Can CSPs become digital service providers

Tony Poulos

Can CSPs become digital service providers

October 15, 2012

As featured on TM Forum's the Insider blog

The Insider had the pleasure of attending CSG’s EMEA user conference last week and both presentations and debate were lively. Not surprising that digital services, and how they should be managed and charged for, was one of the hot topics.

One panel, composed of two CSPs, a CSG executive and Dean Bubley, of Disruptive Analysis fame, were asked if they thought CSPs could successfully transition into becoming fully-fledged DSPs (digital service providers).

Needless to say eyebrows were raised, yet all but Dean agreed they could. To be fair, even Dean admitted that some would be able to succeed - but was careful to emphasise the ‘some’ part.

Earlier presentations had highlighted the inherent DNA of CSPs, and the lack of ‘digital services’ blood flowing through the veins of most, a situation not likely to change in the short term. It raised the question of how this would be achieved and which CSPs would be most likely to embrace the digital services world and become much more that the carrier of its traffic.

When news of the three to one vote hit the Twittersphere, howls of derision were heard from some quarters. “I don’t believe CSPs can do it. They’ve tried. They’ve failed,” was one notable example. Was the result skewed because two of the panellists were CSPs not wanting to admit defeat before the battle had even begun?

What are the barriers anyway? Well, if you take Telefónica Digital as an example, and it’s early days yet, setting up a completely new and separate division at arms length from the tentacles of the staid CSP HQ, is probably a good start. It is certainly making lots of noise and getting lots of attention, but it is just beginning to get its stride. Investing in many small start-ups with promise is a model that venture capitalists have relied on for years, after all. Having it run by non-telco people is another. Digital services people like advertising people, are a different breed altogether.

Let’s also be clear that even though digital services, in one shape or another, have been around since the earliest days of IP and internet traffic, the new breed is addressing untested avenues and pushing the boundaries of existing digital thinking. There are not that many people on the ground that can say they have been successful at it, so finding the right people to man these new ventures is also an issue.

All this aside, those stodgy old conservative telco boards have to make a radical mind shift to invest in this new digital era with its social networking overtones. Telefónica, and the likes of SingTel and a handful of others are definitely the minority in making early stands. The majority are seeming to take a ‘look and see’ attitude. Not surprising because, for many, early gambits into the content and applications space were unmitigated disasters.

Maybe they should all take note that polls taken at the event that an overwhelming 72% of delegates believed a strategy of co-operation between OTT players and CSPs the best joint value opportunity, so that would be a good place to start. That same grouped when polled about the greatest near-term threats to CSP revenues resulted in 50% rating lack of innovation and foresight by CSP management as the biggest concern, with only 12% believing OTT players are a threat!

So, it’s all about innovation and motivation of management to get serious about digital services in partnership with others and also in developing or acquiring the necessary services and skill sets to launch CSPs into the digital world. That makes TM Forum’s new Digital Services Initiative and MW Americas event, focussed on all things digital, so timely. Are you taking up the challenge?
 

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