By Roland Klemann, Cisco Internet Business Solutions Group (IBSG)
Demand for Internet services continues to build. The increasing popularity of smartphones, tablets, and video services is creating a “data tsunami” that threatens to overwhelm service providers’ networks.
So far, service providers have mainly reacted to the data flood with technical counter-measures—for example, by deploying Wi-Fi and small cells to offload data in heavy traffic areas such as sports stadiums and downtown urban areas. The Cisco Internet Business Solutions Group (IBSG) believes that operators should also act on the demand side, which can be best influenced by pricing.
Back in the early 2000s, network operators were clamoring to build their Internet customer base; they replaced their old metered models for dial-up Internet, and enticed new subscribers with unlimited, flat rate, “all-you-can-eat” broadband data plans. This pricing strategy has enabled mass-market penetration—first in fixed, then in mobile. But it has not increased ARPU.
While flat rate pricing plans have contributed to the waves of Internet data swamping the capacity of broadband operators, these plans have done little to create value from all that traffic. In fact, the decoupling of connectivity and service layers can destroy value if you compete on easily comparable flat rate access prices only. Flat rates shift the focus from quality and service differentiation to price competition, and expose operators to the risk of cost-plus-based pricing, with diminishing returns.
In some countries, fixed-broadband providers have started altering flat rates by introducing some forms of usage-based pricing: “throttling” data download speeds for the heaviest users, switching them to potentially more costly metered data plans, or introducing new tiered price plans. Just in the last few months in the United States, both Time Warner Cable and Comcast made announcements about their plans to experiment with usage-based pricing.
While usage-based pricing models are required to fight “bandwidth hogs,” they must be carefully introduced and managed. Customers have learned to love flat rates. The 2011 Cisco IBSG Connected Life Market Watch study found that Read More »
Tags: bandwidth, broadband, flat rate pricing, IBSG, internet business group, mobility, Service Provider, wi-fi, wifi
Despite phenomenal growth in mobile devices and application – and seemingly insatiable consumer demand – many key players in the mobile industry are struggling. This paradox – huge growth and customer demand, yet significant business and market challenges – is making it difficult for many companies in the mobile value chain to understand the key drivers that shaping the industry and the coming challenges and opportunities. And, most important, they are searching for strategies that will lead to success.
Cisco’s Internet Business Solutions Group (IBSG) examines this phenomenon in a new paper published on the Service Provider Thought Leadership section of the IBSG website.
Titled “The New Mobile World Order: Perspectives on the Future of the Mobile Industry”, this IBSG paper provides a perspective on the key disruptors and tipping points redefining mobility, while producing two plausible scenarios for the future of the mobile industry. These provide a framework enabling mobile operators to evaluate their futures and rationally assess strategic options. Read More »
Tags: Cisco, IBSG, mobile_operators, mobility, service_provider
In my previous post, I described the challenges senior management faces in scaling collaboration capabilities to address business needs and the way work is done today.
Electronic and whiteboard displays, lean practices, and collaboration tools by themselves are clearly not enough. Management needs to take a holistic approach to develop and integrate capabilities in three areas to address the challenge of capturing the next wave of productivity gains: culture and leadership, extended workplace visuality, and pervasive collaboration.
Organizational culture and leadership are probably the single most important factors in enabling gains in employee productivity and innovation that result from knowledge work. Morten Hansen, in his book Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results, provides an excellent perspective on what management can do to identify barriers to collaboration and design solutions to overcome them. Most of these barriers are cultural and particularly severe in large global corporations with multiple business units, complex matrix organizational structures, and operations that span multiple countries. Read More »
Tags: Cisco, collaboration, culture, IBSG, knowledge work, leadership, lean techniques, Morten Hansen, networked organization, productivity, visual workplace
In my previous post, I described the “culture of innovation,” for which Bay Area companies have become renowned. And we looked, briefly, at what it could mean for the public sector.
It may come as something of a surprise that Bay Area companies are no more likely to follow a Technology Drivers innovation model than companies located elsewhere. Like many top innovators, companies in the Bay Area have not only found success in creating ground-breaking technologies, but they are almost twice as likely as other companies to have developed the capabilities needed to provide a superior understanding of the stated and unstated needs of their end customers. It isn’t just about how many transistors you can fit on a chip. It’s about how such advances can lead to products and services that gain traction in the marketplace through superior insight into, and understanding of, customers’ needs. Read More »
Tags: Bay Area, Cisco, government innovation, IBSG, innovation, management, private sector, public sector, strategy, technology, technology entrepreneurs, technology strategy, technology venture, venture capital
In Part 1, I explained that both sides of the customer experience equation—what I am led to expect, and what I perceive I received—are both heavily influenced by today’s hyperconnected world. Let me recap briefly before I explain how we can approach customer experience in this new world.
Today, I can easily compare products across the globe—and get any number of reviews on your products versus any others. Perhaps even more influential are the social media networks, where those I listen to most—my friends—can quickly influence me and make or break your product. Read More »
Tags: Cisco, collaborate, collaboration, customer, customer experience, expectations, experience, hyperconnected, hyperconnectivity, IBSG, perceptions, rich media, social media, socialminer