Beggars shouldn’t be so generous even if they are sitting on golden stools
There are three statements in this issue of VanillaPlus that go straight to the heart of the challenges that communications service providers (CSPs) face as they restructure, refine and re-align their businesses for the era of virtualised network technology that supports new services. The statements are straightforward but mask a series of complex tasks that relate closely to each other
The first statement is on page 55 where Netscout’s John English tells Nick Booth: “Being everything to everyone for free simply won’t work.” This goes directly to the challenge facing CSPs which can no longer rise to the challenge of users’ ever-increasing demands for bandwidth without finding ways to monetise more effectively. Yes, new technologies and virtualisation in particular offer an opportunity to make operational cost savings but the emergence of ultra high definition video and the billions of admittedly low bandwidth Internet of Things devices, will put strain on networks at a scale that has not been seen before.
CSPs therefore need to find new ways to monetise their infrastructure that go beyond the commodity sale of capacity. Their track record hasn’t been impressive. They’ve largely missed out on monetising mobile content, mobile music, mobile gaming and social media but the innovation wheel turns perpetually and IoT and big video are now here and presenting additional new areas in which CSPs can add value.
This brings me to the second statement which is in Machina Research analyst Matt Hatton’s Analyst Report which starts on p40. Hatton recalls a book about South American economies in the 1950s. The title was ‘Beggars on Golden Stools’ and he sees CSP attributes in IoT as having extraordinary potential value. The challenge for CSPs is to unlock that but we shouldn’t so readily accept CSPs’ complaints that they’re not getting a fair share of new service revenues when such wealth remains to be fully exploited in their existing infrastructure and systems.
The final statement, from Stratecast | Frost & Sullivan analyst, Tim McElligott, in his report starting on p21 addresses the technological transformation CSPs are going through as they virtualise. This is seen as a disruptive and enormous task of a scale never previously seen but McElligott distils it down into the historical content of telecoms and says: ‘The greatest challenge turns out to be what it has always been: interoperability’.
As the industry heads of to Mobile World Congress, there’s no doubt the telecoms industry is facing great challenges but also renewed opportunities with new infrastructure and new services, but it really is true that there is nothing new under the sun.
Enjoy the magazine!