What every Telco CxO must know about competing in the Broadband Era !!!

Presentationx

A historic opportunity awaits the communication industry in the years ahead – a chance to connect 7 billion people using broadband wireless and wireline technologies. But it will take more extensive use of technology with improved performance to offer true broadband connectivity to achieve this level of penetration. Telcos used to be the center of gravity in the mobile value chain, but no longer. In the new basis of competition, ecosystems like Apple iOS or Google Android have become the focal point for service creation and distribution, ironically with help from telcos in the form of device subsidies. In the space of five years, ecosystems have mushroomed to take control of what took telcos nearly 30 years to build.

Telco Execs must understand role of new generation applications, content and platforms to generate revenue from broadband networks assets as well as the critical role of billing engines and CRM systems and how to convert these into revenue generating assets. Success in broadband lies not just in deploying exciting new technology, but specifically in deploying a network and service creation infrastructure that is both cost effective, and capable of delivering – over time – the range of services that appeal to potential subscribers .Operators evaluating broadband ( wired and wireless ) investments must extend their consideration beyond the accepted virtues of the technology and consider how the platform fits into their specific near and long term business model, measuring cost of ownership with potential for harnessing time-to-market advantages to grow subscriptions and generate revenue.

Today, communications service providers deliver traditional and IP services that span voice, data, video, content, prepaid and postpaid, fixed and mobile. To succeed, service providers must change to an infrastructure that supports new business models, real-time customer interactions, and new partners and channels. Driving this transformation are underlying business applications such as billing and revenue management (BRM), customer relationship management (CRM), and enterprise resource planning (ERP). The new enterprise opportunity is a credible source or new revenue but there is still great confusion over where to start, how to scale and which divisions within telcos should be targeting these markets. Cloud Computing has captured the interest of enterprise customers because it offers flexibility and an ability to control costs. It fits well with the new Telco philosophy as it is about supplying assets as services

While designing new business models, Broadband operators must deploy networks with capabilities, such as mobility, messaging, location, presence, profile and call control, and combine these with internet-style services such as social networking, search, advertising, direct marketing and mapping, thereby enabling richer, more compelling and more personalised services than the Internet players can offer.Instead of creating and distributing mobile applications themselves to their subscribers, mobile operators must increasingly add access to multiple wireless stores on their devices.

In many ways, the switch makes mobile operators look more like owners of a shopping center, while device makers, operating system developers, and other third parties own the shops that sit in these virtual carrier malls. While this new model has spurred a great deal of innovation, it’s also fragmented the market. And even though, operators may not be selling these virtual goods to consumers, they still want a portion of the profits since they have invested billions on the access networks.

Media convergence is becoming a reality. Carriers must start to integrate IPTV, mobile TV and Web TV/video offerings into an integrated user experience in and out of the home, and build new value added services on top of it. The new media offerings and ways to deliver content over-the-top are fast emerging as a sound way to distribute and consume content online. The vast amount of content (video, audio, photos, etc.) suggests that a new way to discover media and personalize the experience is needed. Creating a next generation telco means looking beyond traditional telco business models in the context of the changing telecom value network. Some of the key competencies to be mastered by self respecting Telco execs include :

  1. Analysing the current and future technology investments from business and technical viewpoints. In addition review the key customer drivers and applications that generate fast ROI based on understanding the needs of target markets. Conduct a network inventory to identify and retire and redundant network elements
  2. Investigate how to incorporate Web 2 / Telco 2 paradigms into the creation of your product portfolio. Web2.0 is the new generation of web services, characterized as more open, flexible and participatory in terms of creating content, applications and collaborative alliances.
  3. Strategise capabilities to overcome OTT net players to make money from higher value added services by implementing “ smart pipe “design. We must assess every aspect of the network from its underlying hardware and systems to its configuration, capacity, traffic flow, and survivability.
  4. Perform a thorough evaluation of the operations, identify the gaps between the current methods and the future vision, define new job functions and processes, prepare a road map for transformation, and facilitate the migration process.
  5. Streamline the architecture with the judicious use of web services and services-oriented architecture (SOA). In addition to streamlining the network management systems environment, platforms and tools that enable service and customer management need to be introduced.
  6. People and human resource skills must be upgraded to meet the needs of the new organization structure and new IP based technologies .Nimble, efficient operations rely on modern business processes, management practices, and human resources
  7. Have a clear view on the risks and formulating mitigation strategies. Risk assessment must extend beyond the usual financial and regulatory risks to consider the wider environment in which the organization operates and the full extent of its operations, now and into the future. A failure to shift the business model from minutes to bytes , misunderstanding the changing customer mindset and insufficient insight into latent data assets are such risks.

The so called “Web2.0” is the most influential driver in the combined Internet and telco industry. Players like YouTube, Facebook and MySpace have become some of the most used services and known brands on the Internet. OTTs do not compete for telco service revenues; instead, they compete to control key links in the digital value chain, with business models that span consumer electronics, online advertising, software licensing, e-commerce and more. Telcos must diversify data products are beyond the simple SP , with a mixture of hybrid consumer and business products and fixed/mobile products.the telco digital business needs to be measured not by direct revenues, but according to whether it helps to grow and protect core telco business by increasing usage, creating user lock-in and driving subscriber acquisition.

Telco professionals are facing a bewildering array of technology innovations that span the hardware and software worlds. In addition to grappling with the many new business implications, they are challenged, to reengineer and digitise their organizations to empower people to pursue disruptive business models and breakthrough innovation.The new, digitally connected world is driving transformation, bringing with it new players, advanced applications, broadband services and higher QoS demands. Seizing this transformation by making your business and technology evolution work together is the key to profiting from market changes.

Telcos are being disrupted because the basis of competition in mobile has fundamentally changed. It has changed from “reliability and scale of networks” to “choice and flexibility of services”, representing transition from “mobile telephony” to “mobile computing”. Telcos need to move their innovation focus from technologies (be it HTML5, NFC, IMS, VoLTE, M2M or RCS-e) to ecosystems. That requires a much better understanding of how ecosystems are engineered, and how ecosystems absorb and amplify innovation. The change in the basis of competition is fundamental and irreversible.

Sadiq Malik ( Telco Strategist )

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