Heavy Reading
Length: 63 Pages
Price: $3,995
Click here for a full list of included vendors
63 pages of analysis covering telco plans to work with third-party service providers and application developers, examining both enabling technologies and the business models they will employ
Full results of an online survey of 80 individuals working for 62 service providers, across all regions and types of provider
Detailed profiles of 14 leading vendors whose technology propositions aim to help network operators create stronger relationships with third parties
In-depth analysis of what increased third-party collaboration and telco app stores will mean for the long-term future of network operators
Length: 63 Pages
Price: $3,995
Chief Analyst,
Heavy Reading
Graham Finnie has been researching telecom for more than 20 years, formerly as a journalist and latterly as an analyst and consultant...
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Telco App Stores: A Bridge Too Far?

Network operators including telcos, cable MSOs, and others that own and run major networks are at a crossroads. In the 15 years since the Internet became a commercial phenomenon and the World Wide Web was invented, there has been an explosion in the number of services that customers can access via their telecommunications connections and the vast majority were created and supplied not by network operators, but by third parties.

Third parties will continue to be the main source of new services provided to end users with broadband connections for the foreseeable future, and network providers have only two choices: settle for being providers of only the connection and perhaps a few major services; or work with third parties to add value to the customer's overall experience of using Internet and Web services while increasing their own role in creating that experience, and the revenues that go with it.

This has led to a major shift in the attitude of network providers toward third-party application and content providers. Almost all operators are now actively seeking ways to unlock and expose a range of valuable network assets and enablers including billing systems, subscriber profile information, and application-specific QoS to third parties.

Whether this effort will ultimately make much difference to the long-term future of telcos is still an open question. To make a really big splash, telcos will need to radically rethink the way they create, market, deliver, and support services, and make partnering a top priority. This will require significant organizational change; new technology platforms that massively accelerate service delivery; and new business models for their service packages.

Operators will also need to create a platform compelling enough to persuade developers to write to their platforms, rather than to device or other platforms. Telcos will need to create the scale, business model, and capabilities that developers really think they need perhaps through collective and standardized programs, rather than standalone efforts.

Many telcos have already established successful collaborative programs for premium telephony, SMS, and IPTV services, showing that it is possible for network operators to have strong relationships with third parties. Some have gone further and created applications ecosystems specifically designed to encourage third parties to create new applications for telco networks. In some cases, these efforts have morphed into (or been augmented by) telco app stores that mimic those already successfully deployed by device vendors. But network providers will need to do far more if they are to remain relevant in the era of multiplying Web services.

Telco App Stores: A Bridge Too Far? explores service provider plans to work more closely with third-party service providers and developers, examining both the enabling technologies and the business models that telcos and other service providers believe they need. The report is based in part on an online survey of more than 80 individuals working for 62 different service providers, across all regions and types of provider. The survey looked at what assets telcos plan to expose to third parties, and how; at the business models for doing so; and at major catalysts and barriers.

While the survey uncovered considerable confusion and uncertainty about the details of working with third parties, most telcos agree on general principle that they must work more closely with third parties. Respondents cited a wide range of catalysts for moving in this direction, as shown in the excerpt below. There was a strong emphasis on building a wider service portfolio and reaching new types of customers.

The report also draws on an interview program with 14 major vendors that have various kinds of technology propositions that aim to help network operators create better relationships with third parties. For a list of technology suppliers analyzed in this report, click here.

Report Scope and Structure

Ethernet Services in North America: Leader Profiles is structured as follows:

Section I includes a full executive summary and report key findings.

Section II explores the major issues, sets out the main reasons for the new interest in working with third parties, and considers some of the potential roadblocks ahead.

Section III looks in more detail at the technology issues, in particular at the technological basis for exposing assets to third parties, and how this is changing.

Section IV examines these issues from a business point of view, looking in particular at whether there is a viable business case for working with third parties and what assets telcos have that are valuable to third parties.

Section V looks at the network operator developer programs and ecosystems that are already running, including a detailed look at programs being developed by Orange and O2.

Section VI contains detailed profiles of the propositions of 14 vendors that sell hardware and software that can help network operators build stronger relationships with third-party developers, looking at their strategies, products, and customer wins in this area.

Section VII offers conclusions and makes recommendations for telcos looking to leverage the third-party application opportunity.

The report is essential reading for a wide range of industry participants, including the following:
  • Telecom service providers: How will the use of third-party application developers affect your business model going forward? Which factors are likely to drive the application environment of the future? What strategies are most likely to enable you to enhance (or protect) your role in the applications value chain? Which suppliers are in the best position to meet your needs for third-party collaborative platforms?
  • Telecom equipment manufacturers: How do your product development plans map to those of your competitors in the third-party collaboration arena? Is your current and anticipated product portfolio in line with the requirements of network operators for exposing assets to third parties? Which resources do telcos consider most valuable to third parties, and how can your products facilitate their exposure?
  • Independent application developers: What business models will govern telcos' network operators' relationships with developers in the future? What technology platforms and architectures open source or standards-based will telcos prefer for building their new application environments? What technology obstacles must be overcome for telcos comfortably open their application environments to third parties such as your company?
  • Investors: How will the migration to a third-party-based application marketplace change the dynamics of the telecom sector? Which technology providers are likely to emerge as the main suppliers of third-party collaborative infrastructure? What kinds of application developers are most likely to reap the benefits of increased collaboration with telcos?

Telco App Stores: A Bridge Too Far? is published in PDF format.