There is a strong business case for enabling third party applications. Yes there are significant challenges for network providers under this model, it requires careful analysis, planning, and understanding of implicit tradeoffs, but as a recent article from Alcatel-Lucent (News - Alert) explains, it deserves careful consideration.

"Alcatel-Lucent performed extensive economic modeling," company officials say, with the goal of providing "a solid understanding of the basic business case options, including key revenue and cost components, drivers, and tradeoffs between models and scenarios."

The company summarizes their analysis of the various business models. "Network providers are challenged with selecting an appropriate approach and building a business case that is aligned with their strategic goals and tailored to their individual situation," they note, adding that they "identified core business models, representing the major approaches employed by network providers for ACP collaboration."

Operator Led. This is the model where a network provider takes full responsibility for the program and establishes direct, standardized relationships with many ACPs.

Aggregator. This is a partnership approach where responsibility is shared between the network provider and content aggregator.

Mass wholesale. Here the network provider grants ACPs access to the network, but has no direct relationship with end users.

Enterprise customer. In this one, the network provider enables enterprise owned applications, rather than providing the application directly.

Internet Model. Here network providers are not involved in the creation of new applications or services, choosing instead to provide bit delivery only.

Through their modeling and analysis of network provider economics, Alcatel-Lucent officials say they have developed "a solid body of experience and modeling capability that helps NPs during the early stages of their ACP business model development." And indeed there is much more good, useful advice available in the article and from Alcatel-Lucent itself.

Though the market is still young, "the emerging business models and their economics are already understood with sufficient confidence to allow for more in-depth analysis," the company concludes.