This past summer has seen a major evolution in the thinking of network operators with regards to how they address the needs of their subscribers.  Several operators have publically stated their intent to leave the traditional “walled garden” model for services they provide to their customers, and to embrace an open model where they will allow any 3rd party (meeting certain requirements, of course) to offer applications and services to their customers.

The cause for this sudden tearing down of the walled garden is a combination of competitive pressure from the internet (Google and Yahoo) and a new entrant delivering what the walled gardens could not, a business success: Apple’s App Store, which has managed over 60 million dollars in sales in its first month of operation alone.

However this trend may be evidence of a much deeper and fundamental change in the way network operators do business. It is perhaps a recognition that the internet succeeds because it lets the market decide what is a successful application, and what is just a momentary flash. And because it makes it possible for even small applications to profitably “mine the long tail” and find a sustainable market.  For years the telecoms industry has relied on a “command economy” model, keeping its offering small and competing by means of barriers to entry such as IPR protection, regulation and complex standards.

Of course, some things are easier to do than others, and fully embracing the “open market” model for multimedia applications will require a significant retooling by network operators of their internal processes as well as learning how to build large scale ecosystems of partners contributing applications and services to their value chains.

My question to you is this:  what should Ericsson be doing to move this evolution forward?  I look forward to seeing your responses to this column over the next few days.

About Marc


The opinions expressed in this column are solely those of the author, and in no way represent Ericsson AB's official or implied position on the issues discussed.