|Issue:||Europe I 2008|
|Topic:||Convergence, Web 2.0 and media|
|Organisation:||Italtel, responsible for Marketing & Communication|
Roberto Zuccolin is currently Italtel’s Vice President, responsible for Marketing & Communication; he has had 30 years’ experience in the ICT sector. Prior to joining Italtel, Mr Zuccolin served as Albacom’s Director of Strategy and Development and, earlier, as its Director of Marketing & Communication. Previously, Mr Zuccolin worked as Sales Director for Infostrada’s Top Accounts Division; as Sales Director first for the General Business Market and then for the Financial Industry at Oracle Italy; and at Olivetti as Director for Industry Marketing and Business Integration. He started his career at Philips’ Data Systems Division. Roberto Zuccolin earned a degree in Economics at Università Bocconi in Milan.
The value chain in the telecommunications sector is changing radically. Traditional business models, based upon dedicated networks are disappearing. The conversion of dedicated networks to converged IP-based networks that handle voice, images and data lets service providers of all types compete in each other’s markets. Survival will depend upon a wide variety of personalised and changing niche services, to satisfy an increasingly diverse user base. Fortunately, the new technologies can easily provide a wide variety of new and powerful services.
Times change! In the telecommunications sector, more than any other, innovation has brought radical changes, have had a remarkable social, cultural and economic impact. All the rings in the value chain have undergone this transformation, from systems for creating contents to those for distribution, from infrastructures to the increasingly sophisticated miniature multipurpose telephone devices. Little more than ten years ago a film, a phone call or a song had to be distributed via specific networks, either fixed or mobile or via satellite or transmitters. The content could then be used only with a specific device, such as a television, a telephone or a radio. Technology and media were thus organised in a vertical system. Not any longer. Thanks to the digitalisation of content, and to the growth of converged IP-based networks, formerly separate media and access devices can all be used on converged networks carrying voice, data and video all over the same network. This is an unparalleled occurrence where the roles and environments of the various key players undergo continuous redefinition and tend at times to overlap. Producers and aggregators of contents can create new formats, distributors can multiply the accessibility of content via fixed and mobile broadband, and even device manufacturers offer new bundles of content and services. Today, given the flexibility that converged networks provide, traditional voice, data or video services, Internet service providers and telecommunications operators are all moving into the media market and offering new services, such as IPTV and entertainment, each in open competition with all the other players. End users benefit from the countless possibilities made available by convergence. The choices they make, in turn, create demand for ever more complex and innovative services, and dictate new market rules; convergence even lets them become content producers and distribute their creations via, for example, YouTube. At the moment, it is not easy to imagine the outcome of this indistinct milieu, where everybody tends to do everything (or at least part of everything) that everyone else is doing. However, it is evident that all of this is changing the rules of the market and that new end-user behaviour and new media are giving rise to a phenomenon called Web 2.0. Social networking and communities – two fundamental Internet trends in which users themselves create social networks – are a prime example of this. On the one hand we have the user generated content (UGC) market, consisting of 14 million active content-producing users who, according to Juniper Research, will increase to 600 million in the next five years. Each day this veritable army of ‘builders of the public network’ produces 2,000 new articles on Wikipedia, four million photos on Flickr and 70,000 videos on YouTube. Furthermore, the ‘army’ speaks, virtually of course, with other users throughout the world. These online communities include the interactive virtual reality worlds and multiplayer games, such as World of Warcraft, which has nine million paying members, or Second Life, which every day sees the birth of virtual islands – at times set up by prominent businesses. According to several network experts, virtual gaming and Second Life environments will register very significant growth in the forthcoming period. The success of these phenomena can be attributed to the fact that users feel they are at the centre of a world where differences in time and space are cancelled and political, ideological and religious barriers are demolished and where new communities are generated based on shared interests. Given the power of these virtual communities, it is easy to imagine a progressive decline in television as the primary media, intensified Web usage, and a growing migration of users from PCs to Internet-connected, constantly at hand, personal mobile devices. The public demands ever more convergent and multipurpose mobile devices to link them to their online communities and their favourite content. Recent decisions by Nokia and Apple, as well as Google with its Android software are an example of the ever closer relationship between devices and Web content. What, then, is the role of the telecom service provider in this context – wedged in the value chain between content producers and aggregators and device vendors? It will be difficult for service providers to conquer a sustainable autonomous space higher up in the value chain and compete directly with the big media groups and Internet leaders – most of which are currently engaged in intense mergers and acquisitions activity to consolidate their positions in an increasingly competitive market. It will be equally difficult for them to move into the lower-end slot occupied by the device manufacturers. The best way for service providers to avoid becoming just ‘fat pipes’ to transport data is by rapidly producing effective service offerings that: • integrate and combine traditional voice, data and video services with emerging Web 2.0 media in a creative manner; • manage customers’ non-standardised devices and presence-based services to provide better usability; and, • quickly build or adapt personalised services to meet changing user behaviour even for small volume niches. To quickly satisfy changing, ‘long tail’, niche behaviour, it is necessary to modify the service creation model from a safe, but slow to react, structured chain (planning, design, development, testing, deployment, migration, full operation) based on very large volumes to a model that embraces a constant cycle of service definition, proof of concept and market testing. The new cycle will replace the traditional planning, design and development phases in order to target specific segments and smaller market niches. The new development environment should: • manage the progressive transition from traditional fixed and mobile networks to convergent all-IP networks from the very beginning; • work for a large number of devices – mobile clients, PCs, set-top boxes, IP phones, and black phones; • combine families of convergent services: o voice (voice call, call back, multi-party calling) o centralised directory (managed by the client and easy to integrate via the PC) o presence o messaging (SMS, email, instant messaging), and • integrate user location data and web applications. All this can generate a very creative combination of new services both for consumers and businesses. Voice can be linked to Second Life (‘Give your voice a second life’); registered avatars can be associated to real telephones, fixed or mobile, and communicate with other avatars using real numbers that are not displayed, to guarantee confidentiality. The use of ‘presence’ and integrated messaging services for enterprises will allow real-time association of three fundamental parameters to each person connected to the network – his/her position (in the office, out of the office, on holidays), the type of communication requested (mail, text, instant messaging, voice) and the terminal on which the user wishes to receive the communication or service (PC, Set-Top Box, cell phone etc.). This simple combination of information offers an exponential increase in the ability to communicate and interact between users with heterogeneous terminals. In the future, the enhancement of a service provider’s portal with base services (call, SMS, multi party call) and community services (online directory, click to call from directory, presence and smart follow me) can all increase the loyalty of the customer base. In addition, the creation of multimedia interactive services on portals, specifically dedicated to suppliers and customers, will create new business opportunities, and government portals will provide essential service links between public administrations and citizens.