Network operators have long depended on value-added services (VAS) to aid their overall revenue gains. However, with the advent of smartphones and other personal computing platforms, and the escalated growth of third-party applications that are widely available to end-users, traditional VAS - location information services, emergency services and commercial services - have become almost obsolete. Third-party applications also result in more data being downloaded, uploaded and exchanged over networks.
To meet the demands of end-users, network operators have little choice but to invest in more base stations and infrastructure to expand their networks. As a result, profit margins are adversely affected as operators pump more funds into growing networks without getting any real returns from existing VAS.
Operators need to step away from the myopic view when it comes to revenue generation. For far too long, they have offered the basics - mobile subscriptions, short message services (SMS), and other simple VAS such as voicemail.
However, all is not lost. It is possible for operators to increase revenue with their networks by simply diversifying their revenue streams with unique assets which already exist within their networks. The two main advantages that network operators hold over third-party app providers are: unique user identification and location identification of the user.
Partnership is key
One may question how identifying the location of a user can be a revenue generating tool when most smartphones come equipped with global positioning systems (GPS) or wi-fi mapping. In reality, most devices do not offer GPS at all and even when available, GPS remains unreliable on many counts as it does not work indoors and can take between 30 to 180 seconds to get a first fix on a location.
The key for mobile operators is to work in partnership with third-party application providers. A large variety of third-party applications operate based on location information. By offering a location-enabling service to third-party app providers, users can use the apps within their devices to query the network for a location. This means that a location can be determined even when the user is inside a building, underground or outside in a dense city area.
As a result, applications will perform more consistently and user experience is enriched. Network operators can profit from this partnership by charging application providers for a 'micro-dip' of location verification when the network is queried by a user.
Unique user identification is the second asset that network operators can leverage to increase revenue. One-time passwords (OTP) are commonly used by banks even when the banking transaction undertaken by an individual is not mobile-centric. Financial institutions put this stop-gap measure in place to deal with increased coordinated theft and counterfeiting online. However, this security measure can be highly frustrating for users who have to make large numbers of small payments.
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