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NGN Magazine Magazine logo
March 2010 | Volume 2/Number 2
Converged Views

Apple and Google and Facebook, Oh My!

By Marc Leclerc

It's a strange new world as we take our first steps into the new decade. The telecom space is abuzz with talk of recent introductions and announcements by Apple, Google and Facebook. Both Apple and Google have made interesting moves in the area of mobile terminals and connected devices, while Facebook is exploring new ways to turn social networking into cash. Taken together, these movements are creating tantalizing new revenue opportunities for our industry, while also raising anxieties about the impact these will have on established players and value chains.

Let's start with Apple's introduction of the iPad, a device that defies easy categorization. It is neither a scaled up iPhone, nor is it the usual vision of a tablet computer. Perhaps it is more useful to describe it by the experience it provides the user: a device that can be reconfigured by an application to mimic the look of anything of that general size, responds to touch in a way that supports this mimicry and that connects to the Internet or 3G networks to allow it to interact with the greater world around it. With the addition of iBooks to iTunes and the App Store, Apple also provides the iPad with a comprehensive sales channel for media providers, application developers and now print media publishers. Apple is a true believer in the retail model, and used this model to build and maintain quickly genuine user value for its products.

Google has for the first time launched its own branded phone, the Nexus One. It is an unlocked Android-based device with touch capabilities, access to an application store and excellent integration into social networking services such as Facebook and Twitter. It also has launched Google Buzz, which closely links these capabilities to its G-mail offering. All these functions keep the user more closely tied to Google and provide Google a new outlet for advertising, its main source of revenues.




In the background to Apple and Google product introductions, Facebook is working hard to make Facebook Chat the center of the social networking user experience by supporting integration to third-party instant messaging services. Facebook Connect also has received full Facebook Chat support so that developers can bring the chat experience to their own third-party Web sites or applications With all this happening, telecom service providers understandably are concerned that they may be relegated to becoming bit-pipe outlets, and reduced to commodity pricing and margins. However, I think this outcome is far from certain and, in fact, affords service providers with interesting new opportunities to monetize both their network capabilities and customer relationships.

Both retail and advertising models can significantly benefit from interaction with network status and user profile information. With Rich Communications Suite, operators can offer an enriched multimedia communications user experience that includes status, chat and file sharing, and can be integrated with social networking services. In addition, the interoperability and inter-working relationships built up by the global telecoms community makes it possible for users to take their services with them wherever they go.

Telecom service providers also can extend the use of communications-oriented social networking activities into the global telecoms network, extending the community addressable with voice messaging and chat to more than 4 billion people. This creates a huge opportunity for service providers to participate actively in advertising-based value chains, of course getting a share of proceeds.

Credit and credit cards are not readily available to most people in many countries, so the prepaid infrastructure of telecoms operators and their ability to handle micro-transactions efficiently and securely has become a mainstay of peoples' lives, and an essential tool for both commerce and governments. This infrastructure could become a key tool for handling retail sales of media and content, ensuring service providers don't end up in a bit-pipe only role.

A final consideration is that an increasing number of different devices are becoming endpoints for communications services and participating in users' daily lives. These include PCs, Web clients, cars, TVs and TV set-top boxes and more. Increasing available bandwidth with HSPA, and soon LTE, will only accelerate that trend. Telecoms service providers are uniquely positioned to offer users a way to conveniently manage all these vertical platform-based offerings and integrate them into common identity, user experience and payment mechanisms – provided by a partner they already know. While individual platform vendors might aspire to vertically integrated value chains, the possibility of that outcome is decreasing on a daily basis.

So all in all the prospects of service providers are multiplying even as traditional telecoms value chains erode. It's up to us to make the most of this situation, and take telecoms into this new decade of opportunity.

Marc Leclerc is manager of the Global IMS Expert Centre at Ericsson (www.ericsson.com).

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