers
Content Owners
Telco – Retail
Providers UsersBarriers
Identifying Other Party, Authorisation & Security
Promoting Offer
Conducting transaction
Fulfilling Order
Billing & Payment
Service & Support
Telco Capabilities & Assets
Millions of Customers
Thousands of Segments
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Telcos have a wealth of untapped data assets…
MY CREDIT
Bad debt Demographics
Average balance
MY PERSONAL DATA
MY STUFFMY IDENTIFIERS
MY INTERACTIONS
MY RELATIONSHIPS
MY CONTEXT
MY DEVICES
Name
Address Gender
ProfilePreferences
SIM SoftSIM
Serial NumberDevice details
Number SIP Number
IP Address
Location Presence
On/OffRoaming
Pictures Videos
CalendarAddress Book
Bank School
FriendsWorkplace
Browsing History
.mobi domains QR Codes
- 9 -© STL Limited • Proprietary and Confidential
…by contrast, Google has very few
Search Term URLs
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Google is a ‘two-sided’ business model master
Advertisers Audience
FREE!
Attracts audience that upstream players (advertisers) value
$$$
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Many successful two-sided market players
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The Telco 2.0 platform connects providers to users, creating a ‘two-sided’ market
$
‘Upstream’ Customers ‘Downstream’ Customers
Developers
Retailers
Government
Brand Advertisers
Content Owners
Telco – Retail
Millions of Customers
Thousands of Segments
Content Owners
Telco Platform$
- 13 -© STL Limited • Proprietary and Confidential
ConsumersRetail Platform $$
SMEs
Enterprises
Public Sector
1.Developers
Retailers
Government
Brand Owners
Content Owners
Telco (Retail)
$$Wholesale Platform
Upstream Customers
2.
B2B VAS Platform$$
2.
Downstream End Users
New Telco 2.0 revenue sources – from ‘two sides’ now
- 14 -© STL Limited • Proprietary and Confidential
Examples and Use Cases
See www.telco2.net/blog Or www.telco2.net/researchOr www.telco2.net/event
- 15 -© STL Limited • Proprietary and Confidential
Telco growth potential (Mature Markets) to 2017
$1,230bn
$689bn
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B2B VAS: seven buckets of value potential
Total Market: $125 Billion
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Only telcos have the breadth of capabilities
Identity, Authentication and Security Advertising, Marketing & Business Intelligence Content Distribution Billing and Payments ()1. (Voice-based) Customer Care
Note: The relative quality of solutions has not been considered.
Ability for players to offer specific B2B VAS platform capabilities
1. Via Google Checkout
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Next steps towards Telco 2.0
1. Pilots around Telco 2.0 (two-sided) business models
2. ‘Joined-up’ strategy and business case
3. Board-level support
4. Separate dedicated organisation for B2B VAS business
5. Expertise in two-sided business models and pricing strategies
6. Enhance downstream relationships
7. Build upstream capabilities
8. Establish a process for cross-operator collaboration
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Telco 2.0 strategies now seen by leading practitioners as very important to future profitability (comparison with current strategies)
Source: Telco 2.0 Executive Brainstorm, 4-5 Nov 2008. Participant survey N = 250
Very important
Not important
Telco 2.0 Strategies
Telco 1.0 Strategies
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Powerful Platform Performance Precedent
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Telco 2.0 and the ‘two-sided’ business model
• $375 billion telco growth opportunity• New telco proposition: “Reducing friction in
the digital economy”
• OTT threat if telcos don’t embrace it
Thank youMore at:
www.telco2.net [email protected]
Business Model Innovation for the Digital Economy