The purpose of this weblog entry is to firstly provide some specific real-world examples of how opening up the network (exposing the Telco API) can significantly improve existing applications and stimulate revenue.  And secondly, look across some of the addressable markets the Telco API opens up.

Mobile Communities
airG’s mobile community has more than 30 million registered users worldwide and is interconnected to more than 100 mobile operators and media companies including Sprint Nextel, AT&T, Rogers, TELUS, Virgin Mobile, Orange, Boost Mobile, Vodafone and MTV.  I reviewed airG in a previous weblog entry.  It claims to be the largest inter-carrier mobile community in the world; and most importantly compared to its mobile community peers it’s making a profit.  This is through its revenue share agreements with operators.  Simply, airG stimulates traffic, and in doing so shares in that revenue stimulation.  Their services include the standard community features such as profiles and messaging, but they also include anonymous chat for flirting, and a range of services for posting and viewing community members’ content.
The first step on any community tool is signing-up, and it’s the first in a series of barriers that can stop people joining.  With the information an operator has available in their network within three clicks a customer could be signed up and have sent a friends invite to all the people in their phone’s address book already on the community through just exposing single sign-on and the customer’s address book.
Video streaming is another tough problem for application developers because of the variety of phones and the variety of video playing software on the phones.  Many operators have invested in video streaming solutions for their handsets, exposing this capability provides value to many application developers, and enables operators to win revenue share agreements, and stimulate new services not possible without their involvement.

Prepaid eInclusion Application
An interesting eInclusion application is InLiving developed by KNH (Kirklees Neighbourhood Housing) and Creative North (UK application developer), with input and testing from local students.  InLiving is a tool that housing organizations and local governments can use to help create successful and sustainable tenancies for 16 to 24 year olds.
A critical challenge with this application is the majority of people targeted for this service are on prepaid, if the account is empty they cannot participate.  Exposing a wholesale data capability would enable the housing association or local government to pay.  ARPU (Average Revenue Per User) estimates range between $2-4 per month, this stimulates data usage (non-SMS) within the prepaid segment.  This is an example of an application an operator would never consider in its product roadmap; yet it exists today and can be significantly enhanced through the Telco API.

Communications enabled Business Processes
The primary challenge facing businesses today is human latency; the time it takes to get people together to discuss a problem and then make a decision.  As a simple communications enabled CRM (Customer Relationship Management) use case:

• Jim is a broker at an investment bank that uses Salesforce.com.  One of the bank’s fund recommendations had been dropped; which requires he explain to his team how to present this to their ‘top 10%’ customers.
• Using the Operator’s widget for Saleforce.com, he clicks on the task which automatically sets up the conference call to his team which includes recording and speech-to-text for legal recording purposes.
• For those of his team not on the call, they get a voice message marked urgent with the conference call’s transcript.

Such applications exist today, from suppliers such as Sylantro and Broadsoft.  The application has been shown to improve broker productivity by over 30%. With just an IP connection (whether in the office, at home or on the road) a broker has access to their communication tools.   The retail value of such a feature is approximately $800 per seat, a monthly charge could be in the range $45-60 plus communication costs.
In a relatively controlled environment of the enterprise’s VPN (Virtual Private Network), an operator could expose conferencing, messaging and call control APIs, and potentially mash up messaging with a voice-to-text service provided by a third party such as SpinVox.

Operator Community Widget
We’re already starting to see operators such as Verizon creating Facebook pages and encouraging people to become fans.  This is just a first step, the potential of participating in online communities is far greater.  Facebook provides an open environment for applications, similar to what an operator can create.  The experience of launching an Operator branded application on such an open platform can provide essential learning for an operator in what it takes to create a good application development community.
Here is a simple use case of what an operator could do with a community widget:

• Sue sees her friend Jo has added the ‘Operator app’ on her Facebook profile so she tries it to see what it can do for her.  As Sue adds the app she also confirms the download of the widget to her mobile phone.
• Whenever Sue wants to update her Facebook status message she can now include location information.
• At lunch she checks the widget and sees Jo has just downloaded a song they were talking about last week, from her widget she also selects to download the song to her phone.
• On her way home Sue stops at the local market, and while there receives a message saying Jo is close by, so she calls to see if they can meet for over tea.
• After dinner, while watching IPTV, Sue quickly checks her widget for updates as it saves going over to the PC.  There are no new updates, but the Operator is advertising a ‘one free premium VoD movie’ voucher, which she selects.

