More than 10 ways telecom operators can generate new revenues

I have been pessimistic about the 5G future for telecom operators and the tier 1 network equipment providers. Unless they manage to broaden their revenue generation away from SIMs with data plans and 5G network equipment, telecom is in for a bad ride with bankruptcy for even industry titans. So what can telecom operators do?

Buy your own network

The fastest way to increase profits and revenues is to convert the network roll-out from an enormous cost into a profit centre. The way to get there is to let businesses and building operators, but over time consumers as well, buy and run their own base stations. Most companies install their own WiFi. By combining WiFi and 5G base stations into one device, companies will be able to deploy their own connectivity. Building operators can assure shared offices always have great connectivity. Bars, restaurants,... assure connectivity is perfect as well.?

App-enabled own networks

By adding a new app capability combined with a software-defined radio to the “buy your own network”, operators can go one step further. Apps on these base stations can be network specific, e.g. bring 5G spectrum, integrate one or more operator networks,... However they can also bring other aspects, e.g. O365/Google/Okta/Auth0 and other identity providers can be integrated for instance for (guest) WiFi connectivity. We can for once forget the "Whats the WiFi password?". Integration with industry specific solutions, e.g. restaurants ordering systems. Integration with IoT solutions [more on that later]. By enabling apps to run code on the base station, any custom type of use case could be implemented, e.g. count visitors to a commercial centre, setup VPN connectivity for employees-only in a remote office, prioritise certain network traffic, deploy custom radio protocols,...

Micro Network Operators

Allowing companies to manage their own subscriber base, e.g. number portability, activation of eSIMs, custom data plans,... combined with app-enabled “buy your own network” and dynamic roaming between other micro network operators would allow operators to substantially cut the price to roll-out 5G networks in densely populated areas. The more activities can be done by companies, the lower the need for the telecom operator to do them. By doing a small revenue share with companies who have a lot of roamers, more and more enterprises will deploy their own networks.

Why would enterprises want to run their own networks? Enterprise customers would be able to restrict certain phones to only being able to call a limited set of numbers, e.g. share a service phone in a store. Have all conversations automatically recorded, e.g. investment manager compliance. Overwrite the default app store and have employees only be able to access certain white listed apps, e.g. locked-down phones.

Another network capability that can be exposed is being able to block internet traffic for some of its customers, e.g. only google classroom, whitelisted homework sites, wikipedia,... are available during studying times and no Internet at night. Parents and schools would really love this. Enterprises might want to block social networks, adult-only sites,... in the office. Telecom operators would only block the wrong sites. Let the enterprises pay for the privilege of being able to block sites.

Decentralised Identity and verifiable credentials

Our phone number has long been a unique identifier which next to our email has been used for many identity use cases. Telecom operators can actually know where you spend most of your time. So being able to provide “proof of address” as well as “proof of employee” can be functions telecom operators are uniquely qualified for. They should be all over decentralised identity [DID], verifiable credentials [i.e. proof you are who you say you are, you studied, own, work,...], DIDComms [i.e. exchanging verifiable credentials with others],... Becoming identity and verifiable credential providers for others would enable them to extend beyond being a proof of address provider with a paper invoice and a two-factor provider via SMS. Being able to verify you are over 18 through a verifiable credential would block lots of adult-only sites from kids. Many new innovations start from adult-only services, e.g. remember premium telephone numbers.

Pay Me to (Video) Call Me

Talking about premium telephone numbers, there would be lots of digital services that could be offered on a pay me to (video) call me. As long as revenue shares are mostly going to the service provider and not the telecom operator. Examples are plenty: remote tutoring, therapy, investment advice, computer support, dating, …

Payment providers

Operators often have automatic bank transfer payments for their services when it comes to customer invoice settlement. This means that they have some of the lowest costs of payment processing, after banks. Enabling the sales of third-party digital products through an operator’s monthly invoice would facilitate others to sell more. Digital currencies, be it in-game tokens to stablecoins, could be easily resold. Any type of digital vouchers. Having family friendly payment control systems, integrated with selective network blocking based on content, hours in the day, time of usage,... are premium services parents would pay for.

Business development as a service

Telecom providers have most companies and consumers as their customers. They know a lot about those customers. Enabling these enterprises and residential customers to easily buy third-party services and products should be high on each operator’s list. SaaS subscriptions would be a good example. Enabling usage-based billing on the operator’s monthly invoice would allow SaaS and other subscriptions to start really low, e.g. $0.5/month/employee for the basic offering. Operators tried this before but did not implement DID and wanted over 55%+ revenue share. If they would go for 5% or even below 3% for? reselling these products with a listing fee to pay for background checks and onboarding, then they would soon make lots of new revenues. Operators could have enterprise mobile app stores with 3% revenue shares instead of Apple’s 30% combined with a listing/update fee.??

