Broadband operators need to rethink their strategies by putting video, not broadband connectivity, at the center of their business and positioning video as their basic service, said Huawei Technologies at the Ultra-Broadband Forum 2016 (UBBF) in Germany
Ken Wang, President of Global Marketing and Solution Sales of Huawei’s Carrier Business Group, said that despite the fact that there are already over 140 IPTV carriers in global markets (excluding China), only 26 of them have a ‘broadband-dominant’ user base, meaning that for the majority of carriers, broadband network users account for less than 50% of their customer base. This indicates that most carriers are still struggling with establishing a new business model, which can transform their broadband network customers into their video services users.
“We are very glad to see that most telecom carriers have adopted video services as an indispensable part of their overall business strategy,” said Wang said in his speech at UBBF. “Some of them have even succeeded in positioning video as their basic service.”
Wang said Huawei has designed three business models based on industry best practices to facilitate carriers who are transitioning through different stages of development, and help them monetize their video business. The models are centered around monetizing broadband, experience and vertical ecosystems.
The “Broadband Monetization” concept is grounded in the shifting of carriers’ business from bandwidth-centric to video-centric. It is recognized that consumers, who have a solid grasp of the quality of video services, are willing to pay a premium price for high quality video content. So carriers must convert their broadband network users into video services users. By binding content with broadband networks and, at the same time, and by combining broadband and mobile networks, carriers can monetize and even increase the value of their network infrastructure by transferring the value in content to the networks.
Having established this base of video services users, carriers need to consider their monetization strategy. It is broadly accepted that consumers will only pay for video services that deliver a premium user experience. Monetizing experience can be justified by the fact that increasing number of carriers are launching their 4K, content recommendation, video communications services and zero latency capabilities. Carriers need to build their own integrated video platforms and network infrastructures optimized for video service as well as aggregate customized high-quality content, so that they can offer the best video experience to their customers.
Ultimately, Huawei says, carriers need to explore the business opportunities that exist in vertical areas. They should open their video capabilities to uses in other vertical markets and monetize these capabilities to generate revenue in different business scenarios, such as B2B, B2V and B2B2C. The opening-up of video capability is the key to this stage, allowing carriers to breakthrough into vertical markets with solutions such as smart city, safe city, remote healthcare and advertising.
The UBBF is jointly organized by the UN Broadband Commission and Huawei, to create a platform for communications between carriers, content providers, consumer electronics vendors, Internet service providers, and regulatory agencies worldwide. Through discussion of the future developments of ultra-broadband, the Forum promotes the commercial success of all industry members and the sound and sustainable development of the ultra-broadband industry ecosystem.