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Freemium Business Models for Mobile

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In this continuing series of blogs about Mobile Data Monetization*, let’s look at the Service Provider Freemium business model, which involves offering a basic service for free (indefinitely, or for a trial period) to incent some other subscriber behavior that the operator can monetize. Let’s look at the typical reasons that operators have in offering a Freemium service:

1.) Encourage users to upgrade up to a higher-price, higher-quota mobile data service in order to get the Freemium service. We’re seeing more and more of this approach, especially in conjunction with LTE service offers. For example, in the early days of Verizon Wireless’ LTE roll-out, it offered a free 1-year subscription to NFL Mobile Premium to drive subscriber upgrades from 3G to its LTE data plans and smartphones / Mi-Fi devices. Now, with the adoption of LTE services well underway, Verizon Wireless is leveraging its significant investment in NFL content rights by offering NFL Mobile Premium as a Freemium service to users who opt for one of its new “More Everything” pricing plans. In many markets where mobile data usage is low, some operators have taken to offering “zero-rated” usage of popular social media sites such as Facebook and Twitter for a period of time, usually 6 to 12 months, during which the data used does not count towards the subscriber’s monthly quota. The goal of this approach is to get the user accustomed to using these services over mobile so that he or she subscribes to a data plan at the end of the Freemium period.

2.) Entice users to eventually pay a premium for a more Read More »

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Join Us at The Internet Of Things World Forum Panel With AT&T, Sprint, and Vodafone

Mobile Making It Happen

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The Internet of Things (IoT) is opening up a world of real opportunities and rapidly transforming our communities, our cities and our daily lives. The second annual Internet of Things World Forum (IoTWF) in Chicago, October 14–16, 2014 marks a defining moment in the growth of the IoT.

While today most of the current IoT solutions do not have the ability to seamlessly connect and service the types of devices expected to be part of the 40 billion “things” forecasted to be activated by 2020. Yet mobile operators can uniquely deliver the connectivity (e.g., 2G / 3G / 4G / Wi-Fi / Small Cell) required to all devices anywhere, anytime, any place. Add in the mobile operator’s service delivery platform with the agility to activate thousands of devices at a time, the scalable cloud capacity for reduced OpEx, and a new application development platform enabling increased service creation velocity –and you’ve got a winning formula. So if you plan to attend this year’s IoT World Forum in Chicago make sure you sign up for the session the The Value Delivered by the Service Provider in IoT and listen to service providers discuss how to improve IoT experiences, increase business impact, and make money while doing it.

The Panel:

  • AT&T SVP, Kevin Petersen – AT&T Digital Life
  • Sprint Director, Mohammed Nasser – Connected City
  • Orange Deputy Director, François Duquesnoy — Orange Smart Cities & Territories

The Topics We’ll Cover: Read More »

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New Smart City Opportunities for Service Providers

Tremendous new opportunities are being created for technology vendors and service providers as cities around the world look to build out smart cities to reduce municipal costs, tap new sources of revenue, and improve the overall quality of urban life. The previous blog (Smart Cities Are a $7.5 Billion Annual Opportunity for Technology Providers) described all of the essential requirements of the smart city architecture and quantified the great opportunities for technology vendors and partners to help to create and operate these digitally smart cities of the future.  The last question to address is what are the specific opportunities for SPs and where should they play to extract the most value from the deployment of smart cities?

The potential revenue opportunities available to SPs depend upon the strategic fit to their business.  Specifically, we evaluated the opportunities across three strategic fit criteria:

  1. Core Business – How closely is the solution or service aligned with the SP’s core business (e.g., using existing assets, leveraging current business operations and expertise, in regional footprint)
  2. Stretch – To what extent would new investments or operations be required to deliver the solution or service (e.g., Capex for new assets, creation of new business operations, acquisition of new expertise, out of region play)
  3. Deal Dependent – To what extent would the nature of the deal and the governance structure influence the potential revenues available? (e.g., vendor or lead, city investment or PPP)

Assessing the smart city revenue opportunities across these criteria reveals a number of strategic options for how SPs can think about approaching the smart city opportunity: Read More »

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Cisco and Service Providers – Transformation for the Internet of Everything

Just a few years ago, I’d go out for an occasional weekend drive to take in the splendor of Northern California, and leave my mobile phone and various gadgets behind.

Those days are long gone.

Over time, smart devices and connectivity have transformed my life – as I’m sure they have yours – and become essential to function in today’s modern world.

By 2020, there will be an estimated 50 billion objects connected to the Internet. Organizations and even individuals that effectively use these connections will achieve significant advantages, including more efficient and enjoyable experiences.

And service providers are in an enviable position, sitting at the center of the Internet of Everything (IoE), bringing together people, processes, data, and things to make networked connections more relevant and valuable than ever before. IoE is turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.

The stakes are high.

From smart grid and smart buildings to environmental sensors and mobile consumer experiences, Cisco predicts that between now and 2022, $19 trillion in value is at stake for organizations willing to take advantage of the immense IoE opportunity.

 

Today, Cisco made announcements that demonstrate our commitment to partnering closely with service providers and enabling them to capture more of this opportunity, as hundreds of them already have. Their businesses can thrive by increasing revenue, decreasing operating expenses, and enhancing agility.

First, we announced Read More »

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Why the CFO Needs to Guide Technology Acquisition for Service Providers?

With telecom service providers (SP) increasingly using technology as a competitive differentiator, it is becoming important not only to acquire the right technology, but to acquire it in a way where it offers maximum benefit to the business.

Rapid technological advancements have made it necessary for service providers to be very nimble and frequently revise their offerings to suit customer requirements. Over the last four years, mobile service providers have exhibited cyclical—but, on average, declining—revenue growth patterns, according to a Cisco whitepaper ‘The Road to Cloud Nine’ published in February 2013. Overall, the momentum has Read More »

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