Crunch time for the telecom industry

Martin Creaner/TM Forum
06 Mar 2013

As the communications industry continues to change before our eyes, it’s time to stop analyzing these changes, and instead seriously think about how are we are going to adapt. This will be the major theme of TM Forum’s Management World Asia conference in Singapore, March 12-13, and the focus of my opening keynote.

Now is decision time for players in an industry that’s been typified by the service provider doing everything – from owning the network, running it, creating services, delivering them directly to customers and managing back end operations such as billing and customer care. This scenario, which has been the way of the world for decades, is slowly disappearing thanks to disaggregation. While some players will continue to want to do everything in the value chain, increasingly the vast majority of them will decide that there are certain things they will do, and hopefully do well.

Picking Your Place

The Asian market is no stranger to industry disaggregation thanks to a number of government-driven approaches. Surprisingly there, disaggregation didn’t kill incumbents; rather it created different routes to market and allowed different players to work together to bring an offering to the customer base. For this reason, Asia is significantly ahead of the rest of the world, and we’re already seeing the results with a vibrant market for digital services coming to life across the region.

So how does a global service provider find its place in the complex digital marketplace? It helps to start looking at who owns the network. Service providers will often say they own the infrastructure, but in reality a big chunk of services may actually be sitting in the cloud. For example, Amazon’s cloud services may be used to deliver services. So service providers such as Amazon may not fully own the infrastructure—and in fact there are many who don’t own any network infrastructure at all. Instead, they’re buying capacity on someone else’s network, much like the MVNO model that’s been around for years.

But increasingly, we’ll see a move away from the MVNO way of doing things to a business model where providers are able to run their services over any network with no particular loyalty or deal with any one of them. Instead they may create generic services that have more of an open trading interface with the infrastructure layer, whether that layer is cloud-based or the traditional communications network.

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