Service Provider Network Monetization and Innovative Service Offers

By Shruti Jain, Senior analyst, SP Thought Leadership

The latest Cisco Mobile Visual Networking Index (VNI) Forecast 2013-2018, highlights the following key trends:

The number of mobile users is growing: By 2018, more than 64% of the world’s population (7.6 billion people) will be mobile users.

The number of mobile end user devices and connections is increasing: By 2018, there will be more than 10 billion mobile-ready devices/connections–including 8 billion personal mobile devices and 2 billion M2M connections.

The mobile networks are becoming faster: Average global mobile network speeds will nearly double from 2013 to 2018.

So what are these ever-increasing number of mobile users doing with more devices on faster connections?  According to our analysis, mobile subscribers are using a variety of services ranging from text-based simple services to interactive multi-media mobile services such as video streaming and communications.

As mobile operators make significant investments to deploy higher performing next-generation technologies, they are coming up with innovative ideas to monetize these networks by creating new business models to offer customer value.  An example of this innovative approach is Bharti Airtel’s One Rupee Mobile Video Service, which addresses the end-user affordability issue while readying mobile Internet users for sustained data consumption necessary for Airtel’s business growth.

Mobile networks are helping expand the footprint of traditional brick and mortar businesses such as finance and banking.  On the one hand mobile is being used as means of money transfer as in the case of EcoCash from Econet Wireless, Zimbabwe, on the other hand it is facilitating purchases of applications and content as in the case of KDDI’s au Smart Pass (see below).  And in yet another example, we have TiM Brasil extending micro-insurance services to its prepaid customer base.

While mobile network gives us the advantage of always being connected, the price of being connected while travelling can add up very rapidly.  We have all experienced the desire to circumvent that heavy expense while wanting to stay in touch with family and friends when away from home.  In fact, last year European Union announced an end to roaming charges that will go in effect in July 2014.  Tele2 of Sweden launched the +46 VoIP (see below) application that addresses this issue of roaming charges, +46 enables its Swedish customers to make and receive calls while travelling for the price of a normal mobile voice call.

This tremendous mobile growth is also commensurate with growth happening on fixed network side as well.   As per the Cisco complete VNI forecast 2012-2017, by 2017, 48 percent of the global population will have internet access, there will be more than 19 billion devices and connections, average fixed broadband speed will increase 3.5-fold from 11.3 Mbps to 39 Mbps.

Global service providers of all sizes are implementing new solutions to achieve sustainable levels of success on their fixed networks just like mobile operators.  One of the latest examples is T-System’s cross company exchange platform (CCEP), a centralized services suite for corporate videoconferencing, unified communications, and collaboration. This service addresses the challenges that enterprises are facing in IT cost management for infrastructure and resources.

Do keep a lookout for an update of complete Cisco VNI forecast data in early June, 2014.  We will also keep updating our portfolio of case studies (developed in partnership with Ovum) and bring to you more examples of innovative service offers from global service providers throughout the year.