After almost 18 months of virtual conferences, it was wonderful to be a part of the 2021 Deutsche Telekom Campus Fair, with our experts attending in Bonn – in person! Deutsche Telekom invited Enea to be part of a panel, along with Huawei, Nokia and Ericsson, to discuss a critical issue close to our hearts – network monetization. Here are my summary thoughts on what turned out to be a very lively session!
What are the monetization opportunities in B2C?
Some of the most commercially promising verticals to monetize in B2C are related to the bundling of 5G rich applications. For end-users these applications are useful for understanding the benefits of 5G, while for CSPs they can help boost ARPU by providing additional value and creating stickiness. Within this context we see cloud gaming, combined with HD video streaming and enhanced content such as Augmented Reality (AR), as one of the most promising verticals.
In particular, the growth of cloud gaming has been truly phenomenal. Just two years ago only a few took this technology seriously. Today cloud gaming is becoming a multimillion-dollar industry and along with the likes of Google Stadia and Microsoft’s project xCloud there are several companies, such as Vortex, worth noting. Gamers are fascinated because of the experience from these high-performance streaming gaming services. It is therefore important for mobile operators with a customer experience centric strategy to offer APIs to gaming partners.
But a word of caution. One of the biggest barriers to excellence in Quality of Experience (QoE) and monetization of services such as gaming and video streaming, is the high levels of encryption. Traffic is becoming more and more obscure for mobile operators and stifling the network provider’s ability to manage QoE. Having that in mind, Enea has made a number of acquisitions in the area of Cybersecurity and Traffic Management. CSPs can now differentiate their proposition by providing a prime and secure service for subscribers who value quality of experience.
How can operators monetize B2B and verticals?
When it comes to monetizing B2B verticals the commercial success for some operators has been limited. Our experience is that operators must carefully consider their activity in three distinct steps:
- Focus on a few specific segments to really understand the customer value generation process. This could even be a segment where you already have strategic and commercial relationships.
- Invest your time and resources to become great at solving concrete customer problems for that vertical. What are the real-world, nitty-gritty problems you can solve?
- Embrace cloud native business control and accounting models. Revenues may be lower than traditional connectivity but margins could still be good in a revenue sharing model.
Enea has recent experience of tapping into a B2B vertical market, in this instance the defense industry. Enea joined a tier 1 Scandinavian operator, Telenor, and contributed significantly to what has become the world’s most diverse 5G standalone network and vendor ecosystem. Together we delivered network slicing capabilities for mission-critical applications. What’s the lesson here? This project demonstrated the importance of network openness and best of breed capabilities. The project won a series of industry awards, including this year’s Mobile World Congress GLOMO award for Best Network Software Breakthrough.
And that old question came up again (it always does) …..
How do we deal with hyperscalers?
Mobile operators can work in partnership with hyperscalers. The discussion around operators vs hyperscalers has become very much polarized but it is important to have a wider view. If we take the example of a solution at the Edge, there are four roles:
- Carrier-class connectivity and site
- Cloud infrastructure (the distributed capability and centralized counterpart)
- IT / OT Applications
- Solution and business orchestration
Out of these four roles, the solution and business orchestration has a large strategic value in terms of coordination across the ecosystem and potential returns. And for this to happen the vertical know-how that we mentioned before is key.
So, if things are done correctly, there is substantial value to be delivered and monetized by CSPs towards enterprises while partnering with hyperscalers. At Enea we are working with several hyperscalers to simplify the delivery of our technology and eliminate friction.
History has shown that openness leads to innovation and monetization. The more open your network architecture and its interfaces, the greater the possibility to expand an ecosystem of innovative partners. And of course, greater the return.
Deutsche Telekom has been leading the pack in its ability to orchestrate a diverse set of partners with a best of breed approach, creating value in different segments and verticals. We applaud this!
And, as I said during the panel, Deutsche Telekom’s slogan remains an inspiration to all:
We won’t stop until everyone is connected!