Business model templates are used by startups and established companies to analyze and think creatively about the best way to run a business. They provide a framework for examining current revenue streams and thinking about potential new ones. For example, should services be subscription- or licensing-based? Should pricing be fixed or dynamic? These templates force companies to identify their key value proposition, as well. Is it performance, price, convenience, brand/status or a mix? Business model analysis also considers how best to segment customers, what channels should be used to reach them and what type of relationship each segment needs (personal assistance, self-serve, communities, etc.). Another important question is determining which capabilities companies should develop internally and which ones should come from external partners.
Such questions can be useful as communications service providers (CSPs) ponder how best to take advantage of 5G-related opportunities such as network slicing and edge computing. Take partnering, for instance: Which content and digital service providers should CSPs partner with to enrich their own portfolio with offerings such as cloud gaming and video streaming? And what pricing scenarios will be most successful (subscription, ad-sponsored, etc.)?
Operators need the right support
No matter how creative an operator's strategy team can be in thinking of new ways to monetize 5G and telecom services in general, it will be hard to realize these plans without the right business support systems (BSSs). Consider the following: How easily can your current BSS support the onboarding of new content partners and the associated revenue-sharing agreements? Can your partner management system support complex account hierarchies? How easily can it support changes in multi-partner revenue-sharing models?
The challenges of 5G monetization are not restricted to partner management and B2B2X enablement. A new approach is also needed for revenue management, product management and customer management. For example, systems should be able to support real-time charging for device-based events such as access to a specific video stream at a particular time of day. They should support network slice-based charging even when a service is delivered across multiple slices. The charging function will be key to the monetization of network slicing, as different slices will have unique charging requirements.
Product management is another key BSS for the successful monetization of 5G. It should be able to support the creation of complex bundles that target specific industry verticals and ecosystems. It should enable the real-time creation of 5G slice offerings that guarantee specific network performance parameters. And it should support dynamic pricing based on fluctuations in supply and demand.
As well as meeting the key functional requirements for revenue, partner, product and customer management, an operator's BSS must also meet various nonfunctional requirements such as reliability, resilience and scalability to exploit the opportunities of 5G. For instance, the charging system should be able to cost-efficiently handle huge data volumes, ideally using non-SQL databases. 5G slices will support many devices (the massive Internet of Things concept); consequently, 5G charging volumes will need to scale to support millions or even trillions of transactions per day. Similarly, the revenue management system should be able to scale on-demand to support an unexpected growth in new users.
Flexible deployment and easy integration are key
Key to scalability is the degree to which systems have been architected using cloud-native principles such as microservices. Monetization systems should be deployable in a hybrid of private and public cloud, scaling out dynamically to optimize resource utilization. They should also support the high availability and seamless upgrades needed for continuous real-time operations.
Applications should be easily configured by nontechnical users without the need for extensive support from the operator's IT function or expensive support from third parties. They should also provide open interfaces so they can be easily integrated with other internal systems and third-party platforms. One example is TM Forum’s Open API initiative. More than 60 telecom operators and technology partners have signed up for this initiative, including Netcracker. Whether 5G can lead to a resurgence in telecom industry revenue growth remains to be seen. The best way to predict the future is to create it. And to create new revenue opportunities, telecom operators must ensure they have monetization systems that enable flexibility, agility and innovation.
— James Crawshaw, Principal Analyst, Service Provider Operations and IT, Omdia
This content is sponsored by Netcracker.