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Monetize 5G and IoT business models

5G and IoT use cases create new business models. This focus is changing the design rules for BSS capabilities and demanding new priorities. By combining my colleagues’ 5G network expertise with our proven BSS record, I hope to explain our view of these future demands.

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Introduction

This blog post is the first in a series of three to introduce the new demands on BSS thinking being driven by monetization of 5G and IoT use cases. In this post, I concentrate on the business demands. Future posts will examine the impact these business demands have on the BSS systems and processes.

 

Market View

The fifth generation of telecommunication networks (5G) comes with a different message than its predecessors. Up to the fourth generation (4G), it was all about “bringing telecom to the masses” by delivering better speech quality and higher data speeds.

5G will enable an exponentially growing number of things that require connectivity. This will rapidly drive companies exploring the use of “the last mile of the internet” and its mobility for business purposes, while connecting more of their devices.

As such the business case for 5G becomes fragmented as it spreads over many industries. This presents CSPs with new business opportunities and, more importantly, it does it without cannibalizing on their current business. It is a new business, which opens possibilities in new unexplored areas. A CSP needs to have a BSS that can monetize the new revenue streams to be able to capture this business potential, and to handle the new business relationships.

During the first phase of 5G/IoT, consumer revenue streams will dominate the CSP’s revenue. But soon the emphasis will switch towards B2B and B2B2X that will introduce new business models and relationships. Ericsson’s Digital BSS evolution follows this market development and advancement.

image 1

Figure 1: 5G and new businesses

 

 

Digital BSS and 5G/IoT

Business drivers

5G success depends on enabling the IoT promise. IoT is predominantly an Enterprise use of Communication Services for their product. IoT has a few implications:

  • Large volumes of devices, in the magnitude of 100s-10,000s devices for one enterprise customer. This magnitude will be reflected in Device management and subscriber management. The communications service provider lifecycle/journey must be accommodated with the birth and death of devices. Many IoT commercial offers will have device volume dependencies.
  • eSIMs will grow in importance as they offer SIM efficiency and savings for both enterprise customers and CSPs.
  • Subscriber priority and contract status will be important if there is a service outage, and BSS must make real-time decisions of which subscribers to serve in these cases.

We will start to see a significant change in how we design our Digital BSS solutions. Our current catalog-driven approach will remain critical for product Life Cycle Management, where the approach will also extend with various contract specifications that will drive business decisions.

Eventually we will see a move towards a contract driven approach. The terms and conditions of the contract will be what primarily drives the business once a product offering is launched. These conditions could be modeled as, for example, SLA and specifications in the catalog.  

Be aware of the value of a bit

Most IoT devices have different characteristics than traditional phones. They come in all sizes, shapes, and forms and demands different contractual and charging models.

A few things that are important to bear in mind:

  • Value of connectivity is limited - monetizing the network for IoT by connectivity only is not sufficient.
  • Use cases are abundant - purpose-built solutions for each use case are not scalable.
  • No size fits all - ‘value of the bit’ and network usage greatly vary between applications and verticals.

The challenge is to increase the CSP ‘value’ in the value chain, and smartly monetize the network with differential pricing that reflects the ‘value of the bit’ for that particular use case.

This challenge means that the digital BSS must be device-aware, network-aware, and service and app-aware. All at the same time to be able to properly reflect the value of the IoT service. 5G CSP offers are segmented with likely pitches towards usage pattern differentiated by transmission volumes, assured delivery, streaming, latency, and so on.

This is yet another reason for having the BSS Software properly integrated into the 5G core offering. For the BSS to be aware of device, network, service, and application, there must be effective information exchange or even a shared information base.

Also, if a digital BSS is to be part of the service delivery over a device and network (realized by a certain application) the latency that BSS adds to the delivery must not affect the experience of the service. So real-time performance, and how close to the core applications BSS can be placed, will be crucial.

 

Image 2

Figure 2: Value of the bit

 

What is the answer?

My next blog post will build on the unique expertise Ericsson can bring as the only 5G network vendor with a full BSS offering.  I will be using my colleagues’ experience of 5G networks, and our expertise with all types of monetization models (B2C, B2B and B2B2X), to discuss the impact of 5G and IoT on Digital BSS.

 In the meantime, I invite you to watch the replay of our webinar “Turn your BSS into a 5G monetization engine”, where an Ericsson expert joins IHS Markit industry analysts to explain the technical detail of 5G Monetization.

Join webinar

 

You may also be interested in the whitepaper from earlier this year in which Analysys Mason discusses their view of the monetization systems needed by service providers to support their 5G revenue ambitions: Monetize new 5G business models

Download whitepaper

Read more about Digital BSS

 

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