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From Walled Gardens to the Digital Selfridges: Effectively Leveraging External Service Innovation

It’s plain that operators are not specifically innovating their own services as such. It’s hard to take seriously an operator that argues for creation of replicas of the staggeringly successful services that are to be found in the Internet world. But, many now recognise this and have taken the approach that curating a rich set of services created by external partners and ensuring their efficient delivery to consumers is the best way to go.

Such operators are steadily moving to enrich bundles by creating a kind of digital Selfridges, in which attractive services are delivered to consumer subscribers, with constant renewal in order to retain relevance. The alternative approach is to focus on the lowest prices, which is not a sustainable model for many. Instead of misdirecting effort into internal service innovation, operators can and should capitalise on external innovation and invest in delivering such services easily and effectively to their customers through innovations in service offers. But then, where else can operators innovate? The rich discussions we have held in the past few months suggest three key areas for operator innovation for the future.

To many, innovation in the operator domain seems almost an oxymoron. Indeed, it’s been received wisdom in some quarters for a long period. But, that’s a somewhat unfair view that doesn’t really do justice to what’s going on in the operator domain today.

It’s true that operators are not creating new services that attract mass market audiences. We have to recognise that most of the innovation for these comes from alternative providers of media, content, games, chat, and so on. But consumers still need to be able to access such goodies and, if you look closely enough, you’ll realise that operators are actually innovating at quite a rate.

In our work, we’ve identified three primary areas in which operators are innovating. Services, networks and processes. We’re going to look at each of these in turn in a series of articles, starting with services. To reiterate, most service innovation takes place elsewhere, which tends to mask the innovations that operators do make. First, we have to characterise these and define two key approaches that are being followed and adopted today. Second, we must also differentiate between service innovation in consumer markets and for B2B and M2M applications.

Let’s start with service innovation in consumer focused network providers and operators. As most observers have noted, much of recent service innovation for consumers has not been directed towards specific services per se but rather towards enabling access to better service offers. Content remains King – but whose content and at what price? This is of huge importance. Exclusivity is clearly desirable but not always achievable. It comes at a significant cost.

Indeed, despite local partnerships and arrangements, it’s entirely conceivable that, in the future, providers of premium content that is distributed via broadcast partners and associated networks could be detached from this. In the coming years, what’s to stop UEFA selling individual subscriptions to the Champions’ League directly to the end user, rather than via the current myriad of operator and broadcast partners? However, such partnerships are clearly where the action is today.

In this regard, the attractiveness of one service provider to consumers instead of another is either a function of the partnerships it can forge and deliver to its subscribers. The alternative to such partnerships and relationships is, by and large, a least cost approach. Since being the cheapest is pretty much a race to the bottom, most providers want to avoid this or else use it as a means to be acquired (thus enriching the founders but not the customers). Both models can easily be found across markets, but, the former model of creating and curating a rich suite of preferred service and content providers is preferred by established players with a long history of delivering connectivity and services, as we saw clearly illustrated by Telenor Denmark and Rogers Wireless, among others, at the recent Service Delivery and Innovation Summit in London.

In essence, this approach can be characterised as an attempt to create the best shop in the high street. Consumers are enticed to enter by the attractive brands and goodies that are available but, crucially, consumers are free to leave the shop and go elsewhere; they are not forced to adopt the services on offer but the hope is that they should be sufficiently interesting and attractive to ensure that consumers remain as customers. Ideally, this should more resemble Selfridges than Pound Land (not that there is anything wrong with the latter; it’s just different), as the operator concerned seeks to differentiate on the quality of the bundled options.

It’s interesting that this, in many ways, resembles the old walled garden approach – the difference being that consumers are free to enter and leave the shop as they see fit – but the hope is that they will choose the provider that has the most attractive retail and content bundle. We think this model is the most interesting for the majority of providers. As new players enter the market, then the most appealing external content and offers can be added to service bundles.

The trick for the service provider is to understand and anticipate which new offers should be included and to try to steal a march on their competitors by delivering them to customers first. This means deriving a much better understanding of consumer needs and market evolution. In essence, service innovation should be directed not towards creating new services but identifying which services will be demanded by consumers and being the first to enable better access to them through a process of continuous bundle innovation. In this fight, data analytics has a huge part to play, although it is still an emerging discipline. We’ll turn to this in a further article, as it’s going to play an increasingly important role.

On the other hand, there will always be players that are focused entirely on the cheapest option. There is nothing wrong with that per se, but it will be even more challenging. For this kind of service provider, innovation must be directed towards network efficiency so that the offer can be delivered as cost effectively as possible.

