Engaging the broadband innovation pipeline

Utilising broadband as a pipeline for innovation is the end game for all businesses. While the current debate in Australia has focused on the cost and methodology of delivering a national broadband network, there are plenty of points to ponder when it comes to the overall benefits of faster, more reliable internet access.

The disruptive potential of ubiquitous broadband may seem too risky to contemplate for incumbent businesses, but most are also acutely aware of the risks of staying put.

A recent report conducted by Deloitte Access Economics, at the behest of Macquarie Telecom, highlighted that while most businesses see the NBN delivering substantial benefits to their operations, very few are actually ready for the network. This isn’t a question of technology but essentially a business question.

Just rolling out ultra- fast broadband achieves very little unless the business sector is provided a comprehensive picture of the end-user experiences backed up by viable end-to-end business model.

What the overall value chain looks like is the million - or is that the billion - dollar question.

The team at Alcatel Lucent’s global innovation program, NG Connect, have spent the last three years trying to put the puzzle together. NG Connect is designed to serve as an ecosystem for companies, from disparate sectors, to come together and develop services that harness the broadband pipeline. And it’s coming to Australia.

Alcatel’s VP of emerging technology commercialisation, Jason Collins, told Technology Spectator that the ANZ market provides a fertile ground for the innovation conversation to blossom. No points for guessing what’s driving Alcatel Lucent’s exuberance.

“You guys have uniquely jumpstarted the market here. The question we asked (ourselves) four years ago was how do we get more broadband into the hands of people to drive (viable) business model,” Collins says.

“You guys have answered that question a little bit. You have a piece of the value chain and the NBN jumpstarts it.”

Collins adds that there is no single recipe to success. Alactel’s experience in the US has been to steer clear of a perspective approach and instead encourage ‘orchestrated open innovation’. Now, ‘open innovation’ traditionally refers to leaving the door open for outside influences to play a part in the overall R&D process, whether through licensing of technology or funding external ventures. So where does Collins’ term ‘orchestrated’ fit in the picture?

In the case of NG Connect, ‘orchestrated’ means taking the idea of outside influences to another level, where seemingly disparate industry players (say a media company, a healthcare provider and telecoms vendor) come together to create new propositions, that can eventually lead to viable business models.

The biggest hurdle to this collaboration is the justifiable concern that companies have around their intellectual property, but Collins says that given adequate guarantees, most businesses are keen to explore the potential of opening up new revenue channels.

Alactel harnesses the collaborative energy through the development of service concepts. A process that starts with building a prototype that illustrates the end-user experience. There is the requisite ecosystem of business partners that ensures that everyone is talking to each other but the fundamental plank of the process is building a viable business model. Collins says that Alcatel expends a lot of energy on business modelling, because that’s where the real monetisation magic happens. The service concepts that make the cut get their time in the sun at the Consumer Electronics Show (CES), the Mobile World Congress (MWC) and other regional events across the globe.

Alcatel is hoping to replicate the service concept development experience in Australia and New Zealand. It has NZ telecoms provider, Chorus on board across the Tasman and is talking with NBN Co. The focus of the conversation will undoubtedly be on how NBN Co can leverage the service concept methodology to explain the benefits of broadband to businesses and consumers, with Alcatel the key facilitator.  

Broadband is just one piece of the overall value chain, but it is a fundamental one. The NBN and the UFB in New Zealand are going to provide the critical framework needed to foster ICT innovation. Faster broadband will inevitably disrupt existing business models, but this process of creative destruction will also deliver new models and new ways of making money.

While there is always a tendency for incumbents in their various sectors to try and squeeze every last ounce of profit out of their existing setups, fighting the structural change currently underway will only delay the inevitable. Our media and retail heavyweights have learnt that lesson the hard way but that painful process need not play out, especially if there is a way to participate in the disruptive process.