Dealing with upheaval

Monte Hong/Accenture
25 Jun 2012

The very definition of the communications industry continues to evolve at an unprecedented pace, as more companies from other industries – including electronics retailers, device and software makers, social media platforms, internet search giants and even auto manufacturers – enter the market.

The new landscape is also marked by a decline in demand for traditional communications services and a growing appetite for new “always on, always connected” services, forcing providers to simultaneously cut costs in some areas and find ways to meet consumer demand in others.

As a result, today’s communications service providers (CSPs) must meet several challenges head on, each of which is strategic to their operations. These challenges are:

  • Identify new revenue drivers as the demand for traditional services continues to decline
  • Launch innovative services
  • Build new networks
  • Examine their role in the digital value chain.

To compete for revenue with a host of new entrants to the market, CSPs should consider making a major switch to new services and advertising-based revenue models. This first challenge – the need for new revenue drivers – creates the associated challenge of building new support systems to deliver the services, which are typically data-intensive.

When it comes to launching innovative services, the consumerization of IT complicates the matter, because businesses are embracing consumer devices to lower costs, increase productivity and improve employee satisfaction. This is creating an enormous push to launch innovative services for the enterprise that allow private and social data from native and web apps to reside alongside mission-critical enterprise data. While CIOs prepare to make significant investments in building and supporting mobile capabilities for employees who are bringing their personal devices to the workplace, they need an approach that is rapid, cost effective, easy to scale and future-proof.

To meet growing customer demand, CSPs should determine how to monetize and support innovative new services that are, by and large, both complex and data-intensive. They should also begin to offer new, smarter, more integrated devices, including integrated smartphones and TVs, connected TVs and other integrated devices.

Those CSPs that manage to generate innovative services to drive additional revenue should dedicate a good portion of their revenue stream to building out new networks to support the new services that customers are demanding.

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