This use case shows the wide range of service capabilities an operator could expose such as content, customer profile, single sign-on, location, preferences, presence/context, and IPTV.  The business model for the operator would be to insert itself into the 16%-20% of online time being spent for social communications; enhancing that experience; and using it for both advertising and stimulating consumption of operator services.

Social Network Integrated Friend Finder
SNIFF lets customers locate friends using their mobile phone, even if their friend is on another operator’s network. SNIFF provides rules based control over privacy and how location information is shared.  SNIFF integrates with Facebook and other popular social networks.  Launched in Sweden and the UK where it operates across all operators.  Pricing is roughly $1 per SNIFF (location check).
One of the application’s challenges, common to many location applications, is age verification because of location privacy concerns, hence the SNIFF application could be assigned an adult premium rate SMS code, which would deters customers.  In additio
n, the process of using a credit card to prove the potential customer is 18 or older presents a further barrier to entry.  The operator can in some cases have age information available; exposing that would enable a seamless user experience especially when combined with single sign-on.  SNIFF is just one of many location applications motivated to partner with operators to provide a smooth user experience.

Ad-Sponsored Services
Virgin Mobile USA announced the Fund My Phone application; this extends the operator’s Sugar Mama marketing program to Facebook’s social networking platform.  Consumers earn airtime for their fellow Virgin Mobile subscribers, scoring free minutes as ads are viewed.
Over 700,000 Virgin Mobile USA customers have joined the Sugar Mama initiative since its 2006 launch.  By viewing ad spots, responding to branded text messages and completing surveys customers can earn free airtime.  Virgin Mobile USA still earns revenue for its airtime, it’s just the customer pays with their time and through an advertiser it’s converted into cash for Virgin Mobile.

These are just a few of the many thousands of applications that can benefit from the Telco API.   Taking a broader market perspective and examining the potential markets the Telco API can address:

• Location based services (LBS).  Enable 3rd parties to aggregate and experiment with innovative LBS.  LBS market size is estimated to reach $59B by 2011, source ABI Research.
• Mobile Advertising.  Under policy control enable some customers to pay for services through viewing advertiser messages, e.g. Virgin USA’s Sugar Mama.  Total US advertising spend last year was about $150B, with $21B being online.
• Community services.  It’s not just enabling access to online community services, operators can add their own widgets to those communities.  A small market by revenue compared to others in this list, though it does have lots of ‘eyeballs’ with Facebook reaching 100 million users on August 26th 2008.
• Wholesale access.  For the prepaid segment this enables services to be sent even when their balance is zero.  It can be used by advertisers or local government bodies.
• Telematic services.  OnStar (US based telematics provider which uses the Verizon Wireless network) has achieved more than 4.5 million subscribers in ’07 and is the largest telematics service provider in the world.  With monthly subscription plans ranging from $17 to $70.
• Enterprise mash-up services. Enabling operators to integrate communication services into businesses processes.  Business process management in just the US is forcast to be a $6B in 2011, of which mashing up communications could take a significant share.
• Content delivery over IP.  Enable content to be delivered and charged for using multiple methods, not just traditional premium messaging, a $50B market in ’07.
• Set top box (STB) Widgets.  Enable 3rd parties to put applications on IPTV STB, not just local traffic and weather, but local community services (e.g. restaurant menus, local services, local government).  Enable services between the mobile phone and STB such as remote program record and viewing content on either device.  IPTV market size is predicted to top $17B by 2010.
• eHealth and telemedicine.  Integrating communications into health care systems, e.g. remote diagnostics and remote healthcare visits.   The health care industry is roughly $4.5T worldwide, and $2.2T in the US.  There’s lots of potential in this segment!
• General Experimentation.  If an operator is not convinced ad-supported gaming will work, then let some of the many providers experiment in their market.  The Telco API provides a mechanism whereby operators can outsource risk, letting the market decide, c.f. Telecom Italia’s NexTIM.  This last point is critical to the importance open innovation plays in enabling a operator to expand the capabilities of its product development process.

In summary, this article sets out just a few of the many thousands of applications enhanced by opening the network through the Telco API.  As well as giving just some of the potential markets (and revenues) such opening can address.  An operator’s product development process can not address these opportunities, only by opening the network with the Telco API and getting out of the way of developers / 3rd parties can an operator access this untapped revenue potential.