Rescuing the service provider

Jonathan Bell, OpenCloud
14 Aug 2009

The last five years have seen unprecedented changes in the mobile industry, in particular in the equipment supply chain.

Pursuit of an all-IP future has seen development in TDM network equipment halted, and loss of the specialist skills required to enhance proprietary infrastructures. With 90% of all telco revenues still generated by person-to-person (P2P) communications — namely voice and SMS delivered over traditional TDM — the idea of an all-IP network looks a significant risk in the current market.

However, a combination of heritage telco and new internet technologies offers a pragmatic escape route for the stranded service provider.

Back in 2004-05, the road ahead was IP-based mobile communications services. Vendors jumped to create solutions that service providers, looking at an increasingly bleak future for voice (the current number-one revenue generator), enthusiastically accepted.

Research dollars were reassigned to IP solutions and support for legacy kit, like those of the first-generation Intelligent Network (IN), has subsequently been “end-of-lifed”. Consolidation has also left many vendors with “two of everything”, an unenviable position in any industry under price pressure. As a result, duplicated equipment lines have been terminated and hundreds of legacy-skilled engineers have been lost to natural wastage, redundancy and retraining.

But then 2008 came around and the global economy nose-dived. Reducing network capex and opex is no longer a priority, but a necessity.

Large core-network projects are being scaled down, migration strategies are heavily scrutinized, and the all-IP future originally envisaged by both the vendors and service providers couldn’t be further away. Today we have a generation of established providers with an incredibly uncertain future, stranded in no-man’s land between the business imperative to create innovative and compelling services for today’s consumers, but struggling to do so on existing heritage (and end-of-lifed) infrastructure — without either the product support or the in-depth technical understanding of the network that has, historically, characterised their relationship with the vendor.

Amid all this change remains one underlying constant: today’s established mobile service providers offer the same set of services, based on the same (or similar) network technologies as their competitors – i.e. the Intelligent Network (IN) architecture and SS7 signalling.

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