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Friday, December 02, 2005

IP Services Revenue Scorecard

In the October Edition of the IMS Insider Report (http://www.ims-insider.com/), we introduced a framework for prioritising IMS-enabled services called the ‘IP-Services Revenue Scorecard’.

This created quite a buzz with our subscribers and some of the Operator marketing departments we’ve been talking to over the last few weeks.

Clearly there are lots of cost saving and operational efficiency benefits to come from IMS – speed to market, lower provisioning costs, simplified billing, common infrastructures and so on - but the $64bn question is:

“How do we define what services we should be developing and provisioning and how do we go about building them?”

Trials of Push to Talk and Video Sharing are all very well, but where’s the sustainable service revenue really going to come from?

Our scorecard looks at the following seven key issues and, using a special algorithm, gives a weighted score for each prospective service proposition:

  1. Adoption potential by existing customers
  2. New Customer Acquisition
  3. Customer Retention
  4. Chargeable Usage levels
  5. Existing Service Usage Stimulation
  6. Usage Substitution (other providers)
  7. Potential Cannibalisation of Existing Services

In the October edition of the IMS Insider Report we looked at a Top 5 list of service categories for IP/IMS-enhanced Converged Services and mapped them onto the Scorecard. In the November edition (out on Wednesday – subscribe at http://www.ims-insider.com/), we drill down on a specific service proposition – in this case an IPTV-related one.

How did we get to an IPTV-related proposition when it doesn’t map directly to our Top 5 service categories?

The answer is instructive for all those trying to define IP/IMS-related services, and builds upon my colleagues’ past experiences as market proposition developers for telcos.

A proposition is about how Operators combine functionality to create a unique, differentiated and targeted user experience. The permutations for propositions are endless. In our IPTV-related one we believe we have combined elements of the Top 5 generic services to produce a potential winner.

Many mobile operators around the world have launched 3G TV services in recent months. However, this has mainly been a broadcast model with some downloading/streaming of video clips, rather than a full IPTV experience with its associated benefits of personalisation and video-on-demand (VOD) functionality. Fixed operators have moved closer to a true IPTV/VOD service owing to the greater bandwidth available on fixed networks, with operators like BT trialling an IPTV/VOD service and looking to launch commercially in 2006. However, while progress has been hampered by technical considerations the bigger challenge has been how to carve up revenue amongst players in the value chain and how the Operator will generate revenue. (See today’s posting on the IPTV market for more background).

The IPTV-related proposition we’ve defined fits the following criteria, which we think are critical to help Telco Operators differentiate and play to their strengths:

- Integration with core telco communication and messaging services (the telco differentiator)
- Strong Personalisation aspects
- Device Agnostic (mobile handset, desktop PC, TV)
- Bearer Agnostic (mobile, broadband, cable)
- Broadcast-quality (of course)

We’ve also mapped out what elements of the service can be delivered today, within 18 months and within 24 months.
The chart below shows how the proposition matches against our IP-Services Revenue Scorecard. There’s a lot more science behind this but for here the evaluation is summarised by traffic lights (Red = Weak, Amber = OK, Green = Strong).

In speaking with Operators around Europe particularly in the last few weeks, it’s become even clearer to us that operators are quite advanced in terms of laying down the technology building-blocks to IMS. However, the area that all operators we have spoken to are struggling with (even if they don’t admit is publicly, which they don’t!) is in developing compelling proposition concepts and the associated organisation structures and processes AND underlying commercial agreements to delivery them.

We believe that new skills are needed for building medium term, value-based, IP-converged service propositions. These are different from the short-term, price-based, circuit-switched propositions we see today.

In the November Edition of the IMS Insider Report we describe these in more detail. This will be a theme we’ll continue with on this blog and in the Monthly Reports for subscribers.

The Editor

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