Policy + charging

DT Wants Cash From Content Owners

11:20 AM -- Deutsche Telekom AG (NYSE: DT) still harbors hopes that mobile operators will one day adopt a new business model that will allow them to charge content providers for using their networks.

Speaking at Informa plc 's Broadband Traffic Management conference in London on Tuesday, Markus Freikamp, DT's head of international mobile wholesale business models, said that the operator was targeting the so-called "two-sided" business model. That means, "whoever puts the load on the networks should be the one paying," according to Freikamp.

"We believe in that model and believe the industry will change that way," he said.

But Freikamp also admitted that such an industry shift was not imminent. Here's how he described the timeline: "It's not here today, maybe not tomorrow, but the day after tomorrow."

Mobile operators have talked about this concept for some time, and Freikamp's comments suggest that operators still have a strong desire for such a change. But Freikamp, along with other panelists at the traffic management conference, offered few details about how this model might be implemented.

The main argument for the two-sided model is that third-party content providers should stump up for some of the cost of adding coverage and capacity to operators' networks since they are providing much of the data traffic going over those networks. Operators should not bear the full cost of upgrading the network alone, so the thinking goes. (See Policy Is Still Strategic, But Changing and Mobile Data Packaging: A Policy-Driven Revolution?)

But if content owners are going to pay mobile operators, what do they get in return? Certain quality of service (QoS) guarantees, for example? That's not so easy for mobile operators to provide.

"There's more confidence today on delivering QoS on fixed than on mobile networks," said Freikamp.

Given that this model appears to require a technology as well as a mindset shift for operators and content providers alike, Freikamp's phrase for describing when the two-sided model might materialize -- "the day after tomorrow" -- looks like another way of saying, "a long time from now."

— Michelle Donegan, European Editor, Light Reading Mobile

Michelle Donegan 12/5/2012 | 4:48:51 PM
re: DT Wants Cash From Content Owners

One of Freikamp's fellow panelists was YouTube's director of global platform partnerships Francisco Varela, and he said that YouTube would like to get information from operators about network conditions. But he didn't comment on whether YouTube would be up for paying mobile operators.

He explained that with information about what's going on in the network, YouTube would be able to adapt its video streams or tell customers that a video isn't available when the network can't handle it. "The congested cell experience is not the experience we want," he said. 

Is that something operators can provide content owners?


optodoofus 12/5/2012 | 4:48:46 PM
re: DT Wants Cash From Content Owners

Using the DT logic, they should.  After all, those AC units suck up a lot lof power and require the utilities to increase their capacity and beef up their transmission lines.

Carriers need to align the cost of delivering service to the revenue they receive from the service.  Any other business approach is doomed to failure.  As much as they all dream of the two-sided business model, it ain't never gonna happen.


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