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Solutions to 10 Service Provider Pain Points


As a follow-up to Eslambolchi: 10 Service Provider Pain Points, Dr. Hossein Eslambolchi, chairman and CEO of 2020 Venture Partners, has offered some solutions that service providers can apply to ease their aches:

1) Fixing Flat ARPU

  • Attempt to push the ARPU up via vertical integration into higher-margin content and advertising with services surrounding education, e-health and mobile wallet, etc.
  • Re-engineer the network: Cap traffic growth on legacy technologies and grow it on the cost-reduced technologies. The trick is to look for capital unit cost reduction for an end-to-end service, not just a cost reduction of one box built into an end-to-end service connectivity.
  • Improve margins by focusing on optimization, cycle-time reduction, defect reduction, automation, just-in-time provisioning, inventory management and churn reduction.

2) Alleviating Network Congestion
  • Offload mobile data traffic from the cellular network to Wi-Fi. Build free Wi-Fi in strategic locations, such as sports stadiums.
  • Provide network flexibility by embracing WiMax, Wi-Fi and Cellular, HSPDA, HSPAD+, LTE and ultimately true 5G using IMT-Advanced (OFDMA based).
  • Create a cross-layer feedback loop with the applications and devices. Establish your presence on the devices so they can warn the network when capacity problems may be cropping up.

3) Curbing All-You-Can-Eat Connectivity Services
  • Move to a usage-based service plan, with different plans for different qualities of experience -- gold, silver, bronze, etc. Charge like the electric company.
  • Be flexible. I see usage-based plans happening now, but it may not be a long-term solution. My sense is we will see more effective ways to deliver content over time.

4) Putting Up With Peer-to-Peer Traffic
It's growing fast, but there is no business model in sight to monetize it. You may have to charge for it by moving to a usage-based service plan. Also, you can monetize some of it with ad insertion, and other value-added services such as recording, reply and deep-packet inspection.

5) Monetize Over-the-Top Video
  • Charge for OTT video traffic by moving to a usage-based service plan.
  • Leverage OTT capability to drive your own video product agenda.

6) Invest in Network Security
  • Invest in real-time and early-attack detection and diversion.
  • Sell mobile security apps to customers for $2 per month per user.
  • Adopt services from Sensory Networks Inc.

7) What to Do About IPv6
Just do it. This is the cost of doing business.

8) Regulations
  • Keep pushing back on net neutrality.
  • You cannot milk the consumers any more. Carriers need to stop worrying and think about added value they can bring to the table with their platforms.

9) Monetizing Packet Traffic
Service providers are living with low-margin "dumb"-pipe revenues while Google and others are gaining high-margin traffic via over-the-top applications. This isn't sustainable for service providers, especially on wireless networks where spectrum is constrained. What to do?

Get advertising revenue from packet traffic. Leverage the last-mile connectivity (combine wireless and wireline) and utilize deep-packet inspection technology to compete with Google and others for ad revenue.

10) Curing Customer Churn
Take care of items 1 thru 9 above and this problem will go away, too. Also, establish retail stores like Apple and train customer care reps to teach the masses which applications and platforms are good for them. Sell them platforms and apps at the stores instead of devices; the margin's in the software, not the gadgets that need to be subsidized.

Sounds like a lot of work, doesn't it? What do you think service providers should do first?

— The Staff, Light Reading

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User Rank: Light Beer
12/5/2012 | 5:13:24 PM
re: Solutions to 10 Service Provider Pain Points

I whole heartedly agree with HE's statment re pushing up ARPU through vertical integration into higher-margin content.   This is what I did at Corebridge and now Uciology and has always paid dividend.

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