Telecoms must change. That’s the message from a new report by Informa Telecoms & Media, a research firm that released a new report on the industry last week.
The report found that the telecom market is evolving due to the mobile revolution, IP-communications and services such as Skype. Voice revenue is eroding, Web-based and over-the-top services such as Skype and WhatsApp are eating into service revenue, and total profits in the value chain are decreasing as more and more people embrace voice-over-IP (VoIP).
“Operators need new ways to counter this erosion and new paradigms to follow in order to remain relevant in the fast-paced, user-driven telecoms market,” noted a statement by Informa.
To meet the challenge, telecom operators need to adopt new technologies, concepts and processes from other industries to compete, including practices from IT and Web firms.
“However,” noted Informa, “in order for these concepts to be truly disruptive and drivers of growth, operators are now finding out that they will need to transform their operations and businesses first.”
Telecom network practices have traditionally relied upon dimensioning, deployment and upgrades. But now they need more. Technologies such as all-IP networking, IPv6, SDN and virtualization are considerably different technologies from those the operators have been accustomed to using, and they require a significant realignment in thinking by telecoms if they are to be fully utilized.
Also, the access, core, transport, service provisioning and signaling parts of the network and OSS require significant upgrades if telecoms are to adapt to current requirements from Internet users. New services now need to be created in days, not month.
“Mobile and fixed operators are under a considerable threat from parties both inside and outside the traditional telecoms value chain,” said report author, Dimitris Mavrakis, who is the principal analyst at Informa Telecoms & Media. “Given the threatening economic environment, operators are scrambling to find ways to optimize and transform their business."
Telecoms need to get lean and open, he said.
"Operators that can transform into agile companies that operate lean - and preferably more open - networks will be the winners of tomorrow," he noted.
The report also stressed that end-to-end infrastructure vendors are well-positioned for the transformation, although they will have to avoid vendor lock-in. Specialist vendors will have a harder time due to their limited network footprint.