Working with the enemy

Staff writer
23 Feb 2012

Today's communications service provider is having to grapple with declining voice revenues and exploding data usage without a commensurate increase in revenues. Infrastructure and technology investments have to keep pace with the data demands of customers and CSPs are transforming their operations looking to become more efficient and, in the longer term, reduce costs.

However, this is not the only option open to them. Developing and adopting new business models is equally important, as is the agility required to adopt them in a timely and cost-efficient fashion. The immediate response is for operators to clamber to provide value-added services to their portfolio in the hope of capturing some extra dollars from the budget-minded "data smugglers" using their networks purely as portals. This may generate some extra cash flow, but the jury is still out on whether the investment in things like application stores, syndicated content, games portals and electronic shopping malls will even be profitable. This is not the sort of business a CSP is necessarily good at anyway.

A better option may be to create new revenue streams through partnerships by teaming up with parties that are doing well at providing the services that are not necessarily in operators' DNA. Those that have "opened the kimono" to third parties have demonstrated that in-house assets like service delivery platforms, pricing catalogs, policy management and billing are ideal mechanisms to expose and utilize.

But are they able to change? Jonathon Gordon, director of marketing at Allot, believes "some will, some won't - survival of the fittest will definitely kick in here. The telcos that can turn the ship faster will benefit and thrive; those that can't will fall by the wayside. The ‘nouveau-telco' is a sleek, agile operator that can take advantage of new opportunities in real-time."

Elitecore VP for new business development Vaibhav Mehta, agrees. "AT&T has tied up with Amazon to deliver Kindle in the US. However, the road ahead is far more difficult and challenging for other kinds of partnerships with OTT or content providers because operators cannot simply get by with providing basic internet access and erecting a fancy toll-booth to charge users for data consumption."

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