I have been reflecting on the discussions in Telco 2.0 blog on their telco business model based on the two-sided market theory. Essentially the business idea is to to extract behavioral information and trends about tastes and usage of users from data found in the operators’ databases (i.e. Call Detail Records – CDRs) and make it available to downstream service providers targeting the user base of the operators. Thus, operators act as intermediates between buyers and sellers in the telecommunications content/service market. Ofcourse the extracted information can be used by the operators’ retail team to market successfully new content services to their existing subsribers.
If you put it in a wider perspective, the Telco 2.0 notion can be extended further. Telecom operators may not only focus on extracting information from their own data but they may also colaborate with social networks to gain additional insight on their clientele. Combination of network data with social profiles can achieve a better understanding of their subscribers’ preferences. More and more internet users (both fixed and mobile) are using social networking sites to keep contact with their peers (colleagues, friends, familly), share their preferences, discuss matters of mutual interests, etc. Social networking sites contain a wealth of information which is made publicly available by the users themselves for professional, social and other reasons. Proper alignment of information found on social media with data found on telco’s network can create a much better picture of what the end-customers like, detest, are interested in, or favor. Thus, content provision can more effectively address the needs of the masses (categorized by as many attributes as desired – e.g. demographics, education, profession, hobbies etc) and at the same time be tailored to the special needs and wants of individuals.
The concept can bring about benefits for all parties. Customers will enjoy services crafted for their own personal wants, services that are location, age, hobbies-aware and are even focused for example on their at-the-time mood. Service providers will create better services and attractive pricing schemes. Telcos will harvest a great opportunity for additional revenue streams and potential extra revenue for their existing content services. Finally, social networking sites will leverage on their free services by offering added value to their users while eventually being able to capitalize on their business. Imagine the prospects that stems from linking frequent updates and accurate profile information in social sites with enhanced, good quality, value-adding content services.
Certainly there are several issues open, e.g. IT, partners coordination, implementation, policy implications, privacy concerns, etc. An interesting thing is if and how this could fit with mobile and/or fixed operators’ current business models, or even further, whether the concept is a better fit for wireless or fixed operators. Whatsoever, the point is that if appropriately applied, this business model has the potential to revitalize the “services-for-free” market (not only social networking sites) and encourage high quality, enhanced broadband offerings.
