Mobile operators are financially in good shape. However, there are weak signals, which can be regarded as an early warning about the future prospects of the operators. Examples of the mobile terminal industry have proven that the incumbent mobile actors must be prepared for a new market, which is no longer built on the old achievements. This dissertation proposes two complementing propositions, which can be utilized for the operator renewal process. Open innovation has been one of the main drivers in the success of the internet companies, while the introduction of cloud computing has lowered the risk of entrepreneurship to a new level that has attracted in a vast number of novel startups.
The telecom industry can learn from these initiatives. Firstly, operators can apply open innovation to mobile networks, in accordance with open application programming interfaces (APIs), which offer developers novel opportunities to create services based on the operators' currently hidden network assets. We call this initiative Open Telco, which enables Network as a Service (NaaS) service model. Opening the network assets paves the way for a two-sided platform, also enabling new business models.
Secondly, operators should carefully review the opportunities and challenges of cloud computing. Clouds can be harnessed, not only as a service for customers, but also in the active utilization of the operators' software, platform and infrastructure systems, e.g. in SaaS, PaaS and IaaS service models. According to this dissertation, cloud computing is well suited to interactive SaaS services, and also the sharing of cloud computing PaaS platforms between operators offers interesting opportunities. The Open Telco platform can be built in PaaS fashion, too. Besides, even public IaaS clouds, including database services, can provide carrier grade performance.
In summary, mobile operators should, without prejudice, evaluate the novel opportunities and experiment with new concepts, technologies and business models. The telecommunication sector has been used to working on well-defined standards, but in the networked and digital economy, the old approach is too slow. Instead, the mobile industry should adapt the best practices of the Internet and transform their business to meet the future challenges.
The work was supported by Tekes (the Finnish Funding Agency for Technology and Innovation) as a part of the Cloud Software Program of Tivit (Strategic Centre for Science, Technology and Innovation in the Field of ICT).
Yrjö Raivio (Aalto University: Techno-Economic Analysis of Novel Opportunities for Mobile Networks – Open Innovation and Cloud Computing.
Cloud Software Finland is a four year (2010-2014) Tivit-program, which focuses on developing the different areas of cloud services. The program is funded by Tekes.