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Junho 2009               Índice Geral do BLOCO

O conteúdo do BLOCO tem forte vinculação com os debates nos Grupos de Discussão  Celld-group e WirelessBR. Participe!


02/06/09

• Msg de José Smolka: "O processo de normatização dificulta a evolução dos modelos de negócio em telecom?"

----- Original Message -----
From: J. R. Smolka
To: wirelessbr@yahoogrupos.com.br
Sent: Tuesday, June 02, 2009 5:25 PM
Subject: [wireless.br] O processo de normatização dificulta a evolução dos modelos de negócio em telecom?

Oi pessoal,

Segue abaixo mais uma transcrição do blog Telco 2.0. Enjoy the reading! :o)
J. R. Smolka

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[29/05/09]   Mobile Standards Processes: Inhibiting business model innovation?

(This is a modified version of an article first published by Dean Bubley, an Associate of the Telco 2.0 Initiative, on his Disruptive Wireless blog)

An important area for Telco 2.0 strategists to consider is the way that technical standards are created in the communications industry, and the direct and indirect impact this has on future business models.

Either by deliberate intent by “traditionalists”, or accidental inertia, standards often tend to entrench Telco 1.0 thinking and processes. Going forward, it will be important to influence the way standards (and requirements) are developed, in order to ensure that business model innovation is not “frozen” out of future technlogical deployments.

Attendance at the recent LTE Summit in Amsterdam stimulated this article, as various presentations and offline discussions highlighted the way that standards bodies operate (notably 3GPP). Various examples showed risks that could delay ecosystem development, entrenching legacy business models for operators and others.

This is not necessarily intentional, as many standards groups are staffed by engineering-type people, who often try to avoid the whole issue of commercial models. This is either because they have limited understanding of that side of the industry, or limited time - or perhaps are worried about regulatory and anti-trust implications. Having said that, there is also a huge amount of politics involved as well, ultimately driven by commercial concerns.

Often, this is exacerbated by vendor-centric vested interests, looking to promote in-house specialisms and protect future revenue streams, rather than operator-based concerns. Where they are operator-based, they tend to reflect “old-school” views from legacy silo business units, rather than the newer “2.0” thinking which is evolving in corporate strategy departments.

The problems arise because certain aspects of technical architecture can act as limiting factors in a market context. Physical SIM cards, for example, need to be distributed physically. Which means that a customer has to go in person to a store, or receive them via the post. So what seems like a basic technology-led decision can actually mitigate against particular business models - for instance, ad-hoc usage of mobile networks - by adding the “latency” of hours or days to the process of sign-up for the customer. In this example, there is also an implicit requirement for the distribution of the SIMs, as well as associated production and management costs.

Alternatively, dependencies between otherwise separate sub-systems can cause huge brittleness overall. LTE is being optimised for use with IMS-based core networks and applications. But not all operators want to deploy IMS, even if (in theory) they want LTE - again, restricting business model choices or forcing them towards what is now a non-optimised radio technology. It seems as though 3GPP is trying to use a popular technology (LTE) as a means to crowbar an unpopular one (IMS) into broader adoption.

A specific knock-on impact of this has been the very slow definition of a voice and SMS service for LTE mobile networks - the IMS-based standard called MMtel has been criticised for three years and has achieved almost zero market traction. This now threatens to delay overall deployment of LTE networks - which ironically may mean that vendor politicking and intransigence in the standards processes will ultimately prove counter-productive. It has already drawn pragmatists to work on a non-standard voice-over-LTE technology called VoLGA.

A parallel set of issues can be seen in the insistence of many mobile operators to view only each other as peers, working within the GSMA club and through various of its standards initiatives like IPX. This reinforces the notion that alternative communications service providers like Skype or Facebook are not peers, but instead deadly enemies, pilloried as “over the top players”. For some operators that competitive stance may be valid, but for others they might be critical partners or even (whisper it) in a dominant role, for which the MNO is a junior part of the ecosystem.

Freezing old-fashioned assumptions into standards and architectures, often without even identifying that those assumptions exist is a recipe for disaster. Numerous other standards processes we’ve reviewed recently also seem to perpetuate 1.0 models - essentially next-gen walled gardens.

This isn’t to say that standards are bad - but just that there is often no mechanism by which seemingly-sensible technology decisions are double-checked against potential future business models. Having a cycle in which people ask questions such as “Will this work with prepay?” or “What’s the wholesale model?” or “What happens if three people want to share one ‘account’” and so forth, would avoid many of these mistakes. You can never account for all eventualities, but you can certainly test for flexbility against quite a range.

The Telco 2.0 Initiative would be delighted to offer a free ‘future-proofing audit’ of any standards activity, to help prove our point.

Back to the recent LTE summit, it was notable that there was not a single mention of the word “MVNO” during the whole event. Nobody has thought what an LTE-based MVNO might look like - or whether there might be cool features which could enable such a provider to offer more valuable services - and generate more revenue for the host MNO. One panel of luminaries returned blank stares when asked about implementing open APIs on the radio network, to make it “programmable” for developers or partners. It seems likely that there won’t be latency-optimised virtual mobile networks for gaming, any time soon.

Many speakers appeared to view the only mobile broadband business models as traditional contract and prepay mechanisms - there was no talk of sponsored or third-party paid access. No consideration of the importance of Telco 2.0 strategies. No discussion about where in the 4G architecture a content delivery network might interface, and so on.

One option for fixing this problem is via the other industry bodies that don’t set standards themselves, but which can consider use cases and business models a bit more deeply - NGMN, OMTP, Femto Forum and so forth. Many of these groups are pragmatic and much broader in vision than the purely technical standards groups.

Perhaps this is the level to bring in these commercial considerations, so that they can then “suggest” specifications for the standards bodies to work to. They could ask questions like “does this architecture make MVNOs easier or more difficult to create and run?” or “what could be done to the standard to enable richer wholesale propositions?”

So maybe documents which say things like “Future mobile networks MUST be able to support a variety of MVNOs of example types A, B and C” could force the standards groups to refocus their efforts.

In any case, the Telco 2.0 Initiative believes that the future success of business model innovation could be gated by well-meaning but inflexible standards. Strategists and C-level executives must ensure that their organisation’s participants in standards bodies are aligned in thinking with an holistic, 2.0 view - and not just trying to protect historic silos against the forces of change.


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