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Wednesday, February 3, 2010

Next-Generation Network Business Positioning

Figure a: NGN layers and their “new wave” services.

figure (a) is showing a map of next generation network by layer, the new services each layer supports, and the delivery mechanism to a segmented market. If we start at the top, the standard telecoms market segmentation distinguishes consumers from business customers. The business sector is then, in its turn, further segmented into global enterprises, large national corporates and small to medium enterprises (SMEs). Sometime “small” is distinguished from “medium” in this last category.

figure (b) : Near-future services and the value network.

The next-generation network enables a combination of connectivity, communications and application services to be provided for the corporate and SME sectors. Connectivity services include various kinds of VPN and leased lines, while communications services include voice over IP, e-mail, instant messaging, video-conferencing, and contact centers. Application services include application and Web hosting, data storage and backup, and value-added services such as security.

From a carrier point of view, despite their aspirations to value-added services, they believe in their hearts that most of their revenues will come from telecoms services annuities. They forbid their professional services arm from shopping around to their competitors, and throw their SI services in as a cut-price sweetener, or even for free, to clinch a deal. The professional services division is perpetually confronted by the dilemma: am I a profit center, or am I a customer operations cost center? They would like to be the former, but those carrier instincts keep pushing them to the latter position.

A further advantage of targeted, just-in-time investment in NGN components is that costs are likely to be lower. Most NGN technology is software, which is market-priced by the vendors (marginal cost being close to zero). The incumbents are forcing through their NGN programs for strategic reasons, and in the process paying some/most of the vendors’ development bills. But a small alternate operator should be able to bid prices down a few years out, at a point when NGN “new wave” services finally become real.

source: Business Strategies for the Next-Generation Network by Nigel Seel

1 comment:

Manish said...

This article reminds me the era of dot com boom

That time we MBA classmates read a similar article about different business models for DotCom

1. information + entertainment = infotainment portals, newspaper portals. e.g. indiatimes, rediff etc
2. ISPs Satyam got fist license at that time. VSNL was only Internet service provider.
3. some social networking, matrimonial, e-mail, social groups etc. Today we have orkut and facebook
4. e-commerce: B2C and B2B
4 A. to target end consumer segment. Today we have e-bay India, air ticket portals etc. That time, payment gateway etc were new concepts. B2C
4 B. to target industry segment. B2B
Some other models were also there.

Today, after a decade, telecom and wireless industry come up with some models.

1. ISP equivalent is connectivity service in your article.
2. B2B e-commerce is now replaced with services to enterprises (SME)
3. VAS is like B2C e-commerce
4. MVNO is like middle man between customer and mobile operator. In India vergin mobile is MVNO, which give service to end-user using Tata Indicom's CDMA network. Now vergin mobile started in GSM too, not sure which network.
5. Apple changed the rules of game by app-store where anyone can contribute thier application and earn moeny.

Keep Writing.