At a recent Alcatel-Lucent customer event, Transforming the Customer Experience, I gave a presentation and ran a panel session on The Imperative to Open the Network, the pitch for the session was:

“The world has changed drastically over the past 3 years for operators. No longer are they the preferred service provider of their customers. Consumer electronics brands and web service providers are rapidly gaining that position. For iPhone customers they use FaceTime (video telephony), iTunes, App Store, Skype, Dial2do, HomeCamera, and many, many other services generally not over the operator’s mobile broadband, rather via WiFi. It’s a similar story for Android based devices and the rash of other smartphones and tablets coming on the market. Even in the once safe IPTV space, Google, Amazon and Apple are all making significant gains. Why should a customer pay $4.99 for a movie from their operator when they can get it for $2.99 from Amazon on demand?

The case for opening the network has never been starker, the direct objective evidence of not remaining relevant to the customer is clear. But the landscape is changing dramatically: APIs are being commoditized, Apple offers thousands of them for free; Google and Apple have cornered the market for advertising on their platforms, while operators continue to struggle with advertising given their customers are paying them $1000s over the lifetime of their contracts. Knowing your customer and delivering compelling value to your customers has never been more important to operators. This session will explore what operators can do, firstly through a frank and independent presentation from Alan Quayle; and then a lively and informative panel discussion with leading developers whose services every operator should have deployed several years, and who now have a choice in how to get to market.”

I show below the presentation I gave. Some points I’d like highlight include:

• The two things operators should focus on in building their developer ecosystems or third party application and service ingestion processes is presenting a large engaged customer base and a clear path to cash.  That’s it, everything else is tertiary.
• The telco industry obsesses on “How can we compete with the free of Google?” rather than focusing on “How can we use our customer focus / alignment to beat Google?”  For Google its users are ‘a means to an end’ not its customers, the advertisers are its customers; and their message will be delivered no matter how offensive the ‘targeting’ is to the recipient.  For operators their customers are their users, this alignment must be truly harnessed.
• In a global VAS (Value Added Service) survey I performed, amongst smart phone users (regardless of region – China, India, US, LATAM) beyond voice, SMS, voicemail and internet access they positively do not use the operator’s VAS, unless they perceive it saves them money (e.g. myFavs in the US.)
• Operators have been distracted by “copying” the web, and the dysfunctional guidance of investment analysts (look what they did to the economy).  Operators are in the communications business, their networks should be the easiest way to communicate. They are not. A user interface that still requires me to enter “#784*2*3” is a 30 year old user interface and a bad one at that!
• There are a few hundred apps operators should focus on: Missed call alert, missed call completion, do not disturb, communicator, spending limits, pay4me, call screening, out of office indicator, bill reminder, sponsored calls/ services, rented number, anti-SPAM, find-me follow-me, call back when free, etc.  Package them up so people start using them, expose them through APIs, so customers treat the telco is the easiest way to connect rather than as an ISP.
• APIs enable operators to embed their communication services everywhere. I show in the presentation below how an industry several hundred years older than telecom, newspapers have harnessed APIs.  If such an old industry understands the power of APIs in the online world, operators need to catch up quick.
• In 1995 the question many industries asked was, “Why do we need a web site?”  By 2000, the response was “Of course we have a web site.”  In 2005 a similar question asked was, “Why do we need APIs.”  For many industries by 2010 the answer was, “Of course we have APIs.”
• As a brief aside on operator websites, generally they’re a great example on lack of customer focus.  An operator’s website should just have two buttons, “How can we help you with an existing service” and “How our services make your life better?”  The website should clearly describe the services, show use cases, and always offer trial to buy; rather than expecting a customer to magically understand from a service name they want to pay $3 per month with no experience of the service’s value.

My recommendations were:

APIs extend an operators existing business model into the online world, its not a silo business case

• Share the love with developers, i.e. share stimulated revenue;
• Use your business model to compete head-on with the OTT (Over The Top) providers;
• Focus APIs on Communications Enabled Business Processes.  Enterprises are still prepared to pay; but not for long as Skype, Google and Apple have their sights set there as well; and
• Focus on the core of what developers need.  A large engaged customer base and a clear path to cash.

Customer experience matters above all

• Trial to buy is essential for ALL services, freemium is mandatory; and
• Sponsored services should be as far as operators go in advertising, your users are your customers not a means to an end.

Operator store front strategy is CRITICAL its all about DISCOVERY

• On Device Portal has been available for near 10 years, Apple showed the industry how to do it; and
• Widgetize all communication services, ‘#784*2*3’ is a joke not a user interface.