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2009 FTTH Revenues –New Business Models” “Building
“Building FTTH Revenues –N Revenues –N Business Models”
Document describing about the creative ways to generat revenue & innovative business models to address the ma demand
This paper exemplify the thought of of building building the top line for FTTH solution prov emphasize on the Services and Marketing strategy for the Solution provider alon market acquisition strategy, practical scenario of of FTTH FTTH Solution and marketing tion. An innovative idea for the Revenue Generation and unique Business mode
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“Building FTTH Revenues –New Revenues –New Business Models” “If you “If you have to sell more toothpaste, increase the diameter of the of the tube, it will increase its use per Building FTTH Revenue – Revenue – we have to utilize the capacity of the of the fat pipe. The complete world has
braced IP platform and the today’s network really don’t discriminate the type of traffic of traffic it is carrying with this advantage in place we have to look beyond the established norms of offering of offering the vanilla play services to our customers.
Building FTTH Revenue – Revenue – “Creative Ideas” Increasing the Revenue per user and Margin per user
To take an analogy from the past and predicting the future, earlier Communication requirement television (cable TV) was offered by different operators in the same area, it has created problem
Customers as well as the operators, as a development the two services got converged and the Telec operators have gazed into the opportunity of addressing of addressing the TV requirement of the of the customer and earning more revenue and average margin per user.
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This was due to the more efficient utilization of the of the network infrastructure. Presently voice video
data are offered in a package. Keeping the same in mind, it can be envisaged to have a bundled solu
of Triple of Triple play and VAS to the end customer, which presently he is taking from different service prov
In my view, the success and wide adaptability of any of any access technology is governed majorly by follo factors: 1. Market reach of Technology of Technology 2. Technical capability of Technology of Technology 3. Value added Services supported on the network 4. Business case of “Services of “Services offering” to the Customer
With the enormous traffic carrying capability and the open network architecture of FTTH, of FTTH, it can sup
the convergence of the of the Triple play services with the value added services like intelligent home solut automation and the fixed mobile convergence and it’s definitely going to fetch more to the Telcos
FTTH service operator. It’s like a merger of two of two different worlds and convergence over a single platf the new system would be coming something like this:
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Amongst all, FTTH technology can provide the best and seamless solution to the customer and Telc will also realize the ability of the of the same to get integrated with the legacy network and the existing
tion support system and the business support system can be utilized for the carrier class (5 9’s avail ty) services to the Home users. Building FTTH Revenue – Revenue – “Service Package to Customer”
In the present scenario “Customer is the King” and with the cut throat competition this is going the one of the of the differential edge creator for any one, in this we can offer:
1. Triple play services of Voice, of Voice, video and Data and associated VAS: catering to the requirem of Voice, of Voice, Video and Data and application like Audio/Video conferencing, Online gaming, file sharing, access content from a locally hosted server and many more next generation tions.
of ” security” to our customers by offer 2. Security : An offering where we are serving a sense of ” the visitor management, surveillance, remote monitoring etc. of requirement by customer, the list of the of the offering is limitless and 3. Comfort: second level of requirement ways an intangible feeling to the customer which actually discriminates your services from er. 4. Lifestyle: FTTH is not a solution offering, it’s a “Services” offering to the customer and the
of the of the people availing these services is definitely different from who don’t. It’s a “vow” effe addition to the complete solution offering. Sign up to vote on this title 5. Fixed Mobile convergence: This is real benefit to the telecom operator, with the growing Useful Not useful subscriber base and reducing number of fixed of fixed line, fixed mobile substitution will be a great
to the entire telecom operator. This open architecture of FTTH of FTTH will help them to utilize the
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Key drivers for the “Building FTTH Revenue” Key Stakeholders for for Growth” Growth” Building FTTH Revenue – Revenue – “Key Stakeholders
As said earlier, this is the convergence of two of two platforms therefore it is required to have the complet
value chain developed over the same line and all the internal and external stakeholders have to wo
the same to deliver it to the end customer. Key stakeholders who will drive the FTTH Revenue woul 1. Third Party Application Service provider (ASP): Application service developers are going
Fig –3 Fig –3 Telecom Value chain for the FTTH Solution offering
to create the middleware system which will converge Sign the Triple playon and VAS platform up to vote thisthe title
would be the one, who understands the FTTH network and the Telcos existing Useful Not useful core and Tra
mission as well as individual platforms of the of the Value added services provider such as fire alar surveillance, remote monitoring etc. The OSS/BSS system of the of the same has to be developed
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the OSP (Out Side Plant) network connecting to the each of the of the home and the entire Service provider can offer the services over the same network.
