One of the most interesting things I get to do as CTO of Mobixell is to explore and discuss new trends in the telecommunication industry with others from around the world. One of these opportunities was at last week’s Broadband Traffic Management Congress in London.

This year, Mobixell sponsored, and I sat on a panel discussion entitled Taking Steps Towards ‘Two-Sided’ Business Models: To What Extent Can Operators Build a Dialogue and Establish a Common Language with OTT Players? The main argument was whether or not this business model could happen, keeping in mind both sides’ interests.

We at Mobixell see a few ways in which the operator can monetize their networks in cooperation with over-the-top (OTT) content providers. The big challenge for the operator is to add value to OTT content and services.

Though still in its early stages, one example of a monetization model that was presented in London is the initiative between Ericsson and Akamai targeting content providers with optimized mobile delivery (video and web), in which the content provider will pay Akamai to improve user experience  for content delivered to mobile device users. Revenue from content providers will then be split among Akamai, Ericsson and the mobile operator.

Markus Freikamp, Head of International Wholesale Business Models at Deutsche Telekom and one of the panel members, said he was a true believer in the two-sided model. He believes the content providers will eventually pay the mobile operators for the network’s bandwidth usage. “It won’t happen today, it won’t happen tomorrow, but it will happen eventually”.

There is simply no other choice. Similar to the cable TV model, operators will need to demand payment from premium content providers to be able to continue investing in network expansion to satisfy their subscribers.

One of the insights from the panel was that the technical components that facilitate the two sided business model already exist. But the real challenges lie within finding the right use cases and getting global market acceptance.  While content providers don’t fully understand why they would have to pay the mobile operators for using their networks, which until now has been free, some mobile operators are looking into the future and seeing how they can recoup a chunk of their network investments.

Yehuda Elmaliach

Mobixell CTO