5G monetization video series
"Charging by the slice" is an innovative Nokia video series looking at the wonderful world of telco monetization. In each episode, host Aron Heller gets “charged up” as he welcomes various Nokia experts to discuss a new slice of this exciting and advancing field in telecom. In these short, introductory segments we try to unravel the mysteries of monetization in a compelling fashion.
Episode 1 - Here's how 5G has revolutionized telco monetization
We kicked off the series with an overview of perhaps the most relevant topic of all – 5G monetization.
What is monetization?
In the broadest sense, monetization has the same meaning in every industry. It refers to the process of converting services into money. In telecom, that has traditionally meant voice, data or Wi-Fi packages. But as the services that Telcos can offer their customers have evolved, so too have the different ways they can monetize them.
How is this changing in the 5G era?
Every aspect of the Telco industry business has changed. Customer interaction used to be quite opaque. Now transactions are becoming much more digital, open and transparent. All these services must create growth when things like data, voice and messages have become commodities. The 5G network has its own capabilities that providers are going to want to monetize and this can be done faster because it is virtualized. Monetization systems must adjust to this. Plus, the whole technology has changed from monolithic, closed technology to open, cloud-native, IT stacks. The monetization systems must catch up to make sure that service providers can capture every revenue opportunity.
What has held back these monetization strategies till now?
Legacy BSS systems were not built to support the 5G economy. There are four key elements that are missing. The first is to capture every revenue opportunity that has presented itself, like IoT, B2B2X and slicing. The second is to launch price plans to the market very quickly. The third is new digital practices like simplicity and transparency. The fourth is the technology itself, with a new architecture allowing to scale more effectively. All these elements need to actively evolve at the same time, so that when service providers come up with ideas they can synchronize monetization and prevent a bottle neck in bringing these services to market. It also creates a return on all this massive investment to the 5G economy. Bottom line, the monetization schemes must catch up to the technology itself.
Episode 2 - Is IoT the next big 'thing' in the 5G economy?
This episode, we are taking a closer look at things – in particular, the Internet of Things. The year 2020 was the first one in which the amount of data from “things” outweighed that of people. By 2025, IoT connections are expected to reach almost 25 billion globally.
What is the Internet of Things?
The Internet of Things represents where we have come with the internet itself. Once upon a time, it was us and Internet Explorer and very limited applications. Today, we have super computers on our wrists, we have smart cities, smart ports, smart air-conditioning – the internet has changed.
How does IoT monetization differ from 5G monetization?
They are entirely interwoven. IoT is a critical fabric of the IoT economy. Making money from IoT is not about charging for minutes, SMS and data. The monetization schemes are much more expansive when you have so many more applications. It is much more complex than it used to be. If you are investing massively, as has been the case, there must be a return on that investment. And this is where monetization systems are critical.
How is this done in practice and where is it headed?
Today’s world is still 4G dominant and a lot of the IoT solutions are lightweight. As we start shifting toward the 5G economy and it begins to mature there is going to be a huge paradigm shift. We’re talking about charging by network slicing, dynamic pricing and more sophisticated charging systems. Over 90% of the money being made by service providers in IoT is naturally in connectivity. But there are some innovators who are going beyond connectivity. For example, offering platforms for orchestration tools, drone management, logistics for enterprises and security solutions. IoT solutions are so vast you can pick what works best for your strategy. But you must make sure you are agile enough so you can respond quickly as the market continues to change.
How do service providers seize on this opportunity?
In the year 2021, you can’t build everything yourself, you need to have an ecosystem approach so you can draw in technology partners you can trust and have this level of agility. There are lots of partnerships and “co-opetition” between companies that can help each other. So many technology companies and other players within IoT are earning a fraction of what they’ll be able to seize in the future.
Episode 3 - Monetization schemes just got SaaSy!
This episode we are getting “sassy” and diving into some of the ways in which vendors have licensed and priced software for service providers. Specifically, we'll focus on Software-as-a- Service, or as we like to call it - SaaS.
What is SaaS and what does it mean for service providers?
SaaS refers to the way you own and operate software. It is a licensing and delivery model where the software is paid for on a subscription basis and is centrally hosted on the public cloud. What this means for service providers is that they no longer need to invest huge amounts of capital up front to procure software and they are no longer responsible for the ongoing management of the software. Moving to a SaaS model also enables greater scalability and flexibility so service providers can free up resources to better serve customers. Service providers used to purchase the software and store it in their environment. With SaaS all the operational management aspect is done by the vendor and they just pay as they need based on how much they consume this service.
Why has the telecom industry been slower in adopting this model?
For some business-critical types of systems there was some hesitancy to trust SaaS as an environment because of issues of business continuity, data privacy and security. But we are moving down the stack as we think about SaaS services and SaaS systems, the telco industry really seems ready to adopt that. We are going to see with things like customer management and customer engagement in the BSS world that systems and operators are going to be moving toward SaaS to solve some of these issues.
What are the specific benefits of moving monetization systems to SaaS?
The same reasons that people were hesitant to move, particularly the complexities of the system, are going to be a benefit after. By the very nature of SaaS, there is no longer a need to customize the systems for specific operators like before. SaaS also makes sure that the platform is constantly updated to the most modern architecture so that all features are always available. SaaS models also provide the benefits of scalability of public clouds, availability and better security. The infrastructure is ready for this move, now the service providers need to make this move so they can enjoy the benefits of consuming this service.