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Telecom Clouds and Internet of Things

The growth of wireless Telecom is no longer Customer Acquisition – it is a dead paradigm. As CTIA aptly puts the numbers here , unless one operator cannibalizes the other then they can grow. How can operators build a sustainable business model? They would need to differentiate by engaging themselves with the customer more and more – be available to them whenever and wherever, have great portfolios of devices, services and wireless modes. We are doing many things todaythat seemed impossible just a few years ago.

 

 

How do we do that?

Several different ways – there are clear trends and paths that need to be explored and engaged by the MNOs. Are they doing it? Clearly they are but is the industry looking to benefit out it. Obviously to a layman it is not visible but the Industry has taken a winding road that has lead to the one of the most vibrant parts of the US economy. If we look at just look the top 10 trends put out by CTIA below it shows why we are where we are today.

U.S. WIRELESS INDUSTRY: ECONOMIC IMPACT

1. Wireless broadband investment will create as many as 205,000 jobs by 2015.

2. For every $1 invested in wireless broadband, it will create an additional $7-10 for GDP.

3. Consumers spend >$63 billion/year in the world on wireless accessories (cases, batteries, memory cards, hands-free kits, headsets, etc).

4. Mobile entertainment content and services (games, music, social media, etc) revenue projected to increase from $33.2 billion in 2010 to $38.4 billion in 2011.

5. Businesses spent more than $1.9 billion in 2010 on non-handsets (e.g. tablets, notebooks, e-readers); by 2014, it will be more than $5 billion on non-handsets.

 
6. Wireless economic contributions have grown faster (16%) than the rest of the economy (3%).

7. The wireless industry directly/indirectly employs >2.4 million Americans.

8. Since CTIA started tracking in 1985, the cumulative industry investment has totaled more than $310 billion, not including more than $40 billion in payments to the U.S. Treasury for spectrum.

9. Estimates of productivity gains from wireless broadband services are >$860 billion from 2005-2016.

10. U.S. has the highest minutes of use (MOUs) per month per user and the lowest average revenue per minute of service of the 26 OECD countries tracked by Bank of America Merrill Lynch.

 You may read more about it here.

The biggest dark horse sitting around that MNOs need to be aware of work towards it the Cloud computing paradigm – bringing mobile cloud service technology content – such as music, photos, videos and documents – online which can then be downloaded or streamed to mobile devices and tablets via mobile broadband or Wi-Fi. A recent comment by Bernhard Scholl, VP for radio network systems at Deutsche Telekom, highlighted the need for ubiquitous mobile broadband coverage to enable the adoption of cloud-based services. Growth in connected services “will only happen if all these services are everywhere available,” he said. And that is the truth that needs to be addressed today in tow major ways – Plugging the Deadzones and providing Capacity.

3G networks don’t have infinite capacity. If everyone started to use mobile cloud services today, no-one would get a satisfactory user experience as the networks wouldn’t be able to cope with the amount of data it would generate. And currently it’s the content providers that make money from these mobile cloud services and not the operators. What’s going to motivate mobile operators to upgrade their networks, if they’re merely helping other organizations attract more users and make more money?

In order for mobile broadband networks to support mobile cloud services, operators need to have some kind of incentive to work with content providers. A potential option could be a revenue sharing model in which operators get a slice of income from the services they provide access to. This could fund network upgrades while operators would be motivated by the additional income or even Network sharing models.

Another option could be to develop technology which allows mobile cloud services to work when not connected to the internet. A technology that allows mobile devices to download and store a certain amount of content ahead of what is being streamed, meaning it could be accessed when the internet connection is interrupted, could be the way to achieve that.

Whatever the approaches that end up being used, the key point is that in order to support the growth of mobile cloud services, operators have to be on board. If cloud service providers fail to work with operators and provide them with motivation to invest and innovate, there is little hope of the huge growth in mobile cloud services taking place.

All opnions expressed here are for educational purposes, and have no representation of any operators or vendor.

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