Global Insights and Trends
Peter Jarich Peter Jarich
Current Analysis
Vice President,
Consumer and
Innovation, Experimentation
and the Hypocrisy of LTE Broadcast

Without a reliable crystal ball to consult, trialing (experimenting with) new services and service models is a core component of any carrier’s attempts to inject innovation into their business. By definition, this also means moving forward with experiments where the business case isn’t always well-defined or well-understood. In these cases, resistance is to be expected; nobody wants to invest in a new service without a business case. In order to move new innovations forward, however, demands for business case certainty must be mitigated – otherwise operators will be stuck supporting the same services or copying competitor innovations while vendors find the market for new, innovation-supporting, technologies constrained.
LTE Broadcast provides a good example of this dynamic
A part of the LTE standards, LTE Broadcast – also known as eMBMS – is a technology for delivering broadcast content over LTE networks, leveraging an operator’s LTE infrastructure and spectrum to deliver one-to-many content. Already this year, we’ve seen a commercial LTE Broadcast service launch by KT in South Korea and a high-profile trial by Verizon in the US, in tandem with the Super Bowl. Telstra announced a trial with Ericsson back in January. Vodafone Germany (February) and KPN (May) followed suit. Alcatel-Lucent’s announced an LTE Broadcast win with Etisalat in the UAE. If you’re looking to better understand the technology, they’ve even put together a slick video. Qualcomm, making device silicon that supports LTE Broadcast, claims that more commercial launches are imminent and trial activity is brisk. Yet, also this year, we’ve seen industry pundits decry LTE Broadcast as a waste of time and money given the slow death of linear TV consumption and the expectation that carriers simply can’t monetize subscription content services.
There’s something inherently hypocritical in this criticism. For years, operators have been advised to be more innovative, to act more like the Over The Top (OTT) players they now identify as key competitors. And yet, OTT players are notorious for moving forward on new services without having the business model nailed down. More than hypocritical, this criticism is potentially dangerous. If carriers hold up on experimenting with new services or technologies where the business model is unclear, innovation could come to a halt and ecosystems could be stunted. Returning to LTE Broadcast, we might never discover whether or not carriers could work with stadium owners, for example, to deliver users premium, linear content (video, data, whatever) during key events like the Super Bowl or FIFA World Cup when mobile networks might otherwise come to a grinding halt. Likewise, any vendor hoping to sell LTE Broadcast infrastructure or silicon could find themselves out of luck.
We’ve seen this dynamic beyond LTE Broadcast
On a continual basis, our analysts track innovative service launches from around the globe, segmenting them based on things like service type, monetization model, and customer target. Then, thanks to our Innovation IMPACT database and platform, themes emerge. Which services, for example, seem to be most popular? Which types of services are generating success? Now, it would be silly to expect that all business models, monetization models and service types would be equally represented in operator service launches. Of course, in an effort to see what works, it would be just as silly to see some models get virtually ignored. And yet, that’s essentially what we’ve seen with ad-funded services, cost-reduction as a monetization model and late-adopter user targeting.
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It is obviously a step too far to suggest that the need for business case justifications be completely ignored; services need to make money – or serve some other strategic purpose – if they want to live on. However, focusing too much on the business case early in the innovation process is a mistake if it puts a damper on experimentation. Likewise, it would be too much to suggest only focusing on service types, monetization models, and user populations that have been ignored by the competition. And yet, if differentiation could help to make a business model work going forward, looking to services which haven’t been fully tapped by competitors makes sense. Finally, vendors need to do their part. This means education around the potential business models going forward. This means connecting carriers with other players in an effort to build out the business cases. This means supporting trials as economically as possible so that the barrier to investigating new services and technologies is low.
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Jack Zimmerman
Senior Vice President, Global Sales
+33 (0) 1 41 14 83 15
Donna Simek
Vice President, North American Sales & Services
+1 508 785 2262

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