For all the talk of curved cell phones, wearable tech, and android cars at CES this week, most telco consumers around the world are still driven by price. Prepaid subscribers in growth markets remain highly price sensitive, and many carry a SIM card for each service they require, from different service providers, in order to minimise the cost of communications. Competition is ferocious, and data usage for the mass market remains a luxury – internet cafés remain massively popular across the developing world.
Today we buy data from our communications service provider in subscriptions or bundles. For example we can subscribe for 10 GB per month, in some countries we can choose to buy 1GB for $5 pre-paid, and in other models it’s unlimited. Unlike voice minutes, data is expensive to provide, and so service providers are constantly looking for models to minimise their exposure while not undermining the experience of the consumer. One question being asked now is what if you could share your data? What would that do to consumption patterns, and the user experience?
A lot has been said about Big Data in telco. But working through 2013, one of the things that began to gather momentum was the concept of what we call Social Data, something that has proved technically challenging in the past, but is beginning to find its time. A number of communications service providers are now experimenting with different models, but essentially the premise is that a data bundle can be bought – say 1GB for $2 – and then distributed and shared amongst friends, colleagues, or even micro customers. Two college students might buy a 10GB pack between them instead of individual packs; people who normally buy 2GB a week might now buy 10GB for the month.
We have 100MB here, 50MB there and before long we have a whole economy beginning to emerge. Distributors today in growth markets (and Social Data is far from being an exclusively growth market phenomenon) sell direct – you can buy a data pack from a street vendor and then consume it – and the distributor makes a margin. With Social Data, the vendor themselves can acquire the data – perhaps in very large quantities – and sell it on at their own price. Anyone, in fact, can become a vendor, a distributor. The more they buy, the cheaper the cost, and the higher the ultimate margins. The exchange currency can be determined by the vendor themselves – dollars, local currency, eggs. Gifting, loaning, hoarding data can all begin to happen.
Think about developers – today, you can buy and download an Amazon kindle book in most developed areas of the world and download it on a 3G network. The data consumption is transparent, and Amazon kicks back to the carriers a portion of the revenue to the carrier wherever the download took place through interconnect agreements. If architected in the right way, other developers could allocate a certain amount of bandwidth to a service that they provide, and make the service essentially independent of the carrier connection. I could therefore, for example, sell a push-breaking news service to people that they would receive irrespective of whether they had credit on their devices. Advertising could similarly be distributed to mobile devices where the advertiser ultimately pays for the data cost.
The billing and authorization challenges are not insignificant. Aging data buckets – like minutes in post-paid corporate plans in the US – split across multiple accounts can be a challenge. Accounting liability for outstanding and unconsumed data can become an issue and bandwidth too can be a challenge. Turbo boosting – for a charge – is another offering that is beginning to attract attention, where the normal bandwidth allocation is boosted for a period of time in order to allow the fast download of a movie, for example, or a higher quality line for a Skype video call.
Each of these models requires an integrated charging and policy architecture in order to effectively support customer care, credit control and revenue assurance. Allowing the establishment of community data, or social data pools will spawn other businesses, and other models from business partners and consumers themselves.
As the cost of mobile data continues to come down, and digital customer engagement becomes valuable for a multitude of other reasons, the old telcos may increasingly become Service Enablers rather than Service Providers. Seamless handover from corporate office access networks, to public and private WiFi networks, and the telco networks in between is becoming an expectation, especially in our cities. As it melts into the ether, and persistent connectivity becomes the norm, the models in the background will need to change.
This story first appeared on: asmarterplanet.com
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