Can Carriers make money on their own Personal Cloud offers?

One of the biggest challenges for carriers in Europe today is how to position themselves in the Consumer Cloud space. Some carriers have actually built their own solution internally, others have used white label providers such as Funambol or Synchronoss Technologies, others still have shied away from an “own brand”  solution and seem to be happy to partner with an OTT player ( DropBox, Sugar Sync, PogoPlug etc)

When talking to carriers, the question that is asked most frequently  is how can the carrier generate a decent line of revenue if they invest in a Personal Cloud solution, either by building it themselves, or by using 3rd parties.

In Europe the main lever to generating income to date has been to convince the user to purchase a premium bundle, typically with more storage capacity, and perhaps additional services. The fact of the matter is that today, with the very high percentage of consumers using only the Free component within a Cloud offering , it is pretty hard to see how a carrier can make money off the Premium offering alone. However this is not the only way to measure the ROI of a Consumer Cloud  investment.

Data Usage: in almost every market there is still an incentive to encourage customers to consume more data, a cloud is a great way to do this. controlling that cloud enables to carrier to be creative on what is charged for and when: for example the carrier can decide not to charge for uploads ( or make it inclusive within a premium offer) or do so if the data useage is off peak

Churn Reduction: this is probably the biggest single advantage to have your ” own” cloud; if the customer moves to another carrier they will have to move all their cloud content, this is a hassle and results in a reduction in churn rates.

Insight / Big Data: Again, if the carrier actually controls the data rather than just partnering with a OTT player, they will over time, be able to gain valuable insights into their customer behaviour. indeed this can be monetised even further by combining Big Data learning with the Carriers own content portfolio, to cross sell content to the customer

And of course there is the fact that the Carrier extends their relationship with the customer, they continue to own the customer.

All of this come at a price however, and for the near future, we can expect many carriers will continue to avoid investing heavily in this space.

 

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