The operator side

The web has been a mixed blessing in many ways for mobile operators.  At a functional level it has helped many operators revolutionise their retail offering and fundamentally change the way they interact with customers.  At a service level it has created new services that enable competitive differentiation and increased marginal revenue. 

However, at a business model level it has also opened up a number of perceived threats.  The fear of becoming a ‘dumb pipe’ has been compounded by the rise of new ‘over the top’ internet telephony  services that carry voice and messages over IP, essentially using the operator’s own data network to undercut their core communications service offering.  From VOIP services such as Skype through to mobile IM and messaging offerings such as Facebook’s new messenger product, how much are these services actually presenting a new threat to operator business models?

The truth is that there are hidden opportunities for operators to profit and innovate in this area.

Instead of attempting to block Skype and similar services from their handsets in an attempt to prevent profitable voice and SMS services from being cannibalised, operators should look at ways to monetise this new array of internet telephony services in innovative ways. 

One solution to this lies in a new range of services being investigated by the Internet world.  Whilst ‘over the top’ services were the initial battle ground between operators and the Internet, many social networks and other online businesses are increasingly looking at traditional numbers, voice and SMS channels as part of their business offerings.  Whether this be integrating SMS as a part of a mixed messaging package, or using numbers and voice as an alternative social media communications channel, this convergence of the telco and web worlds opens up a new revenue opportunity for mobile operators.

The opportunity for operators is to provide mobile connectivity to the Internet world via partnerships.  Operators can take advantage of the social media and internet telephony environment by addressing the telecom-web convergence space - enabling the interaction between the telecom and internet worlds. This is possible by providing mobile numbers (in the form of international long numbers) to internet companies, meaning that all voice and SMS traffic goes through an operator’s network. This number-centric approach means that operators can be an active party in internet and social telephony. 

In order to scale this to a global level and to connect with as many social networks and internet companies as possible, partnerships with mobile interaction providers are of strategic importance. By partnering with a business of this type, operators can gain a strategic slice of new revenue and innovation opportunities.  Instead of being cut out of the equation, as many have been with ‘over the top’ services, this form of partnership can give an operator a profitable engagement with new, Internet based services.

The opportunity for the internet businesses, and thus mobile operators, in this scenario is obvious.  An Internet company providing a service of this sort does not want or need to sign multiple regional operator agreements.  Instead, they can work with a telecom-web convergence provider to access a single point of contact for hosted numbers, voice and SMS connectivity.  The partner operators in turn receive a share of revenues for traffic carried over their networks – traffic and revenue that might otherwise have been entirely independent of their business.

With a successful heritage in the provision of high-quality SMS to internet companies & enterprises, facilitated through deep-level technical partnerships with mobile operators, tyntec is increasingly moving into the telecom-web convergence marketplace.

tyntec’s 10 year history of working with operators means that it has the understanding and technical expertise to manage the commercial and technological challenges of working in this market.  Moreover, the company’s experience of reselling this connectivity on a global basis to major customers has given it the head-start in signing some of the world’s largest Internet businesses as customers for SMS and telecom-web convergence services.

The position of the mobile operator is currently in a state of flux.  No-one seriously believes that they will be unseated as a major force in the communications market, but their role and relationship with customers is inevitably developing as new technologies and services arise.  This, however, need not be a threat for the forward looking operator.