How can the Telecom Industry Start Growing Again? Part I

By Marc Lippe, Director, Worldwide Field and Corporate Marketing, InfoVista

On the tenth of June, I attended a briefing by our contracted analyst Yankee Group, in London. There were approximately 93 attendees ranging from large and medium service providers, to equipment and software vendors, to consultants and written press.

The president and CEO of Yankee Group – Emily Nagle Green – kicked off the session by introducing the “Anywhere” concept that Yankee has now been using as a continuous thought leadership theme for three years.

As we have seen in the evolution of mobile broadband in recent times, it’s clear that the concept of “Anywhere consumers” is very much aligned to the direction we have been travelling. Emily discussed that these days, communication expectations are high for businesses, business users, and consumers. Access to the internet, its services and applications, is fast becoming a communications baseline, and appetites are continually growing to access more, see more, and do more.

In order to satisfy these expectations, communications environments are evolving to reach everyone, everywhere and in everything. Just look at the environment around you, PCs, smart-phones, social media, internet television, IP telephony – but also smart monitors, hotel doors, office access, shopping loyalty cards, passport chips… we are linked electronically EVERYWHERE we are, whether you like it or not.

Networks that once just connected sites together and were a means for data transport; now need to be seamless, secure, abundant and ubiquitous – and wireless technology is a broad enabler. Users, consumers, and developers are hungry. They continually want more and have the ability to innovate but networks and business models already have to play catch up.

Telco’s and the three faces of Eve

Camille Mendler, Vice President and Senior Research Fellow at Yankee Group drove the first debate session by interjecting three concepts likened to the deadly sins of biblical history. The first, Redemption, highlighted how the industry has changed its approach and investment cycle on a decade by decade basis.

In the nineties, over-investment and exuberance drove the ‘boom’ which inevitably bought about the ‘crash’ of the “noughties” where we saw disinvestment on a grand scale and a macro-level focus on the bottom line. However now we appear to have been redeemed, where the “tennies” will bring new business opportunities delivered through cloud computing, innovative third party ecosystems, and lucrative strategic wholesale.

Gluttony is a great way to explain the next concept, also aligned to the changing communications environment. The nineties and for most of the “noughties,” our networks had – due to over investment – plenty of capacity and bandwidth, but in most cases it was underutilized because access domains had not been invested in and advanced at the same rate. Now that the access (IP DSLAM, Gigabit Ethernet, HSDPA, 3G, devices) have reached a good level of maturity and deployment, we openly demonstrate our gluttonous nature by perpetually wanting more – more speed, more bandwidth, more applications, more mobility…

The last concept that Camille alluded to was Insanity. When polling the audience at a recent service provider event it emerged that over fifty percent of them actually had operational support system (OSS) components that were over ten years old. If service providers want to capture the opportunities of network, services, and applications and enable themselves to innovate, they really need to bite-the-bullet and invest in tools to give them that chance.

In part 2 of this blog, I’ll cover what Benoît Felten, Principal Analyst, had to say on how assets can be used to create new opportunities, and discuss Vice President Declan Lonergan’s take on Anywhere-aligned billing transformation.  You’ll also hear about the three main areas that Yankee Group believes could bring a restart to the Telecom industry. As always, I welcome your thoughts.