Communications service providers (CSPs) for the most part still enjoy a healthy bottom line. It is mostly their future that people question, always worried about some nimble, innovative company toppling the CSP business model and relegating them and their brands to anonymous, publicly irrelevant background infrastructure providers, writes Tim McElligott, senior consulting analyst at Stratecast | Frost & Sullivan, Operations & Monetisation Global Competitive Strategies
In the early days of competition in the mid-1990s this fear was pronounced but overblown and misplaced. As time moved on the threat got more real. It came from a different band of competitors steeped in the Internet Protocol (IP). But still the threat was not as imminent as imagined. So is the threat today from internet-era companies with the power and money to try just about anything they please as dire as we sometimes make it? Perhaps, but at the same time CSPs appear to be on the cusp of radical change that has the potential to not only turn back any threats but turn them into assets, and, surprise surprise, even monetise them.
Consequently, Stratecast believes the communications industry is about to enter a new era of managed services, particularly managed CSP operations services. The transition would be tough enough even if the industry was evolving simply from legacy network technology to the new virtual network technologies. However, we also must consider the differences in scale when servicing the Internet of Things and small-cell networks, and in the complexity of shared networks. The trend towards a personalised approach to the enterprise market also must be taken into consideration. Together, the challenge becomes even more daunting.
So the opportunities in managed operations services grow more enticing every day for both CSPs and their suppliers. Managed CSP operations services have mostly been comprised of network planning, network deployment, ongoing network management and performance management. The sector is beginning to expand as suppliers are winning contracts for a wider variety of services, including operations and monetisation (formerly OSS/BSS,) IT infrastructure management, business process outsourcing, service layer management, service operations centres (SOC,) managed customer experience and more.
Few companies have the capacity to provide such services to tier one CSPs. Ericsson, HP, Huawei, Nokia and Alcatel-Lucent are among the leaders and control approximately 80% of the global Managed CSP operations services market. Some have exited or limited their approach to this market over the last two years only to jump back in recently. To see what these suppliers have been up to lately and to get a sense of how the managed operations services market is developing with the influence of NFV and other new technologies, see the latest report from Stratecast: OSSCS 16-01, Managed CSP Operations Services Poised for a New Era of Growth, January 2015, or e-mail Stratecast at inquiries@stratecast.com.
Written by: Tim McElligott, senior consulting analyst, Stratecast | Frost & Sullivan, Operations & Monetisation Global Competitive Strategies
