Research Notes

Premium services delivered and invoiced via mobile broadband connections are coming

– but what challenges is the industry facing when this technology becomes commercial?

At Strand Consult we have through the years worked a great deal with premium value added services and many operators around the world have based their strategy on our reports about how to become successful with premium SMS.

In new report Show me the money – The future Business models for mobile Broadband Services we have taken a closer look at the new possibilities that will emerge with the introduction of mobile broadband. We have looked back at the experiences from the premium SMS market and put forward our theory on how the future market will look.

Implementing the BCAP model, which we call this business model, will result in the various market players in the value chain facing a number of mental challenges that they already now should start contemplating.

If you examine the technological challenges, this technology is identical to that being used by mobile operators when they handle IP billing on mobile phones that do not support WAP. In practice, the customer’s temporary IP number is linked to his mobile number, thereby allowing the operators to handle the billing.

If we made a list of the 10 largest challenges that we currently have identified, the list would look like this:

1. The operators understanding of the possibilities that the BCAP model – and thereby premium billing via broadband connections – will give them regarding the supply of services and subsequent revenue.

2. The education of the value chain, in order that it understands and implements the BCAP model in a sustainable fashion. This is about creating an ecosystem of market players that together can create value for customers.

3. In which countries will the model conflict with regulation regarding credit card payments and other types of electronic payments?

4. How will banks and credit card companies view this type of competition?

5. Designing business models that will make it attractive for all parties to be active players in the value chain.

6. How should market regulation be handled (self regulation/public regulation) and how should one ensure that children and other weak groups are protected against content providers that have little regard for end users?

7. Limiting what types of services can use this model. Are erotic content and various types of gambling interesting as services, where is the limit and who makes the rules?

8. What happens when an end user roams on another operator’s network abroad? How should payment be handled and how will the parties actually handle data transmission and who should share the revenue streams?

9. Net neutrality – How will operators handle the players that use the BCAP model compared to those that use some form of direct billing? Will operators offer their BCAP customers a better and increased functionality than those that just view the mobile operator as a dumb bit pipe? Will operators bundle billing and QoS together into one product?

10. Who will handle the technical integration between content providers and operators? Will it be the operators themselves or gateway companies like those doing business on the premium SMS market?

We believe that it is important to utilise the experiences from the mobile services market, when designing the framework of the mobile broadband market. One thing is certain, and that is when the billing technology is available, then there will be services and providers that will be focusing on this market.

In the report we have taken a closer look at how this market has developed up to now and how it will develop in the future. Using our experience we have published our suggestions on how to solve these ten challenges.

If you would like more information about the report Show me the money – The future Business models for mobile Broadband Services, please do not hesitate to contact us and learn more about how the mobile broadband currently looks and how it is developing. In our world knowledge is the path to success – and we make a living from selling knowledge. 

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