Learning from History — or Not.

By Grant F. Lenahan
George Santayana, philosopher, poet and critic, opined that, “those who cannot learn from history are doomed to repeat it”. So, to now quote John Connor, from The Terminator, “Are we learning yet?”

Let me take us back a few years. In the 1980s telcos more or less ignored the Internet. ISPs provided RADIUS access over dial-up telephone lines, took the money, and left telcos with $8 per month lines that had 3000 minutes of use on them. Worse, the ISPs more or less gave away the even bigger money, the value-added applications that resided, by and large, on web pages. Remember that today’s ISPs are usually telcos of some form, whether wireless, cable or traditional fixed broadband.

The mobile world began to learn. But their initial solution was to have “walled Gardens”. Since consumers found this unattractive, this strategy didn’t work very well either. Subsequently, most mobile operators have begun to open up their 3G networks to traditional ISP service, and are at least raking in more data revenue. But they remain, if not dumb pipes, slow learning pipes.

So now the question is — will Network Operators ever truly become Service Providers?

I believe that in order to succeed, telcos, if I may use this word for all the communications providers, need to rethink what they are good at, and focus on adding value by developing these core competencies into widely used, and useful, service enablers. So what are these enablers? It may be easiest to begin with what they are not. Telcos are not media companies — they don’t create nor own music, films or information. They are neither banks nor retailers. So the value accrued by music, tools, and financial transactions themselves are largely off limits.

But, on the other hand, telcos can add a lot of value to those services. They can ensure that transactions are secure. They can bill on behalf of others. They can provide protection for minors from adult materials, and help merchants find consumers in their geographic vicinity. Similarly, telcos have ID, address and routing information that can make true multimedia more seamless, and session control capabilities that can support advertisements, offers, controls, etc. All of these are capabilities that are intrinsic in the network. Telcos can do these better than websites can. For example, a telco could provide proxy authentication and authorization for all sites and merchants, significantly reducing the security risks, and improving the user experience (no more passwords to remember, no more credit cards to change in 35 different sites …). Priced right, these are natural value-adds for telcos, and natural outsource functions for information, content and entertainment companies.

This is a simple value chain, and on the surface looks easy. But it is a different model for tradition-bound companies. So it may be harder than it looks. Not only must they evolve such models, but they must migrate famously inflexible supporting operations processes to support these new models.

Some parts of the industry already know this and are working toward solutions. For example, the TMForum has a series of initiatives, from its Service Delivery Framework (SDF) which seeks to improve the processes and management of SDPs, to efforts to define 3rd party APIs and the web-based operational processes that must surround them; to the Content Encounter, which prototypes this very same value chain.

So the pendulum has swung both ways — from totally open but dumb networks, to nearly closed networks, and now seems to be settling in the middle, where service providers concentrate on functionality for which they have real economic and technical advantages — areas like charging, authentication, authorization, location, presence, mobility, identity, session control and (broadly) policy.

The opportunity to make the consumer’s experience better, safer, more secure and more convenient is large. Content, information and online transactions are huge growth areas. And if we know what we do well, versus what we don’t, traditional service providers can move up the value chain — but this time as partners.

Let’s make it a success this time.

Grant F. Lenahan is Vice President and Strategist, IMS Service Delivery Solutions at Telcordia Technologies, Inc. (www.telcordia.com).

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