3. Content Providers: Japan’s 3G success story was because of the of the “Killer applications” like
gaming, and Korea’s FTTH is because of bandwidth of bandwidth intensive applications, therefore to have
average revenue per user (ARPU) it is required to develop content and the content delivery
forms to offer the content to the end customer, growing demand of next of next generation conten are required to be aggregated and offered to the end customer. Building FTTH Revenue ‐Packaging and Marketing of Services of Services
Marketing of a of a product and service comes with USP (Unique Selling proposition) and the one stop
vice with such an enormous VAS offering is definitely going to create a niche for the solution provid
“Packaging of Product of Product is is crucial for success for success in the market” and this provides a differential advantage
the solution provider.
” Bundled product “Happy product “Happy Meal” Meal” of of Mac Mac Donald has Donald has a better sale better sale rate compared to compared to the plain the plain vanilla products”
As per our experience of offering of offering the solution to the end customer, Packaging of the of the product is the
gest factor to illustrate the tangible and intangible benefit to the customer, as an example to quote have define “Normal Telephone “Normal Telephone Facility of Facility of Communication” Communication” to following service offerings:
Communication o
Hello
o
Auto‐answer
o
Just talk
o
Group Talk
o
Insta‐share
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Business Models for the FTTH – FTTH – Innovative Models
With the recent development in the FTTH domain, it can definitely be said that the market is “attra as well as “growing”, all the major countries are adopting the solution and the take rate has also
up substantially. This is quite encouraging picture but at the same time all the stakeholders are exp
ing something beyond as technology options are also quite matured and major Telcos and municipa service providers have tested various aspect of business. of business. The next revolution in the FTTH domain
through the innovative “Business model” and through the government initiatives. To create a uniqu
business model, all the aspect of the. of the. In order to offer a unique proposition of Business of Business model follow follo components are required to be considered:
1. Value proposition: “One stop Solution” offering considering the triple play and best of bree of bree
value added services to offer unique combination of Product, of Product, Price, Packaging and promoti
of product life cycl 2. Market Segment: This technology has already attained the growth path of product (PLC) and the market segment to address will always be the premium segment in the first
and then it has to be taken to address the masses. With the bundled offering of FTTH of FTTH soluti we can tap more market through the VAS segment. Segmentation of the of the market will differ Telcos to Municipal service provider and also on the business model of the of the operation.
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Market Segment initially can be divided into three segments 1. Basic Services: Triple play services 2. Basic Triple play services + Safety +VAS 3. Basic Triple play services + Safety +VAS with the customized solution for individual
tomer of the telecom value chain 3. Value Chain Structure: The external and internal stakeholder of the
will play a major role in the complete “Package” offering to the end customer, the left hand of the of the value chain is quite matured and the right hand side requires development for the
content offering and the platform to offer new applications and the services to the custome
FTTH community should focus on the integration of the of the Content aggregator, content provid
third party application development, and middleware development for the third party Valu added services integration. Apart from this regulatory bodies will also play major role in the standards the creating the level playing platform of “Experience”, 4. Competitive advantage: Services are discriminated by intangible factor of “Experience”, the bundled solution offering (Fig 2), qualitative and quantitative competitive advantages created by Service providers, and this effort of putting of putting single solution on one platform will nitely create added advantage to the service provider. This also will help to gain and retain leadership position in the market as this activity is driven by “Creativity” of the 5. Avenues of Revenue of Revenue generation and Profit margin: In the present scenario, each of the tor and service provider is facing the difficulty of reducing of reducing ARPU and AMPU (Revenue and
gin), this requirement of future of future (fig 1) is definitely going to fetch more revenue to operator
the Services are increased over the marginal change of the of the Capex (Capital Expenditure) and
Margin is also going up because of the of the more services offering and the less Opex (Operating Sign up to vote on this title penditure) cost. Useful Not useful 6. Business ecosystem: There can be broadly two way of Operation of Operation for this network type,
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Fig 5 – Business Matrix for the Solution offering to the Customer
Each of these of these business models has their own merits and demerits and they are applicable in differe scenarios, based on the market there can be following scenarios of operation: of operation:
