Wholesale: Consolidation on the horizon

Joseph Waring
Telecom Asia
BICS chief commercial officer Nicholas NikrouyanBICS chief commercial officer Nicholas Nikrouyan explains to group editor Joseph Waring why multi-service players will come out as the winners in the transformation to IPX
 
Telecom Asia: How is IPX going to transform the way carriers do business?
Nicholas Nikrouyan: One of the first things it's going to do from a commercial model is to change the parameters and the way we look at our P&Ls and our balance sheets today in terms of the profitability of each product line and the way we define it today, which is very much segmented by product and so forth.
 
IPX is going to create an environment where a lot of the retail operators today, where the bundling effect comes in, are going to look at one bundle of pricing from a pricing structure and various levels of service going through it. I think it's going to impact fragmentation in industry, because IPX is an environment where multi-service carriers are going to be the ones who come out as winners in terms of how the market is going to evolve within the next few years.
  
Why do you see the multi-service operators coming out on top?
It's going to be difficult for operators and carriers that are very much focused on a particular product line. Multi-play carriers that are not only in the voice domain or the data domain and carriers that have a global reach from a capacity perspective are going to have an advantage. So basically, [it's] the carriers that are on their own and are multi-service providers today or those that through partnerships can create an environment of multi-capillarity and multiple service providers. It's an environment where bilateral relationships are going to change to a hubbing model, where it's going to be one to many relationships.
  
From that perspective operators around the world are going to look for providers that can do this seamlessly and not have too many providers. Today you see a lot of operators, for example, being interconnected in some cases to hundreds of carriers to be able to manage their voice activities and their messaging and mobile data activities.
  
It is going to go into more of a consolidated view, and operators are going to want to deal with up to a maximum of five carriers that can, from a service level, provide all services.
  
I think we will not see as many carriers in five years time as we do today. It's going to be basically though investments, organic or inorganic activities, that they [the winners] can create an environment where there is one seamless product offering to the custom.
  

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