2017: The old business model is finally killed off

Vision 2017 Supplement

All the technological change in the telecoms industry is pointing towards a more final and ultimate change, the death of the old “telco” carrier model we have known for the past few decades.

We have known it is coming but the last vestiges will be swept away in 2017. All telcos will finally abandon “telco” or “telecoms carrier” on their LinkedIn profiles, to be replaced by a variety of alternatives, the main one being “technology company.” Even “operator” will be an old word.

The old model has been swamped, that has been well documented, but in 2017 the catalysts for change will gain even more momentum. Mainstream telecoms carriers will finally start to mature from the stasis which has gripped them in the last few years, as technologies such as IoT, LTE and the momentum towards 5G. The cloud and all its data implications added to acceleration in mobile comprise the enabling ingredients to a year which will be the end of the current chapter in the story of disruption.

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Vision 2017 Supplement Dec 2016

BSS investments to pay off

A key to all this will be that investments in BSS systems will begin to deliver on their promises. BSS might seem an unglamorous part of the equation, but it is critical as an enabler for the business, for customer experience, for process efficiency and the interface with OSS systems. Part of the issue for operators has been that BSS and OSS have been out of alignment, impeding progress. Prediction for 2017: this situation will improve and some of the results will be significant.

Telcos have got used to owning and operating the network and watch everyone else grow their business from the use of it, apart from themselves. It’s like owning a road and not charging a big enough toll, while the truck operators who use the road are drowning in profits. And while the road has been bearing ever more traffic, revenues have actually been falling.

In the last few years, operators have been struggling with whether to follow a product model or a platform model, whether to collaborate or compete against the new breed of MVNOs out there in the market.

Virtualization to gain ground

Elsewhere in telecoms (or technology if you like), the momentum for virtualization is not going to slow down. Businesses of all kinds are investing heavily in network virtualization, but without the operators to deliver them there is nothing. This is a big opportunity for the operators, and they have been evolving in this way for some time as they adapt to the software-defined service model.

It hasn’t been without pain, but the light is being revealed. Operators who have made these changes will finally be able to deliver more services and bank the cost and operational efficiencies. From some, we might see healthier revenues.

Transformation of this kind, of course, is not a big bang. It has had to be an evolution over time as new models emerge and are embraced and legacy systems are turned off and old processes let go. It requires a process of maturity, which has taken time. My prediction is that in 2017, many leading telcos will have moved forward sufficiently in their evolution to declare to the world that “yes we have transformed” and that, on close inspection, some analysts will actually agree.

This article was first appeared in Telecom Asia Vision 2017 Supplement

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Commentary

Transformation and disruption in 2017

King-Yew Foong/Gartner

Facing market disruption, operators will look to enter adjacent markets to diversify and differentiate

King-Yew Foong/Gartner

Facing market disruption, operators will look to enter adjacent markets to diversify and differentiate

My prediction? That 2017 will see the end of the word “telco” in current usage