The embedded SIM: Operator opportunity, or operator threat?

The ability to offer these new devices and associated services (with data connections and appropriate network quality of service bundled in) has the potential to create a lucrative new retail market for operators, not only in lifestyle and fitness trainers, but child/pet trackers, environmental sensors, and countless other entrepreneurial initiatives we have yet to see.

Rather than watch this happen around them, many operators are keen to drive and create that collaborative network of partners and businesses, in the process becoming the hub for connecting the devices to complementary services and solutions from other providers. 

Today’s mobile devices are being used for an ever-widening range of tasks, and that gives mobile operators priceless insights into their customers’ behaviors. From the music they love to the places they visit, from their shopping habits to their favorite screen shows, operators can in principle monetize this customer data by building new markets and suggesting valuable and relevant add-on services – something Amazon pioneered with its "people who bought this also considered this".  That drives extra purchases through effective leveraging of customer insights.

By becoming the collaborative hub for devices, partners, apps and services, operators can embed themselves in the solution and claim a pivotal position in this developing marketplace.

To unlock this new market, operators will need the vision and the capability to transform their IT capabilities – both in-house and in the cloud – in order to make the creation of multiple ecosystems fast and simple.

This is a challenge because traditional operator BSS solutions are too often siloed in their approach – they are not designed to be flexible, agile, or open to partnering. Operators will therefore need to take a new approach to their BSS, and plot a course that enables them to adopt open collaboration methods and simple API-based connectivity to cloud solutions.

Research conducted in this space by consultants Northstream indicated that if operators could open up their systems and enable a more collaborative approach with potential partners, it could be worth around €2.2bn annually in increased net cash flow for Western European operators alone. 

The new generation BSS and Enterprise Business Operations Support Systems (EBOSS) can enable operators to build collaboration platforms that support faster integration at lower cost. This means that operators can increase the number of partners they work with and be more flexible in creating "mini offers" that appeal to a wider range of customer segments.

The advent of the embedded SIM provides a real opportunity to build new markets around devices and partnerships that would create even greater rewards and turn the operator into a provider of digital services.

Here’s an example of how much room there is for improvement in the digital services space. Take a cookery website that offers a link to a supermarket so that you can buy the ingredients for a particular recipe. That’s very helpful – but maybe the link does not appear on every recipe, and perhaps the site only features one or two supermarkets that don’t happen to be your favourite ones. On top of that, all the link really does is open the supermarket site and – if you’re lucky – have the ingredients pre-selected.  The shopping experience is still quite disjointed.  For example, the supermarket site cannot suggest additional items for your basket based on your browsing history at the recipe site.