© 2008 mBlox
Enablers: Telcos as a platform A two sided model?
Stephen Wood – Global Product DirectorStephen Wood – Global Product Director
mBlox LtdmBlox Ltd
[email protected]@mblox.com
May 25, 2011May 25, 2011
© 2008 mBlox 2
mBlox – the world’s largest Mobile Transaction Network
A network connecting many Content/Service Providers to many Operators
The network for Enabling Services transactions worldwide
4 billion transactions worth $500m in 2010
We sell SMS and Premium SMS services. Delivery and ‘on carrier billing’.
© 2008 mBlox 3
Enablers, telcos and content providers- A possible future landscape discussion
Telcos have assets of great value to content providers
… we know content providers will pay for them, if truly valuable
… we know they could provide revenue for operators
… in a two sided model of retail and ‘wholesale’
BUT.. handset/OS providers may diminish the value of these assets
… by disintermediation of carriers; providing enablers directly
… however, can this be provided effectively to content providers?
… and does this model provide the ‘best hope’ for sustainable data revenue?
© 2008 mBlox 4
Separation of access and service- A trend accelerated by IP services
Customers want to buy service, not access. Visible in Mobile Content industry
When services were delivered inside the access network, the problem did not arise
Deregulation of voice services did not materially change this model
IP networks fully separate service and access - a new commercial challenge
‘Wholesale’ versus retail?
Access
Access
Terminal
Service
Terminal Service
Service Terminal
Terminal
© 2008 mBlox 5
What new business models will prevail?
Competing for the consumer, trading together
Will the mobile business model converge on the internet, or vice versa?
What are the other sources of revenue?
Content & service
Access
Consumerhardware
© 2008 mBlox 6
ContentOSS
BSS
ContentService
Marketing
Content services
KeyEnabler
Services ($€£) Network
OSS
BSS
CommsService
MarketingCore comms services($€£)
Enabler Services in Mobile ContentThe mobile operator as a 2-sided platform
Consumer relationships based on core, vertically integrated services…
…create valuable enabler services to third parties
© 2008 mBlox 7
Key enabler categoriesDelivery enablers
• Text messaging is established and mature• Sender-pays data is key• Quality of service will be vital
Billing enablers• Premium and WAP billing are established and mature• Refunds and credits need to come faster• More advanced ‘on carrier’ billing • Credit and debit card payments….?
Handset Context – the next frontier• Location lookup? • Roaming detection• Radio link quality lookup• Terminal capabilities and status lookup
Subscriber Insight – eventually?
Identity management• MSISDN or alias links device to person: identification and addressing
Handset enablers (possibly via the mobile cloud?)• Some complement: accelerometer• Some displace: GPS
© 2008 mBlox 8
How Mobile Has Worked pre App Store
Phone service relationship gives mobile operators control also over access
Mobile operators sell enabling services to content providers
Mobile operators provide payment means for service providers and so…
…Customers pay for content
Disrupted by App Stores -> Handset and OS providers build direct consumer charging relationships
Content & service
Access & Phone Service
Consumerhardware
Comms
Content services
Enabling services(billing, SMS,...)
© 2008 mBlox 9
Enabler Services in the Value Model
Tax
Carrier Payment Enabler Services
Other Net to CP
Carrier Delivery Enabler Services
Service Marketing
Content RightsCP Net Income
Enabler services earn carriers ~25% of gross customer spend
Scaleable, high margin revenue source, driven by numerous CPs and services
Standardized enabler services scale with the growth of content services
eg
© 2008 mBlox 10
The Coming Fight Over Enablers
Enabling services will be important to erect barriers to customer churn….
…and also important sources of revenue
Competition for control over consumer buying decision
Different attitude of players: e.g. Apple v. Google
Content & service
Access & Phone Service
Consumerhardware
Brand & Application Stores
Billing Transmission Network data Subscriber insight
Billing Handset control Network
visibility Screen layout Store placement
© 2008 mBlox 11
Service providers require a mixture of enablers
Network Enablers
Payment Enablers Handset Enablers
How will these get provided? Telcos, app stores, credit card services…?
Has much already been given away? Handset capability..?
How are they presented? Divergence a huge issue for content providers. An ecosystem exists…
Data, ‘Charge-to-bill’, IdentityData, ‘Charge-to-bill’, Identity
Location, Security, GUILocation, Security, GUI
Debit/Credit Card, Debit/Credit Card,
Paypal, App StorePaypal, App Store
© 2008 mBlox 12
Mobile Transaction Network – well placed to intermediate
Provide a sales and distribution channel to content providers
Provide focused service and support wrapper
Simplify for content providers (and Telcos)
Police and protect
Competition; better for all
© 2008 mBlox 13
The Next Challenge for Mobile
Mobile broadband is the most significant revenue driver for operators
Significant ARPU and low cost (no interconnection)
Increasing traffic will cause congestion, voice churn and heavy capex
How can operators tame this?
Incrementalcost
per GB traffic£3 - £100
© 2008 mBlox 14
The Impact of Video
TV and HD-quality Video-on-Demand is coming
Extra revenue/audience for owners of premium content libraries
A new broadcasting medium – but who pays?
Not just from
© 2008 mBlox 15
The Internet Faustian Pact
Consumers’ favourite services - email, information, shopping - are provided free
Access providers are able to extract consumer value from these services, effectively selling an infinite bundle of services
No commercial relationship need exist between service and access…
…as long as neither side breaks the unspoken deal
Content & service
Access & Phone Service
Free!
££
Consumerhardware
© 2008 mBlox 16
Solving the Data Issue in Mobile
Data-rich services presented a huge problem of cost and pricing transparency
Flat-rate data packages reach only a minority segment of the market
Solution is “Sender-Pays Data”, world-first innovation launched February 2009 in UK
Good approach for all– Consumer wins - from total pricing transparency
– Content provider wins - from totally transparent pricing model with 100% market reach
– Operators win - from more content revenue and scaleable, value-priced revenue model for data
Content & service
Access & Phone Service
Consumerhardware
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© 2008 mBlox 17
Enablers, telcos and content providers- What happens next?
Telcos have assets of great value to content providers
… will they provide them?
… will they be useful and can they be monetized?
… can the ecosystem make this consumable for content providers?
And/or
… will handset/OS providers diminish the value of telcos assets?
… by disintermediation of carriers; providing enablers directly?
And/or
… will Telcos embrace this model to aid the broadband business model…?