Most of the of the Telecom operators worldwide are having the above model of operation, of operation, this model off them liberty for the expansion of the of the network and also the Value added services can be extended
ried numbers. All the key stakeholders deal directly with the telecom operator and operator enjoys
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economy of scale of scale with high scale of customer of customer base
Fig 6 – “Complete ownership model” for Telecom Operator
In the revenue sharing arrangement, basic outline defined by the Core and Access network provide
with the Content/VAS provider. Success of this of this model depends on the expertise of content of content and VAS vider in the Services domain. For Asia market, this is more prevalent for the residential societies multi‐dwelling area where the ownership lies with the welfare association or a common governing
thority. Telecom operator shares a portion of the of the revenue with the O&M provider for the continuou Sign up to vote on this title
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maintenance and upgradation, the benefit of this of this model is enlisted
Fig 7 – “Revenue sharing model” for Telecom Operator
If we If we take the example of the of the western countries and developed nation, concept of Municipality of Municipality dep ing FTTH solution is more prevalent, and initiative of government of government to develop such communities is quite strong. Sign up to vote on this title
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Fig 8 – “Complete ownership model” for Real estate developer/ Municipality
In the Revenue sharing arrangement, following matrix of the of the operation will exist:
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Fig 8 – “Revenue sharing model” for Real estate developer/ Municipality
These are the business model variants to operate in market, the selection of the of the appropriate busine model depends on the external and the internal parameters and implementation of the of the business will be based on the analysis of the of the market. Market Strategy for FTTH
The growth of the of the market will be majorly governed by the market related strategy, and it will have lowing activities in it:
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useful which includ Useful bouquet Notservice One Stop Solution: FTTH Solution provider will offer complete
Triple play and VAS.
Operation & Maintenance:
is
the
barrier for the competitor, each Solutio
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Conclusion
In our endeavor “To educate, promote and accelerate fiber‐to‐the‐home and the resulting quality life enhancements” we have to work for building the business case for FTTH and also the future
of this of this technology will be depending on the Revenue and its growth rate. In order to increase the nue stream for the FTTH we can exercise following:
of Value added services of Triple of Triple play: Development of creative 1. Enhancement of Value of creative and innovat
applications and services over the plain vanilla Triple play services of Voice, of Voice, video and data will add to the experience of the of the Service and will add positively to the Revenue pocket.
2. Integration of new of custome of new Value added Services: Looking into the present requirement of custome we can sense the requirement of Lifestyle Change by the customer; FTTH is like building
highways to home, in the present scenario customer is looking for next generation applicat and Services in bundled form. Convergence is happening to every aspect of the of the solution, fore it is required to integrate Intelligent Home Intelligent Home Solution and Automation Automation to the offering This will act as Killer Application Application for FTTH and this will also add to the revenue growth and ture scalability of the of the same. 3. Development of Content of Content and Middleware: Presently there are two different platforms for
Integrated Platform there is need to med fering these services, with the requirement of the of the Integrated Platform
tion device in place and so the middleware will be get developed. For the enhancement Triple play VAS and new VAS, content with the supported format is to be developed and Content Aggregator and Content provider also add to the complete Value Chain and thus revenue to the FTTH
We have discussed about the market related strategies and also the importance of the of the USP (Un Selling Proposition) in the solution penetration to the market. of Business Sign up to vote Model on this of offering titleoffering the tion will be very crucial for every market individually. Each different Market dynami dynami Useful has Not useful market different Market and operational model, based on the PEST analysis (P‐Political, E‐Economic, S‐Social, T‐
Technological) of market of market we can define the business model, there can be two variants of opera of opera
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And keeping in view the growth of the of the FTTH market worldwide, concept similar to MVNO (Mobile
Network Operator) is definitely going to come to FTTH as well, and this event will act as turning poi the market.
“FTTH is poised to grow, a right idea of building of building revenues and an innovativ
Business model will make it huge success and world’s most popular technolo
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