For Operators, LTE Offers More Than Speed
April 30, 2012 - Openet
Expectations are high for Long Term Evolution, or LTE. But the reality of the customer experience isn’t likely to match the promise of the marketing hype.
LTE coverage will initially be fragmented as networks are rolled out. Even in areas with strong coverage, a huge gap will exist between headline-making peak data rates and average data rates experienced by most users.
Perhaps most important, user testing consistently shows that higher speeds and improved quality control don't impact subscribers’ experience of most online activities anyway. For example, email and browsing are relatively latency and jitter tolerant (obvious exception: LTE will have a strong positive impact on streaming media).
Improving network services through LTE is a powerful and important part of an operator’s competitive arsenal. However, it won’t by itself transform an operator’s business model in a marketplace in which influence and loyalty are migrating to other parts of the value chain.
Diversify Revenue Streams. Operators must work to diversify their offerings beyond a single revenue stream based on connectivity. In particular, operators can strengthen their position in the value chain by actively working with OTT vendors. Operators interact with approximately 20 million users per hour from 7 a.m. to 11 p.m. in the United States alone, the audience equivalent of 17 American Idol finales every day. Direct connection to such a vast audience is an extraordinarily valuable asset, especially to content providers whose business model relies on the attention of mobile subscribers.
Engage with Subscribers. To take advantage of the potential of OTT partnerships, an operator’s first order of business is to engage in an interactive and meaningful way with subscribers. Openet’s recent worldwide survey of mobile operators showed significant opportunity for improvement in this regard. A significant portion (30 percent) of mobile operators don’t offer mobile self-care portals at all. Of those that do, fully one-third aren’t designed specifically for mobile use. If operators are to diversify services, they need a means to communicate availability of those services to subscribers. Subscribes need a means to purchase those services, and to monitor consumption of those services.
The Time Has Come. LTE offers great promise of faster speed and higher quality. This is a potent mix, setting the stage for a stronger relationship with subscribers as well as for true “two way" revenue models.