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Mr Operator, are you evolving your ecosystem?

Cisco Employee

The mobile operators are going through a multitude of changes, practically in every part of their organizations. And much has been written on the drivers, causes, effects and even derivative effects.Surprisingly, there is very little discussion on the mobile operator's ecosystem - the ecosystem that is rapidly evolving to accomodate for the environment change.

Quoting from wikipedia on Business Ecosystem:
The concept was introduced by Moore in the Harvard Business Review in May/June 1993, and won the McKinsey Award for article of the year. Moore wrote - "An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organizations also include suppliers, lead producers, competitors, and other stakeholders. Over time, they co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles."

Lets look at whats happening to the operator ecosystem:

  • Devices are changing rapidly, there are intitiatives like Open Device/Open Access, M2M et all.... The operator needs to have these "speciality" device manufacturers in their ecosystem. An example is Apple with iPhone is in the ecosystem of AT&T, though time bound for 5 years.
  • Next-generation of revenue is being driven by innovative and user centric data applications. The mobile operator has to partner with these application providers. Today there is a stress in the relationship between Over-The-Top players and the operators - this relationship will evolve to a ecosystem partnership. There are already examples where Over-The-Top players provide certain enahanced features for a patcilar operator's users.
  • Networks are evolving to an All-IP architecture and the transport is evolving to ethernet based. The operator needs to have an ethernet and IP vendor in its ecosystem who can provide expertise to build the next-generation network with an architecture that supports modularity, scalability, resiliency, quality of service and security. Its a science and art that requires tremendous expertise to design and implement an IP/ethernet network that meets the future demand.
  • Radio will continue to evolve and increase the access speed requirements. Its critical to have a radio vendor in the ecosystem that is innovating to provide next-gen radio at the most optimum cost utilizing existing assets (and not wholesale upgrades or new tower builds).

This ecosystem is in contrast to ecosystem just a couple of years back where the radio vendors used to provide the majoirty of access, RAN and MSC infrastructure. And the operator had to focus on the voice service that brought 90%+ revenues.

Very interested to hear any thoughts and observations on how you see different operators making this shift!



Thank you for raising the awareness on this important topic!

I agree with you that everytime there is a technology or business value chain disruption, the ecosystem gets redefined. Currently, in the mobile space, both the disruptions are occurring!

On 9/1/2009, I participated on a panel "Enabling the App Store..."

Paul Kapustka commented that the leverage is now in the App Developer's hands!

Alan Quayle chaired a panel on the Ecosystem of App Developers.

While the App Developers bemoaned the lack of network APIs, the tremendous burden of supporting numerous device types, etc., (ALL LEGITIMATE CONCERNS), it is equally important to pay attention to meaningful, win/win, partnerships that drive incremental revenues to both the (mobile) operators and the app developer. Current Over the Top Applications are consuming the resources from the mobile operator without any noticeable financial rewards.

While the holy grail is a scenario where the consumer can pick up a mobile (compute) device wherever, load the desired apps from wherever, with the full assurance that the two shall work and interoperate! That would call for truly open APIs, both on the network side and the client side, and set of standards/guideleines for interoperability.

I also want to stress that we need profitable mobile operators and service providers so that they continue to invest billions of dollars in delivering scale, functionality, personalization, and ubiquity of conectivty and services that we all cherish!

What do you think? Is over the top model fair? What should operators do? Is flat rate, all you can eat, billing model sustainable?


Cisco Employee

Hi Nagesh:

Thanks for sharing the links.

Regarding over the top model - I strongly believe there will be a partnership between the operator and over the top player for both to make money. From the blog entry above - "Today there is a stress in the relationship between over-the-top players and the operators - this relationship will evolve to a ecosystem partnership."

How this relationship will look like may be varied, some examples could be:

* Basic features available to users accessing any operator. Advanced features available only or at a better price to users accessing a certain operator.

* App bundling/convergence - may be complemetary apps bundled by the operator or even better convergence of apps

* Targeted Ads when accessing app from certain operator, potentially getting higher ad revenues

What should operators do - aggressively look for what their consumers want, the segment they want to target. And see how quickly they can tie up with the relevant app/over-the-top players.


Ritesh - good post.  As we recently discussed, I thing it's important for application providers to help operators monetize the 4G uplink with easy to use apps straight off a device - and not just a phone.  I think more consumer devices, not just phones, can and should be made 4G aware....i.e. cameras, camcorders, etc.

As we've seen with Enterprise TelePresence, it's not just the visual experience that makes it successful, but the fact that anyone can use it - in fact I would even argue moreso on the latter point - usability.

Consumer example: My dad takes great pictures, but he cannot share them with his kids who live across the country because he's too much of a neophyte to extract the pictures from the camera, and upload them using a social networking portal - or even simply email them to me.

But what if his high quality pentax digital camera had a 4G radio, and a built-in easy to use app that allows him to send me the high-res version of the picture (or video) straight from the camera?  He would pay for that ability.  That's monetizing uplink for the operator.

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