Mobile Operators are always looking for ways to create new revenue streams and address new business segments. One way to achieve this is to foster a 5G open ecosystem. 5G Telecom Operators should facilitate a system around a broader 5G open technology and an ecosystem which stretches beyond the typical physical provision of services. In other words, a comprehensive digital platform business model may generate economies of scale by aggregating demand and supply. Operators should take the lessons learned from the existing mobile OS ecosystem and adapt it towards a future telco ecosystem approach.
Platforms such as Windows 10, Android and iOS have been built with a clear goal to enable and support 3rd parties to develop extensions of the Operating System and software applications on top of the OS. This has been enabled by opening the OS via common APIs, providing development tools and a flexible environment. Open-sourcing the OS software has already been an approach followed by some major players, e.g., Google for Android. A new market place should, therefore, be created where developers can offer their products, and offer critical developer marketing and support for 5G systems.
5G at scale
For a 5G emerging system, scale is the key. A large and growing installed base of users attracts more API developers. This will, in turn, create more attractive solutions making the OS even more appealing to new customers. This kind of self re-enforcing circle, if done right, has supported Google, Apple and Microsoft to grow their ecosystems to global hyper-scale with hundreds of millions of devices running their specific OS and thousands of application developers. This not only allows for many smaller companies to bring innovation to the market but also helps the rather giant companies grow their top lines.
To transfer the OS model towards the telco industry means opening the APIs for selected technical enablers, and possibly other critical assets along the value chain. This would enable an external developer ecosystem and create scale by joining forces with other Telecom Carriers.
The role of the 5G Operator
Together with providing related frameworks, libraries, development tools, etc., the role of a 5G Carrier is also to enable innovative solutions. These can be efficiently developed in-house or by external developers and partners driving their own business based on the Operator’s network product line. This will allow economic opportunities for every 5G ecosystem player, not only large Telecom Operators. Developers building new capabilities to be included in the portfolio of enablers would also be appreciated and help to make the offering of a common platform even more attractive.
Developers will generate revenue by offering their solutions via a market place to a broad range of consumer and enterprise customers. 5G Operators will benefit from the economic success of developers’ solutions sales as compensation for the provided enablers and tools, based on revenue share, pay-as-you-use, or other models. The existing B2B, B2C, and wholesale business models will be complemented by new multi-sided B2B2X business models. Each 5G Operator can choose to play different roles within the ecosystem ranging from connectivity provider, infrastructure or platform-as-a-service provider, enabler-as-a-service provider, or solution provider for vertical industries.
5G pricing
One of the drawbacks of LTE was that Operators gave a lot away in the value chain for a one-off access fee. To guarantee the incremental value of 5G, Operators must ensure that all the individual components of the network such as access, mobility, security, encryption, service continuity, etc., have their own billing and charging capability. This will certainly add a degree of complexity, but it is a capability that lends itself to a secure, distributed ledger-based solution where there are multiple parties in the value chain.
Scale across global Telcos & collaboration
The attractiveness of a developer platform not only depends on the technical capabilities and support but to a more significant extent on the number of customers they can reach. Therefore, it is crucial to motivate large Operators to join this common approach and drive the ecosystem jointly. At best, this would be possible on a global scale so that solution developers can reach billions of consumers and millions or enterprises of any size.
Appropriate bodies and communities, together with dedicated marketing, could be used to reach and convince as many CSPs as possible. The psychological dimension should also not be underestimated. Existing operators have all these years been heavily competing with each other for consumer and enterprise customers. Now, they all need to collaborate when it comes to default enablers, APIs, and the market place. This cooperative model with the competition is well known from other industries but is not really applied yet in the telecom sector.
