Report shows changing trends in telecom usage

Real opportunity in entertainment services for telecoms operators still to be uncovered according to Brendan Logan, co-founder and CEO of Logan Orviss

Logan Orviss International, one of EMEA's largest telecommunications consultancy groups, notes that an evolution is taking place from the 'You' to the 'Us' generation in the telecoms industry.

Telecoms operators (telcos) need to understand how the business models required for multi-directional 'social interaction' services differ from those for the direct distribution of entertainment content, if they are to fully monetise new revenue streams.

"In the 80's and 90's we had the 'me' generation, which drove the first wave of mobile service uptake ('brick' phones with no coverage or battery life) - but today it is the 'you' generation," said Brendan Logan, co-founder and CEO of Logan Orviss.

"This time round it's a different cultural phenomenon, but just as in the 1980's it is the alignment of commercial, social and personal objectives that is driving change".

"Today, with the technology in place to enable a direct channel to the 'you' generation, such as social networking websites, online auction engines and access points through mobile smartphones, telcos will need to exploit the latest cultural shift to fully capitalise on these opportunities".

The 'you' generation's direct link to the telecommunications market is evidenced by recent events including: Vodafone striking deals with MySpace and YouTube for 'exclusive' mobile access; People magazine voting "You" the person of the year for creating user-generated content on websites; the rapid and widespread uptake of interactive gaming environments such as World of Warcraft; and Second Life having greater than two million users, many of whom are creating virtual businesses that provide real-life income.

However, telcos must avoid the assumption that all user-driven content is indicative of an interactive community - to date the majority of 'social networking' actually involves the 'parallel engagement of single users' rather than fully being collaborative.

Logan Orviss indicates that users may contribute content to sites for a wide range of personal and social reasons, when their contribution will lead to one or more of:.

* A reduction in boredom (eg playing games).

* A perceived opportunity for financial or social gain (eg, eBay selling, MySpace posting).

* Feedback received that will more than offset the effort associated with the contribution (eg texting traffic alert notifications to radio stations).

* An increase in status within their peer group (eg phone or text voting).

* Confirming membership of and increased engagement with a 'community' as a means of enhancing self-identity (eg chess playing).

Brendan Logan comments: "Companies are keen to discuss how technology will form the basis for social networking, when in reality today this hasn't happened yet".

"If a telco truly cracked this it would be sitting on a goldmine".

"Most of today's services aren't actually collaborative - building a MySpace page and sharing it with friends, although hugely popular, is a parallel engagement with others rather than collaborative".

"When technology aligns with how we lead our real lives, enabling us to engage with other people in groups, the true power of these social tools can be realised".

He noted that two core revenue models exist for offering these services to consumers in the 'you' generation: 'Traditional' models where entertainment services are offered to the customer, who pays on the basis of resources consumed or value 'X-factor' models where a third-party advertiser or service sponsor pays the telco to exploit the customer experience.

The third party intervention may create a noticeable and active degradation of the quality of service on offer (Eg, advertising interjected into the content); in other cases the intervention may be passive (Eg advertising on portal).

Active users tolerate the service interruption either because of the high interest value of the content or in return for a 'free' or cheaper service offering Many forms of hybrid models can also exist.

Logan indicates that telcos will be successful by combining elements of these models to offer bundled service packages that help engage customers on an ongoing basis.

Elements can be commercially-led (eg premium live video-streamed football), commercially associated (eg free football news, blogs, or chat hosted on a premium sports portal) or non-commercial (eg hosted football fan sites).

Logan Orviss counsels telcos that the key to unlocking the 'us' generation is in enabling information access, management and connectivity on behalf of groups of individuals who have a mutual need not only for shared access and interaction, but also to define, maintain and protect the integrity of the group, much as they would in real life.

"The service requirements of the 'us' generation will be much greater, and will require a more comprehensive understanding of how human social interaction works," said Logan.

"If group behaviour through shared interest groups is comprehensively enabled, there is a real prospect that the communications industry can become a defining part of subscribers' lifestyles - exploiting more than just their ability to interact with information and each other".

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