Mobile value-added services have historically meant any kind of service beyond voice where the service provider could charge an additional fee. Because it was “value” and it was “added” the thinking was to charge extra for the added value. And these value-added services at one time produced revenue in the double-digit billions of dollars for the mobile service providers. This included SMS until texting became a commodity, and then all kinds of interesting applications such as color ringback tones, mobile music, gaming, etc.
3G networks ushered in the era of everything is data, where applications that utilized the data network to add services started to put a dent into these service provider-controlled VAS. For instance, the go-to messaging method went from texting (offered by the service provider) to Facebook, WhatsApp, Skype (News - Alert), Twitter, Instagram (apps simply running on any data network). This is a very different paradigm indeed, and one that has rocked the service provider world.
What are some ways that service providers can expand their VAS? Let’s first look at today’s LTE (News - Alert) world from a rich communication services perspective because that represents the mobile service providers acknowledging the impact of the stand-alone app providers and trying to do something about it. RCS provides chat, voice/video over IP, content sharing, file transfer, and social presence sharing. In other words, you can make phone calls, but it’s also a pretty standard social media messaging platform that would be offered by the service providers.
This is an uphill climb for sure, since these other applications are out there, stable, and have huge installed bases. But given the service providers still control the service, there is an opportunity to push RCS where there are mobile subscriptions. At any rate, RCS provides basic messaging services, but there is also still an opportunity for traditional value-added services on top of RCS such as voice/video conferencing or even voice mail. But beyond RCS, there will also be a need to provide value-added services for the subscribers. Whether they are willing to pay for them or not, it is hard to tell right now.
Looking at the subscriber from a different perspective, that is, one who is going to use the mobile device as an on-ramp to the internet, the service provider can embrace the internet model of making money: bring the internet advertising model to the phone and extract value add from the advertisers instead of the subscriber. Half of all internet traffic is from mobile, which means there’s huge opportunity for location-based advertising. I’ve started to see mobile ads now, and given the prevalence of ads when accessing the internet from our laptop, I’m not as taken aback by ads on my phone as I might have been at one time. The time is probably right now for this. Another page out of the internet book is providing a freemium model for value-added services. Maybe a three-person conference call is free but another over is chargeable. There are many variations of this.
Obviously, analytics play a large role in the internet model of making money, and the service provider would have all kinds of data available for that as well. In my last article in this magazine, I also wrote about IoT and real-time communications, which included examples about different kinds of value-added services that could be offered, from real-time communications in connected cars to smart health. This whole area of smart homes, smart cities, smart cars, etc., is a huge value-added service that is in the inception phase and will only grow.
From an enterprise value-added services perspective, again, starting from a traditional viewpoint, voice conferencing could be a good one. Enterprises still need to host conferences, so conferences that can be on-demand would provide value. Adding video to a voice conference, and enabling collaboration to that conference, would be even better. Expanding out a traditional service like this is a good example of a VAS that a service provider could offer and get paid for. The on-demand piece above is crucial. This is an example of a cloud-based offering that can scale up and down. So applications that can live in clouds where enterprises can pay more or less depending on usage is a part of the new era of applications.
Enterprise themselves would also be ripe for different kinds of value-added services. Call recording is becoming the norm for just about everything now, so cloud-based call recording is clearly a value-add. Adding video to the IVR in the form of visual IVR is also an example of a service that would need to be added.
In short, there is still a large opportunity for value-added services with advanced networks like LTE. Even though these are data networks, and there will be applications on these networks from third parties that are not offered through the mobile service provider, the mobile service provider still will provide value-added services to both individual subscribers and enterprise. They will just be different than the traditional services.
Jim Machi is SVP of Product Management and Marketing at Dialogic (News - Alert) Inc. (www.dialogic.com).
Edited by Stefania Viscusi