Responding to customer demand for wide-ranging fixed and mobile application services creates complex problems for communication service providers, and establishing a service delivery model requires more than deploying switching in the core and edge. The complexity of next-generation networks makes legacy networks look simple.
To keep pace with and keep track of users and their usage patterns, service providers have to deploy service delivery platforms (SDPs), operations support systems (OSS) and billing support systems (BSS) that deliver the in-depth capabilities that help create and manage all the new services, while enabling service providers to bill for them. They must also consider ways to unify their product catalogs to manage product lifecycles effectively.
Demand for application-focused products catalyzes growth in access and long-haul services and equipment. IP transport and services, according to market research firm Ovum, grew 37% in 4Q07 compared with 4Q06. Ovum estimates that revenue exceeded $1.5 billion. During the same period, the company said that Ethernet transport and services topped $1 billion, up 14% from 4Q06.
Overall telecommunications equipment sales in 4Q07 grew to $2.94 billion, a 17% increase compared with the year-ago quarter, according to Ovum, which also said no significant market share movements took place.
Access services growth is starting to slow down as most U.S. homes have access to some type of high-speed service. Ovum said broadband remote access servers accounted for sales of $210 million in 4Q07, down 9% compared with 4Q06. Growth could come from new home construction, but current economic conditions support little expansion there. Consumer spending is down overall, and that could also affect access growth.
A bright spot could appear, however, as consumers and enterprises shift their access services to the newer fiber technologies that service providers (Verizon's FIOS, for example) are currently deploying throughout their operating areas.
Moving past access and transport services to the applications and management creation environment, service providers acquire the capability to go to market in near real-time with new products and services. Quickly supporting and delivering voice, video and data in a consistent manner can prove difficult because customers want to mix and match the various media in ways that range from media downloads to streaming video and Web-based conferencing.
Service delivery platforms must hit the mark
Building and deploying service delivery platforms establishes the network environment service providers need to create multimedia products and services. Internal TSP politics and procedures aside, service delivery platforms could allow carriers to develop solutions that cut across product lines, as well as legacy and third-party systems. Missing the mark on new solutions and services can incur customer revolt and encourage churn; both negatively affect service providers' top and bottom lines (no surprise there).
As they install service delivery platforms and the network infrastructure to support applications delivery, service providers will simultaneously have to deploy all the OSS and BSS necessary to keep track of mobile and fixed users, as well as new and old applications and customer relationship management (CRM). Every OSS/BSS element must relate to its legacy and planned counterparts seamlessly across organizational and product management departments. Department and product borders that grew up and matured in the era before integrated, content-oriented and interactive services have no place in the NGN environment.
Communication service providers deploying next-generation networks must recognize that each new product and service will either complement or replace an existing one. It falls to product managers to negotiate the rate at which products roll out by considering customer expectations, as well as their own product lifecycles.