Finding Services and Business Models for the Next-Generation Networks

The previous generations

During the 80s and 90s, communication service providers deployed networks based on analogue technologies. These technologies allowed for reliable and secure voice communication, bringing solid foundations for the next steps. Service providers were used to investing millions of dollars on equipment because they were making billions of dollars every quarter. The reason why the equipment was so expensive was that it was built by hardware engineers to allow millions of communications on a daily basis, relying on very expensive hardware equipment that was built specifically for this purpose. However, all that changed radically with the dot com crash, moving service providers to invest wisely in newer equipment.
Early network communications equipment and standards were driven by a small number of companies, such as Ericsson and Nokia. They invested millions of dollars on technology that could allow service providers to deploy nationwide voice networks. Strict requirements for building such a reliable communication network blocked newcomers who could bring the much needed innovation.
It wasn’t until the introduction of i-mode by NTT DoCoMo (Fransman Martin, 2003) in Japan that mobile data services arrived on the international scene in earnest. The explosive growth of data services in Japan forced executives in carrier organisations to take the data services seriously—at a par with voice—and subsequently to make significant investments in the evolution of the data services market.

2. Deploying richer communication services

The introduction of i-mode by NTT DoCoMo (Fransman Martin 2003) in Japan was brought to the attention of the European services providers. Based on the explosive growth observed in Japan, mobile data services were an attractive market. Service providers’ executives were forced to take the bid seriously and to invest in the evolution of their communications network. The deployment of mobile data services fostered consumer adoption, which created a self reinforcing effect because more connectivity led to more services and greater innovation.
This was the first attempt made by service providers to increase their value chain outside the basic voice services. During the last decade, service providers launched a myriad of services, which emphasised the fact that service providers were merely network service providers, and they needed to create an ecosystem of content and application partners.

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