New customised services such as cloud-based, real-time, high definition (HD) video will become one of the main sources of operator revenue in future as voice, SMS and data income streams decline.
Operators and service providers have an urgent need to identify new areas of business where they enjoy unique competitive advantages. This is essential if they are to continue to be competitive and successful in the era of OTT competition, 4G, VoLTE and 5G networks.
Speaking exclusively to Developing Telecoms at CommunicAsia 2016, Vincent Zhao, President of Cloud Core Network Marketing & Solution Sales Dept said real-time, customised, customer centric cloud services are one of the most important areas where operators enjoy strong competitive advantages where they can’t easily be challenged by OTTs. Developing these types of services will enable MNOs to successfully redefine their business models over the longer term.
Operators and service providers face a range of challenges as consumer behaviour changes. Applications such as WeChat and WhatsApp are decimating voice and SMS revenues while YouTube and other global OTT entertainment services are rapidly increasing demand for bandwidth. At the same time the price consumers and enterprises are willing to pay for all services is static or declining.
These trends are not limited to changes in consumer behaviour. In the enterprise space, Huawei predict that 70% of SMEs in developing and emerging markets will migrate some or most of their services to the cloud within 5 years. Moreover 95% of enterprise and vertical market cloud applications will be open source, severely limiting the potential for operator and service provider revenue generation.
Operators and service providers do have a number of strengths. Not least among these is the relationship with the customer. Both consumers and enterprises continue to place a high level of trust in the relationship with their operator. Operators also enjoy a high reputation for data security with their customers.
According to Zhao, as network capacity and intelligence grows with 4G and 5G, operators are ideally positioned to exploit the unique customer relationships and access to customer data they have and offer new services which can’t be replicated by OTT players.
Data protection legislation, security concerns and the need to respect customer wishes prevent this information being shared. This places operators in a very powerful position to develop new services using this data.
By better understanding customer needs through cloud-based data aggregation, operators can provide an end-to-end and fully integrated communications solution for personal, enterprise and key market verticals. This will enable operators to implement network evolution, service innovation and business model transformation.
Huawei believes that if operators and service providers are to maintain their businesses they must develop and build new services based around these positive attributes. New services will need to be focused in areas where operators enjoy unique advantages and which can’t be challenged by OTT providers.
Zhao identified two areas where Huawei believe operators enjoy unique advantages: the ability to work in real time and the ability to tailor services based on the unique real time information that operators have exclusive access to, such as location.
As a result, the company is launching a range of new cloud-based services. Based on a unified cloud platform, the Huawei Cloud Communication solution is set to redefine user experience.
The Cloud Video solution, targeted primarily at operators’ consumer customers, aggregates various video capabilities of operators, such as video call, recording, encryption, and analysis. It provides large-screen video communication for families as well as services in verticals (for example, telemedicine, remote education, and video customer services). This solution helps operators make video services as a new basic service, thus increasing revenue.
The Cloud Video solution has already been deployed by China Mobile in Fujian. Users of the service can gain access to cloud hosted live video feed of junctions along their route to the office. China Telecom are also using the technology to offer a service called Miss-Home in Sichuan to provide subscribers with an HD video stream to link back to their families and keep in contact through their smart phones.
The Enterprise Communication solution integrates all communication methods and scenarios and provides a unified architecture and management system to offer the same communication experience for different enterprise users. The solution supports the deployment for private cloud, public cloud, and hybrid cloud. It helps enterprises build their own communication and collaboration platforms as needed, heightening competitive edge and efficiency. In addition, Huawei provides a variety of terminals to meet requirements for different scenarios such as meeting rooms, office desktops, SOHO, and business trips.
The CaaS (Communication as a Service) solution promotes crowd-sourcing service innovation as well as business model transformation, helping operators implement ubiquitous communication and build an industry ecosystem through APIs and SDKs. By bringing message, voice, video, conference, and collaborative communication capabilities as well as user data to different applications, operators can implement ubiquitous connections and communication between humans, things, and organisations. Embedding communication capabilities into the business process improves enterprise efficiency and service innovation.
Huawei has established a comprehensive alliance, with over 1,000 partners across more than 17 industries. According to Zhao, these independent locally based app developers can draw on unique local knowledge and expertise as to the services most in demand by subscribers.