Future Telco – Seven Levers Securing the Future of the Telecommunications Industry
• A new book analyzes important fields of action
• Growth in data traffic demands efficient networks and capacity expansion
• Advantages for integrated fixed and mobile network providers
Cologne/Eschborn, 16 July 2014. Rapid growth in new services and data traffic, heightened levels of networking and digitalization in all industries and areas of people’s lives, coupled with bitter price wars in a desperate effort to retain subscribers – telecommunications companies operating on saturated markets face harrowing challenges. The new book published by the management consultancy Detecon International entitled “Future Telco” describes the strategies and actions available to industry players. In their articles and interviews, a team of consultants and guest authors from the worlds of business and academics has identified seven levers which can ensure the profitability of carriers: modern network concepts, integrated expansion of network capacities, focused innovation, accelerated partnering activities, extension of wholesale business, differentiated development of markets, and agile processes and IT.
“The key task confronting telecommunications companies is learning how to master the immense growth in traffic. Carriers which understand how to plan, build up, operate, and monetize their networks at a high level of efficiency will survive,” emphasizes Dr. Peter Krüssel, Managing Partner at Detecon. “The actions we describe in this book are aimed at enabling players to position themselves with respect to customers as key directors of digital value creation and to develop from parties driven by digital transformation in business and society into drivers of this transformation.”
One of the core theses of the book’s authors states that only those telecommunications companies with an integrated infrastructure offering full-area coverage for fixed and mobile networks have the essential resources required to master future challenges such as the tremendous growth in services and data. Sooner or later, the limited capacities in mobile networks will force the creation of an increasingly fine mesh in the network infrastructure. Mobile network corporations will have no choice but to enhance their networks by the addition of new, small cells and to connect them to the core network. Carriers which already have a granular fixed network of full-area coverage alongside a matching mobile network infrastructure will clearly be at an advantage in comparison with single-business mobile network companies. In the authors’ opinion, the latter will have only the options of operating as resellers, service providers, or MVNOs (mobile virtual network operator), divesting themselves of their own networks, or of joining forces with a fixed network operator to develop into an integrated carrier.
Integrated fixed and mobile network operators will be unable to avoid making more and more network resources available and steadily improving their production and marketing efficiency. Important elements of such strategies include the accelerated implementation of IP technology, the virtualization of network functions, and software-defined networks, that is to say, the strict application of IT principles to classic telecommunications products. According to the book’s authors, these steps will raise the pace and improve the flexibility of innovation, product development, provision of services, and the integration of external partners. Moreover, these technical and structural measures create the prerequisites for the monetization of the networks, the reduction of dependency on network outfitters, and new space for initiating entrepreneurial activities to counter the so-called over-the-top players (OTT) – those Internet companies which offer services with a high level of data consumption to their customers on the Internet, in many cases free of charge.
All in all, the authors believe that the carriers will be undergoing transformation involving many changes in their processes as well as in their cultures. In the future, the planning and realization of fixed and mobile networks as well as the related marketing will have to be integrated. In view of the heightened demands for investments, the compelling need to utilize fully network capacities, and the scaling effects so important for profitability, cooperation in network operation among large telecom providers will also be advisable in the future. Activities can include the joint use of networks and network elements, comprehensive roaming agreements, or even joint initiatives for the development of new business fields such as cloud services or M2M.
Partnering activities, both horizontal and vertical, will consequently play an increasingly important role. OTT players in particular will no longer be viewed strictly as competitors; brought into the fold of cooperation, they can also function as potential sources of new revenues and possible differentiation factors. Collaboration can extend to revenue sharing models, joint marketing activities (whether with independent branding and sales partnerships or not), and differentiated quality of service in terms of the connectivity promised to end customers. The attractive service-enabling portfolio comprising innovative quality mechanisms, innovations closely related to networks, and fast, open, and flexible communication platforms is an especially good door-opener to potential partners who want to connect to the telecommunications companies’ networks quickly and without a lot of fuss so that they can offer new products.
“Much of the experience Detecon has gained during the conduct of its many consulting projects in the telecommunications industry worldwide is reflected in the book. Along with our guest authors, we have examined today’s challenges from many different angles and put together a comprehensive picture of the need for action and of concepts oriented to daily practice,” explains Dr. Peter Krüssel of Detecon.
The book “Future Telco” can be obtained at:
www.detecon.com/en/futuretelco
About Detecon International GmbH
Detecon is a leading corporate consulting company operating worldwide; for more than 30 years, it has combined classic management consulting with outstanding technological competence. The focus of its activities is on the field of digital transformation. Detecon supports companies from all areas of business as they employ state-of-the-art communication and information technology to adapt their business models and operational processes to the competitive conditions and customer requirements of a digitalized, globalized economy. Detecon’s expertise bundles the knowledge from the successful conclusion of management and ICT consulting projects in more than 160 countries. The company is a subsidiary of T-Systems International, the key account brand of Deutsche Telekom.
