The four faces of B2B2C: Telco+enterprise makes business personal

Traditional verticals like finance, logistics, education, healthcare, printing, F&B, and the transporation industry are going digital fast. But, Internet Plus is not just about e-commerce – it is in fact the complete transformation of business models. Internet Plus offers a new way of growth by promoting economic digitization. A digital economy is hugely beneficial: It optimally allocates the factors of production and maximizes the integration effect, binds the online world with socioeconomics, and puts in place workable business and economic models with the Internet serving as the infrastructure and providing the tools.

Internet Plus for telcos

There are two types of telco models when it comes to convergence: B2B and B2B2C. B2B regards business users as end users, with telcos providing products such as cloud, big data, industry applications, and networks. However, traditional IT enterprises have been owning the competition due to their clear advantages, meaning that telcos need to get more involved in IT infrastructure like cloud and networks to grow in stature. 

The B2B2C model in many ways offers the business nutrients for growth. Telcos can import the Internet gene in the form of cloud computing, e-commerce, and big data, and enable businesses to serve the end user with something approaching a ROADS experience.

The B2B2C model in an O2O (online-to-offline) format can really make the opportunities for telcos limitless.

The four faces of B2B2C

In the B2B2C business model, end users exist in the B and C domains as current or incremental users. Four sub-models exist under the main model.

Type 1: End users are current users of both the vertical and telco

Let’s imagine Thomas walking to the office one day when he smells coffee and, at that exact moment, his cell phone beeps with an e-coupon from Starbucks, persuading him in a nanosecond to drop in for a brew. The real-world Starbucks-telco cooperation model sees the telco sharing data on customers’ spending habits, including time, place, and beverage preference. When the network senses a customer in the vicinity of a Starbucks, it sends the subsriber coffee coupons based on what he or she likes to drink. Likewise, DoCoMo NTT and McDonald’s have established a joint venture to mine user behavior data and send e-coupons to encourage users to keep on buying their preferred choices from the fast-food giant. 

In this model, the telco (B) and traditional vertical (2B) share current users’ data to categorize users and provide them with personalized O2O services whereby the telco uses its network to promote repeat purchase habits. The business helps the telco provide VAS, increasing the value and loyalty of current customers to both businesses.

Type 2: End users are telco subscribers and incremental users of the vertical

With 33 percent of it’s population over 60, around 12 percent under the age of 14, and a fertility rate of just 1.26, Japan’s aging problem is a huge issue for the nation. One infrastructural problem that’s happening is the strain on healthcare facilities, leading to a stark choice for providers: maintain medical quality or expand capacity. 

NTT DoCoMo and Omron’s joint venture DoCoMo Healthcare seeks to ameliorate this problem with a mobile medical care solution for families that provides Omron equipment on phones, including blood pressure and sleep monitoring apps. With 1 million DoCoMo users jumping on board for the service at the get-go, the partnership makes it easier to collect and collate patient information and remotely monitor patients, while cloud computing improves information management. Using big data analytics, users’ health reports can be sent to hospitals, and – for the telco – fees can be charged in the form of different service packages. 

In neighboring China, the BFSI industry is benefiting from this model, with China Unicom importing its first customers to take advantage of the Shanghai Bank-Unicom joint credit card.

Habitual Internet users want increasingly personalized services for things like health and adult education, and telco-enterprise collaboration is an effective way of going about this. Telcos also benefit the vertical by enhancing enterprises’ service portfolios and reach, importing users to the enterprise and rapidly expanding the user base. In turn, the vertical enables the telco to provide VAS that users want, thus increasing user value.

Type 3: End users are incremental telco subscribers and current users of the vertical 

In Europe, the US and Japan, the competitive nature of the automotive insurance industry has prompted some insurance companies to introduce UBI (Usage Based Insurance), which makes fees dependent on measuring the type of vehicle against time, location, distance, and behavior. UBI saves users more than 20 percent on insurance premiums and can cut claims on the most common accidents by 12 percent. Back in 2011, the largest insurance company in the US, State Farm, began cooperating with Verizon to offer UBI services, including data analysis, diagnosis, roadside assistance, and anti-theft. Under the partnership, Verizon provides the big data analytics platform and network access services for UBI. 

Fiercely competitive verticals want to introduce e-commerce, big data, social networking, and other Internet elements into their business models to reduce OPEX, boost current users’ value, and reduce churn. In this model, the telco imports online capabilities and develops incremental users from the vertical. 

Type 4: End users are the incremental users of both the telco and vertical

In May 2015, Cudoon and the Industrial Bank jointly brought out Xing Dong, the first wearable mobile payment solution in the form of a smart bracelet, as well as other favorite functions like a pedometer and heart rate monitor. The partnership completemented this with a credit card. 

For mainstream customers, the telco and vertical jointly innovate Internet products and provide rewards like points and coupons for incremental users to subsquently make purchases. This model can quickly attract new users. 

When to apply the four models

The four B2B2C Internet Plus innovation models can be used in different stages of the development market. 

The first model is mainly used when telcos transform from demographic dividends to traffic dividends. By providing end users with an easier way of buying things, telcos can increase current user stickiness and boost their value. The second and third models are mainly used in the transition period from traffic dividends to data dividends. Giving end users personalized services lets telcos maintain and increase user traffic and usage. 

The fourth model is mainly used in the transition period from data dividends to information dividends. Combining end users’ online features offered by the telco with the offline demand trends stimulated by traditional verticals lets both innovate online products and services, and thus expand the market.

The B2B2C model helps verticals provide more personalized products and services. In this space, telcos need to establish an Internet operating platform to import Internet genes into traditional verticals and provide a ROADS experience for end users.