In-Person Product Sales

Having lots of high street shops is often an expensive way of selling. Startups could be offered in-store space for temporary popups in which they present a new type of product to telecom customers. Each week something else. Afterwards the product is available via the operator’s online store. This would make that more people would enter the mobile stores and potentially buy other things. Additionally there are several products customers want to see first before making a purchase. Telecom shops could offer a see-before-you-buy-online service in which customers can be shown a product before they order it online. Operators could charge rent to store such products in a store’s backroom and get a revenue share.?

Product Crowdfunding

Lots of customers, be it consumers or enterprises, can be reached through operators. What if they allow consumers and enterprises to vote on problems that are shared by many? What if the top problems can be matched by potential innovative solutions offered by third-parties? What if telecom customers can crowdfund the best products and solutions? Finding market fit before you have a product is a luxury that many startups and larger companies would love to pay a revenue share for.

Home and Industrial IoT providers

The on-premise network equipment should become app-enabled, SDR-enabled [software defined-radio] but also IoT-enabled. Your broadband modem should be able to speak Zigbee, Bluetooth (low energy), Matter, Sidewalk,... [via the SDR] and allow a universe of cheap home sensors to talk to it. Anything from door/window sensors, movement sensors, fire/CO2/water leak detectors, cameras, light switches, smart lights, air conditioners, heating systems, smart home appliances, alarm buzzers, thermometers, smart speakers, smart TVs,... Any vendor should be able to offer connectivity code via an app on the broadband modem. Telecom operators can resell services from alarm companies, home insurers, device manufacturer warranties, heating maintenance services, and others who want to get access to some of the data or offer a service on top of it.

The same can be done for enterprise and industrial IoT in on-premise network equipment for businesses, manufacturing,…?

Edge Cameras

A special use case are app-enabled AI-accelerated edge cameras which could be programmed to do many different things, e.g. industrial product sorting on a conveyor belt, detect if a person is an employee, measure barista productivity in a coffee shop, detect dangerous situations in an elevator [e.g. weapons],... Operators can offer both 5G connected outdoor cameras as well as edge cameras inside buildings, for manufacturing, to be embedded,... Again app stores on cameras enable operators to resell third-party services, e.g. remote surveillance in case of issues.

Mobile base station edge computing

By adding extra serverless compute / AI inference and data storage capabilities next to mobile base stations, apps on this hardware can be used to offer paying third-parties new distributed cloud services. Netflix and other streaming services could store copies of popular content next to the base station, so streaming quality is excellent on the go. They currently pay for AWS Cloudfront. This type of edge caching would bring the content a lot closer to the end-consumer. Apps that measure and research real user behaviour could be run close to base stations. Anonymised data could be brought back. Parental control apps could be run on base stations as well. Anti-virus and other dangerous links can be checked before content is made available to customers. Lots of other revenue-generating apps are possible.

Innovation factories

Telecom operators are NOT known for their fast go-to-market and innovative products. For that to happen a different approach is needed. Innovation factories are a mix between corporate investment, venture studio, product crowdfunding and holding company. The idea is that small teams of both telecom employees and domain experts, focus on either a customer challenge, a new technology opportunity or refocusing telecom capabilities towards other industries.

They get a minimum budget to create experiments to prove a problem can get solved or customer demand is available for a solution. If they do, then a prototype is built to assure the capabilities exist to execute and problems you didn’t know you would have are discovered and addressed. Finally if successful, a pilot is launched with real customers.

The end goal is to create a spin-off which is partly owned by the initial team and funded by the telecom operator and potentially other partners. By creating new innovative ventures every month, the chances of large new future revenues will increase substantially.

By isolating the innovation factories from the core business, corporate antibodies can be stopped. The innovation factories will have their own processes, lawyers, financial team, recruiting,... They should not depend on departments which are setup for a totally different type of business. The core business is not allowed to slow down the new ventures. They can help accelerate or scale them. The new ventures can choose to work with competitors or launch competing offerings if the main business is not moving fast enough.?

Conclusion

5G revenues will look very similar to 4G revenues. No robotaxis, VR/AR SIM devices,... are going to generate new telecom billions soon. Costs of the 5G deployment are likely to drag down financial results unless new revenues can be generated.

Telecom operators have a history of launching many me-too copies which have all failed, e.g. hosted email, portals, social networks, app stores, streaming services, cloud,... If the industry wants to be around in the next decade, it needs to drastically change. Not doing anything is no longer an option.

To solve the lack of telecom innovation, make one change to telecom executives bonus schemes. Make them 100% dependent on the 50% innovation index! The innovation index measures how much percentage of revenues come from products which did not exist 5 years ago. If executives' bonuses depend on 4G, SMS, call revenues,... then their behaviour will not change. If bonuses depend on 50% revenues coming from products that did not exist 5 years ago, then they will focus on new revenues.

Do you agree?