The telecom and cable industries face numerous types of convergence, including network convergence, service convergence and now industry convergence. The boundaries between the communications, entertainment and consumer electronics (CE) industries are blurring. Convergence has increased competition both within and across these industries as firms look for new sources of revenue. While bundling has bolstered short-term revenues and improved customer retention, traditional products like voice and broadband are reaching saturation. Meanwhile new entrants are offering alternatives that further fragment the voice and entertainment markets.

Facing these new market realities, service providers understand growth will not come from adding subscribers, but from finding new ways to monetize existing relationships. Leading operators have begun the shift from discrete technology sales like IPTV and DVRs to creating experience-based services such as entertainment services that follow you. While improving product satisfaction and customer care provides a foundation for an experience, operators must build differentiation by working with partners to create new experiential services. The move to experiential services provides new sales opportunities, but also new challenges. To succeed, operators must execute on three fronts: internal development of experiential services, inter-company product development and platforms that expose service attributes to partners.

First, service providers should eliminate the internal product and P&L silos that prevent service innovation. They should then integrate their previously discrete products, such as mobile and traditional TV or broadband and wireless data. These integrated products will drive better experiences by operating seamlessly across multiple devices and a variety of networks. Providers can further enrich the experience by incorporating new services such as presence, location and personalization into these multiplatform services.

Next, service providers should focus on growing their services base by including partners and customers in product development efforts. Instead of offering just internally developed services, operators should seek partnerships with media, CE and software companies to co-develop and co-market new services that will be more desirable by combining the unique capabilities of each company. This elevates the provider from a dumb commodity to a creator of rich experiences. To ensure the right products are developed, service providers should engage customers in product development and refinement through beta releases, developer contests and feedback forums. The operator may act as a large or small contributor to service’s creation and as one of the primary retailers for the service. In some cases, the service providers’ main role may be to serve as the distribution channel.

Finally, service providers should build a platform that allows network and core services such as billing, location, authentication, and security to be embedded in another company’s product offering. The operator’s role in this scenario is to be the experience enabler for as many transactions as possible. While the operator may cede being the branded entity for the consumer’s purchase, it gains revenue and market share by having a component or an entire service white-labeled into thousands of emerging experiential services. This allows the operator to sell into environments where they may not be the preferred brand, but have a unique value proposition within the service.

Today’s market offers consumers more control, which limits any provider’s ability to “own the consumer”. In a world where customers have choice, operators have no choice but to work with others to build experiential services. By being both experience providers as well as experience enablers, service providers will be able to respond and thrive within a rapidly changing landscape.

Maribel D. Lopez is CEO and founder of Lopez Research.