Ng Connect’s Broadband Industry Convergence Opportunity

By Rich Terhani

In 1998 I was walking the halls of a prepaid calling card trade show in New York’s Javits center and I mentioned to one of the vendors that the future for service providers was enhanced services. The reply from the vendor was blunt. “Service providers don’t want to sell enhanced services,” he exclaimed.

Indeed, a decade later, I have seen dozens of really cool services which just don’t get rolled out in America. Sometimes they do emerge in Asia but never in the west. Exceptions – SMS and ringtones – seem almost silly in their simplicity and grotesque in their profit margins.

IMS was supposed to change all of this by allowing a framework for developers to give us the next generation of sticky, viral applications. But this hasn’t happened yet. This is partly because of the slow adoption of IMS and partly because the service provider culture is far removed from that of rapid application development.

And then there is the app store craze launched by Apple and allowed by AT&T. Can service providers ever profit from new services when app store apps are so compelling? And free?! Don’t forget about Google (News - Alert), the search leader that never met a service it didn’t give away for free. Just how do you compete with an army of iPhone and Google developers if you are a provider? Can you launch a better Facebook (News - Alert)? Twitter? Even if you could, how do you generate SMS-sized revenue if these two web juggernauts can’t?

But from a revenue perspective, does it even matter if the carriers have the walled garden they once sought? Perhaps not, if the growth of wireless broadband continues at its current rate. Just think of it, the majority of people in the developed world want at least one wireless broadband-enabled device. Some, like me, have two devices — one for typing like a Blackberry and another for surfing like an iPhone (News - Alert). Then there is the Kindle, another broadband-enabled mobile device which lets you read your books, newspapers and blogs on the go. What’s next? What other devices, applications and services will become popular and drive ever-more service provider revenue?

These are the sorts of questions being asked and answered by the new multi-industry ng Connect Program, founded by Alcatel-Lucent (News - Alert). The goal of the group is to establish a rich and diverse ecosystem of infrastructure, devices, content and applications for both mobile and fixed broadband networks including 4G, LTE (News - Alert), GPON and other ultra high bandwidth technologies.

The group will accelerate deployment of new devices and services by helping to determine interoperability across industries such as automotive, entertainment, wireless and consumer electronics. One area where there is a need for better integration is consumer electronics and automotive where in many cases a simple headphone jack is the extent of the integration – or, even worse, a car’s stereo system tuned to a predetermined FM frequency to play music from a handheld music player attached to an FM transmitter.

The value proposition for members include access to research, reduced development costs and a first mover advantage across markets. For carriers there is the increased use of broadband, reduced OPEX (News - Alert) and churn and accelerated time to market.

For consumers the benefits include better integration of disparate entertainment systems, a higher level of value for devices which are part of this initiative, enhanced payment options and perhaps lower cost for a variety of next-gen services and devices. Other participants in this association include HP, Samsung (News - Alert), and 4DK, Buzznet, chumby, Connect2Media, dimedis, FISHLABS, QNX, SIGNEXX, Total Immersion, TuneWiki and Words & Numbers. My thoughts are that the group is filling a much-needed void but it is biting off more than most groups and success will be a challenge. I am encouraged by the participation of Samsung and HP but this group needs many more big names before it has a chance to make a dent in the disciplines it hopes to bring together. Sony, Dell, Microsoft (News - Alert) and Google are obvious targets and Apple is needed but I wonder if they think there is a benefit in joining forces with any of these companies.

So the opportunity is there and service providers – if you are smart, you will watch this group closely and get involved at the appropriate time. It should be obvious that the next-generation of devices, services and media can generate much more revenue. As consumers look to have their media delivered on a variety of devices, we have seen they will pay more for the privilege. If this group can insert itself appropriately and accelerate this trend, all members should be able to benefit and I hope I can finally prove to that random trade show guy that I was right.

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