We're living through a massive disruption in business and social interactions. This revolution requires permanent and intelligent transformations in operators' network investments.
As we migrate to a converged networked environment, operators face greater challenges to innovate, deliver and bill services that meet the demands of what Yankee Group calls the 'anywhere consumer'. Convergence of new services creates an intense challenge for bandwidth management.
Driven principally by increased traffic growth in the IP network, operators must address these questions about their investment challenges:
- How do we build a network that manages and enforces the growing demand of subscriber - and service-level polices in a converged network‾
- How do we meet the demand for premium broadband‾
- What are the key services we want to deliver‾
- How does that affect our investment strategy‾
In a recent report, 'Anywhere Network Intelligence Will Lead Service Providers to Profitability,' we underscored the challenges stirred by an increasingly converged networked environment. To address the challenges, Yankee Group believes it's imperative that operators quickly develop the right technologies to make the IP network more intelligent. Our research shows that enhancing specific technologies and rapidly deploying personalized services will be the path to making the network smarter and yield higher subscriber growth rate and profitability.
Making it happen
Investment in capacity upgrades alone won't be enough to make the network work smarter.
The key technologies driving the intelligence of the network of the future - the anywhere network, which Yankee Group defines as a seamless and always-accessible intelligent infrastructure that provides a connection for everyone to everything from anywhere --include specific IP transport layer technologies, such as deep packet inspection. Operators that manage DPI for more strategic functions such as traffic shaping will drive revenue up.
Some advanced operators in Asia have already recognized the ROI from designing a more intelligent network through these technologies such as PCCW. The incumbent operator in Hong Kong has deployed policy management and intelligent switching and routing systems to manage subscriber requests more efficiently in real time. This exactly makes its network more responsive and predictable for services its customers are paying for.
The evolution of ubiquitous connectivity - or 'anywhere', as we call it - will change not just the scale and nature of connectivity itself, but its economics. Traditional operator business models will become obsolete as the dynamic nature of the anywhere network transforms everything it touches.
Operators face another, perhaps even more daunting investment challenge: recognizing the needs of the anywhere consumer.
What's a viable economic model for introducing networks and edge technology in places where the GDP cannot support the full cost‾ Advertising. Although consumers accept the financial support of advertising for all other media experiences, it will take patience and education for it to enter communication networks. Anywhere consumers also need personalized services. These new services will create the revenue opportunity for service providers that can lead to the next trillion-dollar market.