5G Rollouts Are Well Underway, There Is Still Time To Ensure Your BSS Can Help You To Target Offerings, Support Customer Experiences.
As 2020 concluded, Ericsson ConsumerLab (together with Omdia) published a study; Harnessing the 5G Consumer potential, which details predictions around the 5G consumer revenue opportunity for service providers over the coming decade. Many individual aspects of communications are evolving rapidly. For example, ever-increasing video streaming and embedded video.
The consequent growth in subscriber numbers and viewing time per subscriber, advances in mobile screen resolution, the proliferation of wearables, and uptick in mobile edge computing all place increasing demands on networks to transfer greater data volumes at faster connection speeds with less lag. “Adjacent digital services” encompass new services, new applications and additional content that’s emerging for consumers as the 5G rollout continues. They are “nascent” or peripheral to service providers, meaning that service providers have some new variables to contend with in the pursuit of customer centricity.
There are myriad use cases still to come as 5G’s efficiencies and innovation possibilities lead to new services that haven’t even been imagined yet. Early 5G use cases are already rolling out, and the smart move for service providers is to get the necessary preparations underway so they’re well positioned to monetize existing and future use cases.
Being able to define and deploy new services quickly will be key, as new waves of services will rise and fall. They will follow the technology adoption pattern, with innovators, early adopters, and an early majority adopting before the late majority and laggards. And there will be a limited window of opportunity to mobilize to monetize each new wave before it subsides. By the time the majority come on board cost efficiencies must be established. High expectations around what is “free” also continues to prevail, and alternative business models beyond consumers paying for services must be supported. Ideally, the business case will be robust from the start, but while experimenting with new services and business models an element of trial and error is inevitable.
To enable all of this, BSS must be agile enough to make changes rapidly to ensure mass adoption is profitable. In addition, the anticipated variety and diversity of use cases further mandates agility to bring new offerings to market quickly and to respond to (and preempt) competitors taking new services to market with collaborating counterparts.
The report also explores the financial opportunity in the consumer space, which is clearly visible. And the time to act is now. According to the study’s findings, With a proactive strategy, service providers can directly generate USD 131 billion by 2030 from digital service revenues and could gain a 34 percent higher 5G average revenue per user (ARPU) by 2030.
Furthermore, the consumer market generates a higher share of wireless service revenues and 5G could help arrest mobile revenue stagnation and present an opportunity to gain a competitive advantage. So, while 5G rollouts are well underway, there is still time to ensure your BSS can help you to target offerings, support excellent customer experiences and make consumers hungry for more throughout the coming waves of new services.
Go beyond connectivity and establish true relevance
Some of the shiniest use cases, in terms of business opportunity, in this report are in enhanced video, advertising, in-car connectivity (B2B2C) and extended reality (XR). What’s still not clear here is the magic blend of business models (who pays what to whom), pricing and offering strategies that will maximize monetization opportunities. It will likely vary across services, geographies, markets, customer segments and over time. The same service could potentially go to market in a variety of ways with a variety of different partners. That’s going to put some pressure on the product catalog, which needs to drive business configuration across the interconnected order management and activation systems both internally and externally, or time to market will suffer from bottlenecks.
A proactive approach is essential to maximize the revenue potential of 5G consumer services
To tap into the potential USD 131 billion (by 2030) from digital service revenues identified in the report, service providers need to proactively develop relationships, partnerships and business models with ecosystem players and proactively market new services to consumers. Communications service providers should see use cases and digital services as a way of differentiating their 5G offering. The report notes that service providers need to rethink pricing models to put content and service benefits at the center of the 5G price plan. There is an opportunity to drive ARPU uplift by pricing for speed, and other network characteristics like latency in the long run but digital services centric pricing models offer the best opportunities to create 5G differentiation.
5G will create opportunities to pack a powerful punch with interesting new bundles
Bundles are used extensively to keep consumers’ interest and loyalty intact. They can help engage consumers with new services or additional services. They can help educate and inform the market by demonstrating and trialing new services and encouraging uptake.
The power of bundles is set to increase exponentially as more 5G comes into play and innovations in network capability and surrounding technologies mean additional digital services and physical equipment can be bundled, such as: AR/VR headsets, wearables, games and applications subscriptions, and anything else connected to the internet of things. The permutations and combinations of hard and soft bundles are endless, and they need to be managed effectively.
Be smart: get creative and customer centric
Create bundles not around the technology or network capabilities, but around something that matters to the consumer. Digital services and experiences can be bundled in combinations of stadium or event experiences, AR/VR apps, online live experiences as well as on demand, IoT and enhanced video streaming, etc. e.g.
- Smart home, maybe within a family plan, with smart operations, monitoring or tracking of pets, children or household items
- Home working, maybe FWA combined with relevant digital services and subscriptions
- Leisure activities: gaming (e-sports), education, sport, or music.
5G is an ecosystem play. The classic B2B and B2C markets will be bolstered by a burgeoning B2B2X market, and consumers are set to see an explosion of new services coming both directly and indirectly from their providers. We’re seeing this in market launches as market leaders bundle 5G rich services in with data plans: FWA and 5G Home from Verizon, 5G for prepaid from STC, 5G for youth from Vodafone Italy, cloud gaming free for one month for 5G customers from Sunrise Switzerland, a Melody VR Oculus Go VR headset bundle from O2 UK offering consumers the chance to watch live music events in VR.
Diversity of 5G Pricing Models
And there’s scope for so much more bundling with 5G to sell adjacent and add-on rich services and to upsell bigger data packages too. Examine three 5G consumer use cases, associated business models and the implications of these scenarios for BSS. Download the eBrief “Getting creative with 5G business models”:
Remove friction from data flows, interactions and experiences
Moving forward, the continued pursuit of customer centricity will shine a light on customer journeys and their associated data flows with a persistent reduction in friction so that experiences are smoother and data flows to where it needs to go. And we should take a broad view of “customer” here, it’s not just the consumer as an end user, it’s partners and employees too – or anyone using the systems of record and systems of engagement that comprise BSS.
So, telecom BSS needs to include intelligent and contextual awareness of both the network and the consumers, with loosely coupled components in cloud-based architectures for elasticity. Intelligence will lead to better recommendations and targeting of offers, improving the consumer buying experience. Openness will underpin the rapid creation of new services, with BSS capabilities exposed in a simple, effective and secure way, from user interaction and charging to catalog management through APIs.
Agility matters too, as failing fast (and pivoting if needed) is central to mobilizing, managing and maintaining profitable services in collaboration with an assortment of ecosystem partners. Only with these fundamental tenets inherent in BSS will truly innovative approaches thrive, as partners and third parties extend services beyond service provider capabilities with their own expertise. The way forward is to design for ease of use, speed and scale.
This news was originally published at Ericsson.