4 monetization opportunities for Mobile Network Operators

Written by on August 31, 2016 in Guest Blog with 0 Comments

 Rainbow Over DenverMobile Network Operators (MNOs) are confronting threats to their core recurring revenues on multiple fronts. Over-the-top (OTT) services continue to siphon off customers and profits by the millions. The rise of eSIMs, where mobile customers can change carriers at will, have brought the era of the two-year contract to a screeching halt. Technology superstars like Google and Apple and cable heavyweights like Comcast are making moves to enter the mobile space. And WiFi is rapidly overtaking LTE as the preferred choice for mobile connectivity.   

 To flourish in such tumultuous times, MNOs must find new ways to compete. Here are four monetization opportunities uniquely suited for wireless operators. None are silver bullets and all of them entail significant risks and challenges, but they have the potential to help savvy MNOs expand recurring revenues and slow subscriber churn.

 Monetizing customer data

Of all communications service providers, mobile operators may well be in the best position to monetize customer data. After all, they have unique knowledge about their customers’ physical whereabouts, as well granular details about their browsing habits, application downloads, and consumption patterns. Indeed, access to just this sort of information was a prime factor behind Verizon’s recent purchase of Yahoo!’s Internet business and its 2015 acquisition of AOL. The company hopes to monetize that data by helping advertisers better target mobile customers.

And yet, how much success Verizon and other operators will have in selling customer data to third parties is up in the air, largely due to evolving privacy regulations. However, there’s another data monetization option available to MNOs that could be as lucrative, if not more so. They can harness the customer data they already have and use it internally to better anticipate customer needs, fine tune offers and incentives, and dynamically adjust pricing to build loyalty and reduce churn. Unfortunately, few carriers today are able do this effectively, mainly because their data systems are antiquated, siloed, and poorly integrated.

Embracing OTT 

Like most communications providers, mobile operators were slow to respond to the OTT phenomenon. But as OTT services have taken the world by storm, OTT providers are increasingly viewing mobile as a crucial platform for expansion. MNOs agree. According to an industry survey, 80% believe they’ll be able to monetize OTT and more than 97% expect to do so by forming partnerships with OTT providers.

Some MNOs are already well on their way. A case in point is T-Mobile’s hugely popular OTT service Binge On. It offers more than 85 video services from OTT video partners such as Netflix, Hulu, ESPN, and Amazon. In the past year, Verizon, Sprint, and other operators have launched their own OTT services. For now most are available to subscribers for free, but as dependence on mobile consumption grows MNOs can expect to charge for these services. Indeed, the same industry survey predicts that by 2018 global annual revenues for mobile carriers from OTT services could total $42.9 billion.

But to make the most of those monetization opportunities, MNOs will need to manage extremely intricate revenue streams. They’ll have to deftly handle a hodgepodge of zero-rate data plans, sponsored data, revenue sharing, subscriptions, consumption, and data overages—requirements that their inflexible Business Support Systems (BSS) strain to achieve due to their inherent architectural dependence on developers and engineers to realize nearly any new functionality.

Connecting the Internet of Things (IoT)

As you might expect, mobile operators will play a crucial role in connecting the billions of devices, smart sensors and beacons IoT will require. In truth, the bulk of those connections won’t involve the cellular networks that MNOs control. Instead, they’ll happen over less expensive options such as WiFi and Low-Power Wide-Area Network (LPWAN) alternatives. These technologies are well-suited for less demanding IoT scenarios, such as connecting smart washing machines, coffee makers, and office printers.

But in certain vital areas within IoT, such as healthcare, vehicle and traffic safety, environmental monitoring, and precision manufacturing, MNOs stand to gain substantial recurring revenues. That’s because these scenarios require the high availability, security, and larger data payloads supported by cellular connections. True, the playing field will be smaller. But considering the size of the $19 trillion market for IoT as a whole, the revenue opportunities for MNOs will still be vast. For those with the foresight and wherewithal to deploy customized IoT solutions, that is.

LTE-Direct

Of the emerging monetization opportunities available to MNOs, LTE-Direct (LTE-D) may be the most disruptive. The technology, spearheaded by Qualcomm, enables connected devices within 1000 meters to find each other. This device-to-device connectivity opens the door to a multitude of recurring revenue scenarios, including proximity-based offers and incentives. For instance, if you have LTE-D enabled on your smartphone, you can detect discounts and deals in your favorite stores when they come within range.

What sets LTE-D apart is that it insures your privacy. It doesn’t track your movements or employ push technology, so it’s not intrusive. Instead, you’re in complete control. Your phone actively searches for connected info you might find interesting. 

MNOs are in an ideal position to monetize LTE-D because they own the cellular spectrum it runs on. They can generate recurring revenues in a number of ways, including offering it to subscribers for a premium and selling access to the network to retailers, restaurants, municipalities, and anyone else that may want to participate. LTE-D is still in its infancy, but its monetization potential for mobile operators in particular looks promising.

Seizing the day

These revenue opportunities, enticing as they are, demand speed and dexterity that most mobile operators lack. Like their telco and cable brethren, MNOs are still playing catch up when comes to technology implementation. That’s a big problem. If they rely solely on their outdated operations and business systems, these opportunities may well pass them by. To seize them, MNOs must acquire the business and technical agility required to become the digital services providers that today’s fiercely competitive markets demand.

Tags: , , , ,

Brendan O'Brien

About the Author

About the Author: Brendan O'Brien is Chief Innovation Officer and Co-founder at Aria Systems. In 2002 he introduced the world to cloud billing, and innovated database-driven, enterprise-grade web applications before the concept of “cloud” was on the horizon. O’Brien is the industry’s foremost thinker on IoT and recurring revenue: enabling new business models, providing multi-dimensional customer choice, and ultimately increasing revenue. The number-one ranked cloud-billing provider, Aria, empowers enterprises to monetize a wider variety of product offerings, retain their customers for longer periods of time, and grow recurring revenue at scale. Trained as a professional stage actor and classical tenor, in the mid ‘90s Brendan realized coding paid better than acting. .

Subscribe

If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

Top
%d bloggers like this: