Research Notes

The Perfect Mobile Service Delivery Platform Environment is a big puzzle

– the question is, who should put the pieces together and how?
Many people are speaking about the market for mobile services and it’s importance for the future of the mobile operators. However, very few people are focusing on what is necessary to create this market. Even on the global market, a mobile operator cannot find one single supplier that offers a fully integrated and comprehensive “perfect service platform environment”, that contains all the relevant service platforms. Therefore, mobile operators need to build their own service platform environments like a puzzle where each piece of the puzzle – in the form of service platforms – has to be purchased from many different providers. This lack of a standardised “perfect service platform environment” gives the market flexibility in the form of competition amongst service platform environment providers – but the disadvantage is that there can be lack of compatibility between competing platforms.  

Today, all mobile operators are very aware that an ever increasing share of their total turnover will have to be created through increasing sales of premium rate mobile services – and every Western European mobile operator also knows, that this goal is not easy to achieve. The complexity of this goal is partly due to end-users becoming increasingly more demanding and selective in their choices of mobile services. But also the complexity of selling advanced premium rate mobile services is being caused by the mobile operators facing a significant challenge in connection with establishing a service platform environment, that effectively can distribute exactly the advanced mobile services that modern mobile customers are demanding.
That mobile users over time are becoming more experienced in using mobile services, also means that they are becoming more critical in their assessment of the services and their. This means that mobile users will require more and more advanced and attractive mobile services, if they are going to continue to increase their purchases of mobile services. Customers demands for more advanced mobile services puts pressure on the mobile operators, mobile operators will need service platforms to deliver these advanced services across many different mobile handsets.
In this connection the mobile operators find themselves in the middle of a paradox. On the one hand there have theoretically never been better technological possibilities to develop and deliver unique mobile services, but on the other hand there has never before been a larger challenge in connection with the practical job of piecing together the mobile operators’ service platform environment, so it can support the unique mobile services technological demands. The new generation of advanced mobile services require an ever increasing integration between the mobile handsets, the mobile network and the service platform environment.
The mobile players ability to handle this integration will decide the scope of the growth of the future sales of mobile services – because the service platform environments will be the backbone in connection with developing, production, delivery and marketing of future mobile services.
Strand Consult has just published a new report that analyses in depth the central interaction between the service platforms and the next generation of mobile services. The report ”How to get success in the 3. generation VAS market”, focuses directly on all the essential issues and challenges that the mobile market are facing in relation to the service platform environments importance to the continued expansion of the market for mobile services. The report contains a comprehensive breakdown of 10 different existing service platform environments and each environment is carefully analysed -examining their advantages and disadvantages.
The reports analysis of the world’s 10 best known service platform environments shows that none of them actually offer the mobile operators the “perfect service platform environment”. None of them offer a “one-stop shop” in the form of a total offering of all the service platforms that a mobile operator could need.
The “perfect service platform environment” must consist of a Service Delivery Platform (SDP) that is so flexible that it does exclude any players in the value chain. In other words, the SDP must be both mobile handset-, mobile network-, mobile operating system- and mobile service independent. This will ensure that the service platform environment can distribute the most possible types of services, to the most possible mobile customers. No suppliers currently offer such a flexible SDP, which is unfortunate as it limits the content providers’ access to the most possible mobile customers
In relation to each other, the suppliers of service platform environments are in tough competition, all trying to gain competitive advantages by developing ever increasing complex solutions – but most of the service platform environment suppliers have neither the resources nor the market strength to internally develop all the necessary service platforms needed for a “perfect service platform environment”. This is why mobile operators currently have to purchase different service platforms from different suppliers, to piece together their service platform environment.
There is no doubt that the competition amongst the many suppliers of service platform environments will, in the near future, lead to a consolidation, as survival on this market will require optimised distribution power and better integration of more different service platforms within the service platform environment. It will therefore be necessary, that the service platform environment suppliers – to achieve success – will have to focus on consolidation and an ever increasing cooperation with third party suppliers.
The competition between the individual service platforms will also mean that providers must offer the mobile operators new and attractive business models. Our report also shows that some of the providers’ revenue, when delivering their service platforms is increasingly based on revenue sharing. In this way the mobile operators’ payments for a service platform become solely dependent on how much revenue the service platform generates. This model is advantageous for the mobile operator, as the platform does not cost anything before it generates revenue from sales of mobile services. The model also ensures that both the mobile operator and platform supplier have common financial interests in promoting the platform and focusing on sales of services via the platforms.
Mobile operators today face a huge challenge in connection with building and attractive and smooth running service platform environments and each supplier of service platforms is also facing a large challenge in connection with attracting the mobile operators as customers. At the other end of the value chain, mobile customers can lean back and enjoy the prospect of many new, innovative and interesting mobile services that will be coming just around the corner.

How to get success in the 3. generation VAS market

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