By
Tim Young
Recently, I was introduced to AMC’s interesting and utterly entertaining series Mad Men. For those of you unfamiliar with the series, it’s set in the early 1960s in a world that is rapidly changing. The program’s anti-hero, the amoral Don Draper, is the brains behind a Madison Avenue ad agency filled with relics of the Eisenhower era.
Misogyny, whiskey, and cigarettes abound.
However, the writers also drop in occasional references to the goings-on of the era, and one such nugget occurs early in the first season as Don is having dinner with his wife Betty. “I saw an interesting thing in the Journal American,” he says. “Apparently, the phone company wants to start charging people for unlisted numbers.”
Naturally, double entendres ensue, but the line struck me as interesting as it relates to the topics of alternative revenue sources for communications service providers (CSPs).
In that era of relative monopoly and sky-high profits, telcos were still well aware of the value of privacy and saw the margin in monetizing that valuable item.
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Some of these geese are golden, providing immense promise and possibility. Some of the geese are cooked. |
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Indeed, depending on the specific niche a service provider wishes to fill, their strategy for filling that role may vary. However, bearing in mind that there is a push by many service providers to look to the future and consider how their roles may change down the road, it’s sensible to look at different strategies that may benefit providers looking to diversify.
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Likewise, in today’s market there are those service providers who see opportunity around every corner for new revenue streams to replace revenue that can no longer be depended upon. Meanwhile, there are those CSPs who don’t see their place in the industry changing, and see a shift in strategy as an admission of defeat, it seems.
More than ever, it’s important for CSPs to take a look at the changing business models that are being presented to them as geese. Some of these geese are golden, providing immense promise and possibility. Some of the geese are cooked. Overcooked, in fact.
Granted, there’s no one-size-fits-all formula for what business models work and what business models don’t. I spoke to Nancee Ruzicka, Senior Analyst in Stratecast’s (a division of Frost & Sullivan) OSS Competitive Strategies service, and asked her if there were some CSPs who “get it” more than others. “Circumstances for CSPs are different around the globe and to ‘get it’ means that there is some well-defined “it” to get.”
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Value in the Pipe
One innovative business model that has come up is based around the idea that CSPs provide a valuable service by delivering content to the consumer, and rather than avoiding being relegated to being just a carrier for third party content, CSPs have the opportunity to embrace this “bitpipe” status. “CSPs continue to rail against their relegation to commodity pipe provider status,” said Barbara Lancaster, President and CEO of LTC International, an analysis and consulting firm in the communications technology space. “ We think that there is ‘gold in them thar hills’, and thought for a few brief months… that CSPs might actually embrace their core networks as the nest egg after all.”
Anyone who has attended a keynote or roundtable discussion at a telecom event, at least in the US or Western Europe, in the last few years has certainly heard this point being hammered home by CSPs. As over-the-top services continue to challenge the traditional service provider business lines, providers shift on whether or not they see possibility or doom in playing the role of the noble bitpipe.
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