Monetizing 5G technology for virtual reality and augmented reality

Industry Marketing Manager - Communications, IBM

In the recent Harvard Business Review article, “Know Your Customers’ ‘Jobs to Be Done’,” Clayton M. Christensen et al. posed one of the most pressing questions of our times. If we know more about our customers than ever before, why aren’t we better at driving innovation—new products, services—to meet their needs?

Christensen, one of my favorite authors, wrote The Innovator’s Dilemma (Harper Business, reprint edition, October 2011) and several other best-selling books. He and his HBR article coauthors proposed that companies need to focus on what the customers are trying to accomplish—that is, their jobs to be done—and focus new products and services around that goal to ensure a high level of success. This proposal got me wondering: Can we take a look at the telecommunications industry through this same lens to see how this approach will change its strategy and plans?

Messaging’s role

The meteoric rise and domination of the messaging app, WhatsApp, is a story for the ages. Consider that a job can be defined as a way in which an individual seeks to accomplish something in a given circumstance. Now, think about how customers’ job or jobs were uniquely met with WhatsApp in a way that wasn’t delivered by telecommunications providers.

Apple’s launch of the iPhone in 2007 was followed by a variety of smartphones with Android and other operating systems flooding the market. Customers were moving from feature phones—focused on voice calls—to smartphones, and with each passing year they were taking more photos and videos with those smartphones. The job to be done was to share these photos and videos with friends, family and service providers such as doctors, lawyers and even teachers—instantly and in a cost-effective manner.

Email was the only cost-efficient way to share these files because Short Message Service (SMS) did not support photos and videos. Multimedia Message Service (MMS) was very expensive and didn’t work across different service providers and phones in the same way. Email required the recipients to open their inbox, see the email and download the content on their mobile device; no method to instantly share pictures and videos with anyone regardless of their mobile operating system—iOS, Android, Blackberry—was available. Email suffered from another issue as well; senders had to know recipients’ email addresses before sending them any photos, videos or documents. Telecommunications customers knew recipients’ phone numbers, but they needed an extra step such as sending an expensive SMS to find out recipients’ email and sending another SMS after sending the email to remind the recipient to open it.

WhatsApp addressed all these problems by combining these features: email, SMS and MMS. Email offers the ability to share photos and videos at low cost using the Internet, SMS provides instant communication through an alert on the mobile device and MMS facilitates instant delivery and access to the photos and videos. If people in your phone’s contacts have WhatsApp installed, you can start communicating with them cost-effectively with no delays, regardless of their service provider or mobile phone operating system. This scenario provides a seamless customer experience that accomplishes the job with minimal effort and cost.

Job advances

Now consider which additional jobs customers are trying to accomplish today and are expected to accomplish in the near future. In doing so, you can understand how communications service providers can design tailored offerings to match those jobs. Virtual reality (VR) and augmented reality (AR), especially with the widespread use of Pokémon Go, are right around the corner and expected to make compelling applications possible that are well beyond the traditional entertainment domain of movies and games. With the advent of 5G networks, communications service providers are well positioned to deliver the next level of connectivity and communications experience with the ability to support 1 ms latency and 10 Gbps speed.

Combine these two trends, and you start to see jobs that customers haven’t yet been able to do, such as attend meetings as if they are virtually present in the same room. For example, doctors may be able to meet with patients across the world, looking at their vitals and physical aspects as if they were seeing the patient in person. Gamers will be able to play games with players across the globe, and those games may have the look and feel of real-life games such as football, basketball or even a medieval sword fight.

How, then, does the communications service provider industry avoid getting left behind? How does it avoid getting WhatsApp’ed out of its upside of the revenue in the brave new world of 5G, VR and AR? Communications service providers need to establish a global standard for VR and AR information exchange so they can work seamlessly with each other and without any intermediaries. Better yet, they need to enable VR and AR communications directly off their network backbones. And they need to do so without requiring additional steps to turn on cellular data for connection with any subscriber, regardless of their service provider or mobile operating system and who has the VR and AR global standard–compliant phone.

The customer’s job is to connect with other subscribers seamlessly and cost-effectively during their VR and AR usage, and the communications service provider’s job is to figure out how to connect them seamlessly. To do so accurately, communications service providers need to figure out a global revenue sharing model in addition to a VR and AR communications standard. The choice is simple. Create an alliance to create this model quickly; otherwise, large and small innovators are likely to rise to the occasion and create another app that benefits from these new trends by taking the lion’s share of revenue and profits.

Further exploration

Learn more about how thought leaders in the communications service provider industry are focusing on customers’ jobs to be done to drive market share, revenue and profits. Register to attend World of Watson 2016, October 24 - 27, 2016 in Las Vegas, Nevada. Join me there as I explore these and other topics for the communications service provider industry.

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