Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@rcrwireless.com.
The changing landscape
It’s not news to any of us at this point that the entire telecommunications industry and the role of service providers in it are rapidly changing. Changing consumer expectations. Changing market demands. Changing – ever-changing – technologies. We’ve seen investments in next-generation networks such as LTE result in unprecedented gains in speed and quality of delivery all over the world. We’ve seen the tremendous growth in the variety of services these gains engender, from diverse digital content to big-data-driven applications to sophisticated location-based services.
Unlike the relative newcomers founded entirely in Web-based and over-the-top delivery, traditional service providers must develop and implement innovative offerings while continuing to support and transform their vast legacy networks, systems, operations and processes. The good news is that the delivery of these disparate systems, services and processes will almost certainly be in the cloud, which can enable the kinds of transformation providers need to extend and defend their market share.
The opportunity
Communication – across networks, systems, partners and applications – is at the heart of many new digital technology offerings. As pioneers in the communications services business, large operators ought to embrace this kind of multidimensional communication as a natural next step. Unfortunately, outmoded business models and a history of inside-out innovation make embracing open architectures and third-party partners to support and grow them a difficult and challenging proposition.
Many big international carriers have tens of millions – even hundreds of millions – of customers. Unfortunately, they aren’t in a position to benefit from those customer relationships the way a company like Facebook can. Facebook and its social networking peers Twitter and LinkedIn – and yes, even Google – can reach hundreds of millions of customers from a common platform and can utilize massive amounts of consumer data to improve the customer experience, drive new revenue, raise advertising dollars and support all kinds of lucrative business opportunities that increase brand value.
In contrast, the many millions of global telecom customers are often dispersed across multiple geographies and multiple systems that don’t always communicate well with one another. In fact, some of those systems and the platforms on which they sit don’t communicate at all. The strong brand equity and the requisite benefits companies like Facebook enjoy are, at best, diluted for telecom providers with similarly large customer pools. At worst, opportunities to streamline for efficiencies and insight – and therefore opportunities to create new revenue streams that benefit providers and consumers alike – are lost, if not for good, for long enough to jeopardize competitive market gains.
With voice and data revenues declining every year in an industry threatened with more agile and unconventional competitors and increasingly data-hungry and price-sensitive consumers, missed branding opportunities add insult to injury. And that’s without factoring in the need for long-term customer loyalty. The needs of everyday consumers are driving the direction of today’s telecommunications businesses, and consumers are fickle. If their provider cannot give them what they want when they want it, they will find a provider that can.
The silver lining is in the cloud
Fortunately, there’s a silver lining. Operators now have an opportunity to build service aggregation businesses that will allow them to take back control of their destinies. To get there, providers need to leverage the valuable assets they have built across their infrastructures, particularly in their CRM and billing platforms, while developing agents of innovation to support more scalable, agile and flexible ways of doing business. In short, they need business models that will help them adapt to changing consumer demands. But they can’t do it alone.
Service delivery in the cloud means providers can easily and seamlessly develop an ecosystem of trusted partnerships, a network of third-party providers that can plug-and-play in a variety of environments and geographies. Providers can then create and support platforms fit for innovation that support both value creation and cost reduction. With fewer capital-intensive investments and fewer long-term commitments to technologies that become obsolete in short order, they can build innovation frameworks in the cloud. Operators that can adopt this model to make applications easier to work with, install more accessible APIs, and take into account the entire innovation landscape, will excel at delivering a distinctive, market-leading customer experience.
Innovation frameworks are powerful:
–Innovation frameworks support service aggregation and collaboration from the outside in, allowing providers to deliver on a variety of shifting consumer trends as they happen – and as they morph into the “next big thing.”
–Innovation frameworks leverage ubiquitous broadband to create more opportunities to generate revenue from traffic and content, speed time-to-market and time-to-profit, and glean actionable insight from enormous amounts of customer data across vast geographies and technology platforms.
–Innovation frameworks support the switch to aggregated services that include efficient revenue-management capabilities with a mix of manual and automated standards such as charging and billing, network mediation, and partner settlement. These businesses help providers avoid the rampant revenue stagnation and margin decline facing global telecom operators.
–Efficiencies supported by innovation frameworks can enable dynamic bundled services, creative and flexible pricing structures, and integration with peer-, competitor- or business partner-owned IT systems.
–Innovation frameworks can also provide operators with an exceptional speed-to-profit engine that supports the applications and capabilities globally connected consumers expect.
Making platforms lighter, more open and easier to access is of utmost importance. Providers that can develop and support innovation frameworks built upon the combination of existing core assets, cloud-based delivery, aggregated services and a strong partner network will garner significant competitive advantage. They will be in the best position to harness the flexibility and responsiveness required to lead the market as the digital economy evolves.
