The ‘Two-Sided’ Business Model Use Case Project: Introduction‘Two-sided’ platform-based business models’ have the potential to open up new market opportunities for telcosThey create significant value for multiple stakeholders in the ‘digital economy’ by addressing everyday business process problems The concept is increasingly established and now needs additional support through practical worked examples and actual cases

‘Two-sided’ platform-based business models’ have the potential to open up new market opportunities for telcos

The concept is increasingly established and now needs additional support through practical worked examples and actual cases

The ‘Two-Sided’ Telecoms Business Model - OverviewSide 1: Upstream CustomersSide 2: Downstream CustomersDevelopersA ‘two-sided’ operator :Provides services to ‘upstream’ service providers and ‘downstream’ end-users by enabling them to interact via a Telco platformCollects revenue from either or both sidesNote: Downstream customers are both consumers (B2C play) and businesses (B2B play)TelcoRetailersMillions of CustomersThousands of SegmentsGovernmentMedia Companies$$ASPsTelco – Retail

A new ‘two-sided’ operator has 3 revenue streamsSide 1: Upstream CustomersSide 2: Downstream Customers End-User Service BusinessVoice, messaging, media and data delivered to and paid for by end users – as now.A Distribution Platform BusinessAllows third-party service providers to distribute voice, content & data services as part of their proposition to end users across multiple distribution systems: internet, broadcast, multicast, SMS, circuit voice etc.A VASPlatform BusinessAllows third-party service providers to better interact with downstream customers by providing enabling services1.Developers1.End-User Services$$Retailers2.Millions of CustomersThousands of SegmentsNew B2B Platform ServicesGovernmentMedia2.Distribution Platform$$3.Advertisers3.VAS Platform$$UtilitiesFinancial Services

Potential Growth Opportunity: up to $375 billion p.a.Source: STL Partners/Telco 2.0 Analysis, ‘Two-Sided Telecoms Platform Sizing’; ‘Future Broadband Business Models’

Distribution Platform - six main product areasSource: STL Partners/Telco 2.0 Analysis, ‘Two-Sided Telecoms Platform Sizing’; ‘Future Broadband Business Models’

VAS Platform - seven service capabilitiesSource: STL Partners/Telco 2.0 Analysis, ‘Two-Sided Telecoms Platform Sizing’

Senior Telco execs appreciate the need for new business models“I don’t like the word ‘carrier’. We operate customer platforms, billing systems and so on. A carrier is not what Vodafone wants to be…We need to find the right models for all the new content and applications.”VittorioColao, CEO, Vodafone, 2009“We have to find a way for applications to work across devices, platforms and operating systems…I think we should use standard APIs... that would allow developers to access platforms worldwide.”Ralph de la Vega, CEO, AT&T, 2009“The challenge is not the technology. The challenge is not the applications. The challenge is the business model.”Chairman Wang Jianzhou, China Mobile

What next?The need for, and theory and concept of, the ‘two-sided’ business models are now understood and accepted by many senior strategy executives in Telcos......but a deeper, practical understanding is required.The Telco 2.0 ‘Two-Sided’ Business Model Use Case Project will provide detailed examples of specific actual and potential examples of the practical application of the theory.

The Use Cases provide:A detailed and workable illustration of the new business model in operationInsight on how existing ‘best practice’ can be enhancedDirection to investment prioritisation

To be published in a new Telco 2.0TM Strategy Report and presented at the Telco 2.0TM Executive Brainstorm Events (see http://www.telco2.net/event/).The 5 ‘Two-Sided’ Business Model Use CasesTelco 2.0 ‘Use cases’ are detailed “business level” descriptions of illustrative commercial models for new Telco 2.0 B2B platform services across the most accessible opportunity areas:Marketing and Advertising 2.0: Exploiting Telco dataMobile Broadband 2.0: Managed data offload service Digital Money 2.0: Mobile Banking for the unbanked in mature markets Digital Utilities 2.0: Smart GridVoice and Messaging 2.0: SME productivity platform