Main applications in the field of telecommunication - Strategies for broadband satellite operators : a co-opetitive analysis
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Main applications in the field of telecommunication - Strategies for broadband satellite operators : a co-opetitive analysis
The industry and market conditions create a very
complex competitive landscape for satellite providers,
making it difficult for those providers to decide how they
will deal with the many players involved in broadband
communications. The framework developed by business
researchers Adam Brandenberg and Barry Nalebuff in
their book Co-opetition is a useful tool for mapping this
landscape. This framework, called the “value net”,
classifies the players in a company’s market into four
categories: competitors, complementors, suppliers and
customers.
For the broadband satellite industry, these categories
might be configured as follows:
- Competitors: Other providers of global and local broadband services, including international carriers (especially Concert, the AT&T-British Telecom alliance), domestic and regional telephone companies (France Telecom, Deutsche Telecom, Cable & Wireless), cable TV operators (AT&T, Time Warner), wireless carriers, and other satellite operators.
- Complementors: Firms whose products and services will increase demand for broadband satellite services, including content providers (movie studios, television programmers, music publishers, entertainment companies), manufacturers of end-user devices and their components (e.g. consumer electronics firms, maker of mobile computing platforms, and manufacturers of semiconductors), software developers (in particular multimedia game companies and developers of Web technologies such as streaming media), standards bodies (especially the International Telecommunications Union) and systems integration firms.
- Suppliers: Firms who provide goods and services used by broadband satellite providers, including ground station and transmission equipment manufacturers, handset vendors, software companies, launch services, and content providers.
- Customers: The key end-users of broadband satellite service, namely carriers, corporations, institutional users, and consumers.
One key feature of this framework is that certain players
can occupy multiple categories. For example, terrestrial
communications carriers can be customers of the satellite
operators’ wholesale services, but competitors in corporate
services and broadband local loop. Content providers
are suppliers in one sense, and they may sell content
directly to end-users through the operators’ satellite systems,
but complementors in that the general proliferation
of broadband content will help attract customers to
broadband satellite services.
Using this framework, satellite operators can begin to
formulate key strategies that will help them to manage
relationships with these diverse stakeholders. Some
potential strategies include:
Engage potential competitors in co-opetitive ventures.
Satellite operators already depend on terrestrial
carriers as distribution partners, suppliers of interconnection
to end-users, and customers for wholesale services.
Engaging these carriers in such cooperative
relationships, where the terrestrial carriers can see large
benefits from working with satellite operators, will deemphasize
the tendency of such carriers to undertake
destructive competitive practices, such as blocking interconnection
or lobbying for trade barriers in broadband
telecommunications.
Develop partnerships with a broad range of technology suppliers. Broadband communications demand
will depend on the development of end-user devices and
applications which require high bandwidth service, such
as ultra-fast data processing, multimedia development
tools, and collaborative work applications (e.g. Lotus
Notes). Investments or partnerships which accelerate the
development and diffusion of such technologies and
applications will ultimately boost the demand for broadband
satellite services. Intel has used this strategy very
successfully — by investing in software companies
whose applications require high-speed processing, Intel
has expanded the market for fast microprocessors such
as its Pentium product line.
Work with end-users on issues such as standardization and application development. Satellite operators
can form formal or informal consortia of end-users in
key application markets, such as education or corporate
networking, both to identify key user needs and to
develop standards and applications which are compatible
with the capabilities of broadband satellite systems.
Identify key complementors and encourage their development of broadband-based products and services.
Broadband satellite operators need to track the
efforts of content developers and support their moves to
create new broadband content. Such developers include
movie studios, television programming producers, interactive
game developers, and distance learning providers.
Broadband satellite operators can form preferred distribution
agreements with those developers, so that the
operators’ end-users have early access to such content.
Utilize partnerships with government and university research bodies to support research in multimedia applications and satellite technology. Funding
advanced research in multimedia applications will help
in the search for the “killer applications” which could
spark broad interest in broadband satellite service. One
such partnership is already underway in Israel. The Israeli
Inter University Computation Center has established
a protocol gateway to link its domestic ATM-based OC-3 Internet backbone to a T3 45 Mbps satellite link, operated
by Gilat Communications, which in turn links to
the international StarTap point of presence in Chicago,
Illinois, the connection point to the US Internet2 project
(Palter and Nussbacher, 1999). Fundamental research
into satellite communications can aid in finding solutions
to the technical challenges mentioned throughout this
paper. Such research requires both basic study of communications
environments with applied research techniques,
necessitating a combination of the approaches of
government, university and industrial research
(Carayannis and Alexander, 1999).
The market and industry surrounding broadband satellite
services will co-evolve with the markets and developers
for interactive multimedia applications. Satellite
operators will need to look beyond their immediate target
customers to identify long-term opportunities to create
new markets for broadband service. They will also
need to develop innovative approaches to dealing with
competitors in broadband communications, in hopes of
avoiding price wars and other types of damaging competitive
behavior. The first task in pursuing such strategies
is to identify significant potential partners outside
of the traditional satellite industry, including partners in
software, content, computer technology, and Web services,
and to initiate relationships with those players
which will build grassroots demand for applications
which can be delivered via broadband satellite. [1]
References
[1] E.G.Carayannis, J.Alexander
"Virtual, wireless mannah: a co-opetitive analysis of the broadband satellite industry".
