COMMERCIAL CONVERGENCE = COMMERCIAL SUCCESS?
Convergence not only refers to state-of-the-art digital devices – the term is also being used to describe how the traditional commercial lines of demarcation in the industry are becoming blurred.
Content companies and mobile operators are now offering broadband, telcos are beginning to deliver high definition content and web companies are doing both. At the same time as moving into each others’ commercial territories, many of these players are adopting a new ‘co-opetition’ model, in which they buy wholesale services from each other and expand their traditional commercial models.
RECOGNISING THE IMPORTANCE OF COMMERCIAL CONVERGENCEMarket analyst IDATE has produced a detailed analysis –
"Telecoms in Europe 2015", for the ‘Brussels Round Table’ of which BT is a member – of the possible evolution of the sector over the next decade. Its scenarios range from the disastrous ("Telepocalypse") to the winning ("Evernet") in which operators develop successful models for monetising the content they carry, based on increasing commercial convergence. Understanding these changes and getting business models right is crucial to survival.
Three drivers are shaping the future of
- diverging user needs – individualised consumption of digital goods demands new marketing approaches
- technology improvement and disruption – new communications technologies and advances in computing technology are driving new services and lowering barriers to market entry
- global transitions – the rise of China and India as global players will increasingly influence technology standards and sector economics
There are several possible responses to these changes, amongst them;
Do nothing – "Telepocalypse"The first scenario considered in the report is a ‘Mexican standoff’. Carriers wait for the dust to settle and delay investment whilst regulation enforces an access-at-cost policy, allowing advertising-funded services to severely undercut operators’ revenues. This scenario predicts a competitive shake-out triggered by falling revenues that would transform the industry into a low level
bit-transporting utility. Without added value services, mobile network operators, as just one example could be reduced to providing ‘pipes in the sky’ for other companies content.
Converge, co-operate and compete – "Evernet"
The IDATE report expects winning companies to be those that adopt a ‘co-opetition’ model and take positive advantage of the blurring of commercial boundaries, a converged future in which a competitive and dynamic communications sector has created growth from new services and is generating productivity benefits and creating wealth for European society at large. Handheld devices are now starting to carry everything from Match of The Day to Sat Nav. And as people start to carry their digital content around with them and communicate freely, it seems unlikely that one single service will hold sway. Customers really will ‘want it all.’
READ BETWEEN THE LINES
BT Wholesale recognises that once distinct activities – service provision, network provision, mobile provision – are now converging, as well as the technologies that deliver these services. To match this new marketplace we are ensuring that our wholesale products are available in a variety of formats – from ‘fully managed’ to ‘wires only’ to ‘white label’ – to meet the differing needs of our customers and their changing business models.
At the same time our multi-billion pound investment in 21CN – the converged communication infrastructure of the future – is vital to build long-term success in an increasingly competitive market place and will ensure that the delivery of tomorrow’s sophisticated services is simple and secure. It is designed to empower the end-user with control, choice and flexibility like never before – offering communications from anywhere to any device.
21CN will enable a new generation of content-rich, personalised services, transforming people’s personal and business lives. It is likely to accelerate the process of commercial convergence, by making it easier than ever before for companies to deliver user-centered content and services whenever and wherever they are demanded.