These two models seem to be emerging as the primary approaches we encounter and we can’t see much variation between these two models in consumer markets. Either you have premium content and invest in finding more attractive and appealing services and content from partners, or you focus on being as lean and cheap as possible. However, there is an alternative that, in our opinion provides considerable opportunity and promise. Of course, this is the domain of B2B and M2M services, of which more next time.

Thus, service innovation for consumers is today largely orientated around the curation of rich content and the creation of bundles which enable consumers to discover it with the least effort. In the future, it will require three things. First, detailed analysis of emerging external services. Second, clear understanding of what consumers want. Third and finally, the ability to anticipate what they might need in the future. By effectively combining all three, operators can more effectively leverage external innovation and deliver relevant solutions to their subscribers. Instead of analysing the failure of operators to deliver new services and undertaking a superficial comparison with numbers of users of services, such as, for example, Netflix, Amazon Prime and Facebook, to note just three commonly cited examples, we think it will be much more valuable to focus on how operators can identify, collect and curate the best offers in the simplest way to their customers. In this model, the Digital Selfridges approaches represents an ideal to which they should aspire.

WiFi Innovation at WIS Europe 2015

It is of course a cliché to say that WiFi is ubiquitous today. It’s something we simply expect to be available and we tend to notice it more by its absence than anything else. As consumers, it enables us to stay connected as we move from location to location and has particular value when travelling, as a means to avoid the horrendous roaming charges. For this consumer, 4G is really something to use only when beyond a WiFi access point and seldom when abroad. Besides, when out in the country, mobile data access can rapidly decline to even GPRS levels, so WiFi can offer a much better experience where it is available in these circumstances.

To some extent, this has led to a false debate – regarding competition between WiFi and cellular mobile data technologies. Indeed, there was tension within mobile operators some years ago regarding this apparent conflict (“the wicked stepmother” as one representative from a mobile operator told us in a recent interview).

The reality is completely different. As is now widely recognised, WiFi is a key enabler and complement to mobile technologies. There is no zero sum game, but rather a world of alternatives, which enable us to maximise our utility and capitalise on different modes of access to suit our convenience.

In this context, WiFi is becoming increasingly important as an enabler for mobile operators to provide extended and complementary connectivity. As a result the WiFi ecosystem is growing to accommodate classical mobile operators, as well as established providers of WiFi access services. Added to which we have a host of other stakeholders who see WiFi as part of the means to enable a growing range of other applications, such as for M2M and IoT devices.

WiFi is one of a range of tools that is available to deliver the connectivity we need to service both current and future applications. And, as we have discovered in our research and interviews, there’s a wealth of new use cases and value that will be unlocked from enhanced WiFi access solutions – and to ensure the user experience is maintained.

That’s why we’re delighted to be supporting the WiFi Innovation Summit series of events. The next takes place in Amsterdam from November 24th – 25th and we’ll be presenting as well as moderating several sessions. The event brings together representatives from key stakeholders from throughout the WiFi and mobile industries. We’re expecting to learn about new opportunities, hear the latest on unique research and uncover innovation from across the industry.

If you’d like to join us and learn more, you can take advantage of a special discount that we’ve arranged for our readers. Simply visit and use our special discount code (WISE15RMA) to secure a 20%* discount on the normal entry price.

**20% discount code applies to all rates excluding those already subject to a discount: long distance and government.

RMA announces media partnership at IIR’s Network Virtualization Forum, 15-17 September 2015, Madrid

3373_Network_Virtualization_2015_Forum_160x100As a telecoms and technology marketing agency, RMA is uniquely positioned to report and comment on major technological changes impacting the telecommunications industry.  This is why we have been selected as media partners for the upcoming IIR event Network Virtualization Forum, taking place in Madrid, 15-17 September 2015.

This years’ forum will take place in the Spanish capital, Madrid, with Telefonica acting as the Host Operator.

Since the forum’s inception in 2012, the industries burning questions have been addressed in an informative and collaborative manner. Fast forward to 2015, and we’re no longer asking “What is SDN & NFV?” but more “How can we turn a technology with potential into a reality?”

Over the course of the past few months, we have been gathering fact and opinion on the matter. So far, the most frequently expressed view is that NFV architecture and deployment models are moving into the mainstream. We know that it is coming and we know that it will have profound implications, not just in terms of technology and solution delivery, but also in terms of an operator’s internal organisation and cost base. What remains to be seen is, of course, to what extent?

IIR’s 4th Annual Network Virtualization Forum, Europe will give you the opportunity to not only take home lessons learned from your peers within the industry, but also participate in lively debate to define the future of the technologies themselves.

Get in touch with us to learn more about our role in SDN and NFV.