During the Management World keynote on May 15th, we got a taste of how an established service provider giant goes beyond its core business to capitalize on new business models. CEO Stephen Shurrock of New Business Ventures, Telefónica Digital, discussed its partnership with Generali, a major global insurance company with whom Telefónica has developed a pay-as-you-drive insurance product. He also discussed partnering with Mozilla to launch a Firefox phone later in the year.
This is just another recent example of how operators are exploring new opportunities. Other examples include AT&T saying that new business models will include subsidized data from content providers, potentially supported by advertisements, or news from ESPN that it will consider subsidized models as well. We are seeing more industry examples of content providers and advertisers who are prepared to pay the bills to ensure their customers can view content with a high quality of experience.
Of course, Net Neutrality and other regulatory issues will have to be considered, since some of the new business models are prompting criticism from Net Neutrality advocates. Additionally, customer opt-in, privacy and security will also be important factors.
Once these issues are addressed, it seems mobile subscribers may be happy that someone else will pick up the tab for their viewing of sports, TV shows, movies or other content.
If that becomes the case, there will be considerably more reliance on policy servers, charging systems and Diameter Signaling Routers. Operators would have to track:
• Which content providers and advertisers are paying for the usage;
• Which data packets would be associated with those partners;
• What parameters of each contract have to be enforced such as time of day, device, quality of service, and location; and
• What subscriber preferences need to be enforced such as opt in/out, security, and privacy.
If the time comes that subscribers start consuming subsidized content, there will also be opportunities for mobile operators to devise more personalized, flexible data plans, which would again be governed by intelligent policy control.
All in all, any business model that will increase the freedom with which mobile subscribers watch sports, movies, or other types of content will have significant Policy implications. Stay tuned!