In the constantly evolving telecoms market, there are some things we presume to know with a degree of certainty. Among them are that the future lies in digital services; that competition for the subscriber is fierce; that walled gardens don’t result in healthy, flowering plants (and they never will); and that strong and attractive (to the end user in particular) partnerships are table-stake requirements for success.
There’s a trend hidden in all of this, and beyond. That is, flying solo is no longer the route to success. Yet despite these realities, many CSPs are still struggling to capitalize commercially on the exciting opportunities presently on their doorstep. We know why this is the case: because being experts in networks and infrastructure is the traditional industry strength. But the successful modern CSP is a marketing organization and the transition from one to the other has been, to put it mildly, a challenge for many.
The new digital landscape
If we’re going to think about the future of telecoms services, as good a starting point as any is defining the incoming and increasingly familiar characteristics of the new digital landscape. What are the infrastructure changes with which end-user services must both keep up and capitalize on? First, it’s a shift from discrete network elements to an independently managed, virtualized communications and cloud infrastructure. The benefit here is a shift from expensive and hard-to-manage discrete network elements to a virtualized environment that’s easily run at a far lower cost. The first manifestations of this transition were driven by Network Function Virtualization and Software Defined Networking.
Second, there is a move to uniformly orchestrated security. Digital services have higher security requirements, so security needs to support the full technology stack, the data, the service creation process, the partners, and the physical environment. The increasing importance of IoT adds to this challenge.
Third, a change in data usage comes from a limited to a uniformly orchestrated, data-driven enterprise. Central to the digitally transformed telco is a consistent approach to the collection, analysis, distribution, security and monetization of data collected from multiple sources. Digital success is largely dependent on how well data is leveraged, both for internal business optimization and external monetization.
Fourth, we’re seeing the emergence of an Open API platform architecture. Digital transformation means an end to traditional telco closed IT architectures. Open platforms and easily accessible APIs are required to support the development of both internally developed own-brand services and externally developed third-party services.
Fifth, the service revolution means a diverse portfolio of digital services. Digital transformation enables telcos to expand their service portfolios to offer new suites of digital services and address new vertical markets with strong revenue growth potential. And sixth, building and supporting a vibrant ecosystem of partners is crucial. Transformation means CSPs ceding control of traditional relationships with vendors and partners and replacing these with a more diverse ecosystem in which partner relationships are managed in new ways.
There is more, such as replacing a limited set of business models with multiple, innovative business models across the market. It’s critical for telcos to develop new flexibility in how they create value for both themselves and their partners. This means new operational models and new business processes are table stakes. This shift will require a culture change. Taking all the above into account, culture change—the shift from being a traditional, network-centric organization to partner-driven, diverse service portfolio company—requires a totally new mindset, particularly to compete effectively with OTT players.
Read it in