 | Issue: | Europe II 2016 |
| Article no.: | 3 | |
| Topic: | The network of the future: Realising new revenues through service management | |
| Author: | Patrick Buttimer | |
| Title: | CEO | |
| Organisation: | Eirteic Consulting Ltd. | |
| PDF size: | 191KB |
About author
Patrick is founder and CEO at Eirteic, established in 2000.
He began his career as a programmer in the Irish Naval Service before joining Telecom Italia as a software specialist. It was there that he developed a passion for Telecommunications and OSS, and joined Micromuse as Technical Lead, working in many large Service Providers around the World.
Article abstract
The reality is, voice and data revenues continue to be eroded and, now, with the growing dominance of internet players like Netflix and Amazon’s Prime service; and IP messaging services like, Whatsapp, telcos are struggling to see where their revenues will come from five years from now. So how can network operators transform their revenue prospects and what role does the network itself have to play in this transformation?
Full Article
Introduction
Over the last decade network operators have transformed themselves. Many operators look more like entertainment companies than traditional telcos; multi-play specialists offering a range of traditional fixed, mobile and IP-based services of increasing complexity. Pure-play networks, too (e.g. Three in the UK), have invested heavily in network optimisation, building in scale, improving performance, customer service, speed and reliability to keep them in contention. The investment has been huge. But has it worked?
The reality is, voice and data revenues continue to be eroded and, now, with the growing dominance of internet players like Netflix and Amazon’s Prime service; and IP messaging services like, Whatsapp, telcos are struggling to see where their revenues will come from five years from now. So how can network operators transform their revenue prospects and what role does the network itself have to play in this transformation?
In this new era of connectivity, ‘smart’ towns and cities, and the services that they offer, might hold the key. As we start to connect everyday urban services, one thing holds us back – a single framework to connect smart services together, or the public funds (or desire) to build one. Does the operator, therefore, hold the secret to making Smart Cities a reality, and could this be the new revenue stream telcos have been looking for?
Improving performance and streamlining service management
The reinvention of the telco continues, particularly in Europe where there is such diversity in offering, standards and customer demand. For telcos where service proliferation has been the priority, the struggle has been to unify disparate services and launch new ones quickly. The more services you offer, however, the greater the potential strain on the network.
For ‘pipe’ businesses whose focus is solely to provide the very best coverage and performance, coupled with excellent customer service, their challenge has been less to unify disparate services and more to build networks that can perform best in the most data-demanding scenarios. LTE and 5G being good examples. According to recent Ericsson figures, worldwide mobile subscriptions have finally surpassed the global population for the first time. Total number of subscriptions hit 7.3 billion worldwide – 100% mobile penetration is finally here – and with it, growing network demand.
What telcos have realised is that, in order to compete against the wave of online services, they have to put their customers at the heart of the business and that means improving performance and streamlining service management. Telcos like MBNL, Tele2 and eir Telecom, in order to compete with larger rivals, and to keep customers engaged, have worked hard to unify disparate systems and improve service management. And it’s paying dividends.
For some, like eir, unifying multiple systems under one management policy has reduced headcount by 20 percent, allowed them to provide 24/7 coverage and support, and has given them a host of green tax breaks. For others, like Tele2, by replacing several different solutions with AssureNow, the service assurance platform, they have reduced operating expenses, accelerated new service deployment and created a more customer-centric service management infrastructure to keep customers loyal.
Now operators have done the hard work to unify and streamline their service management methodologies, is there an argument for operators to invite other industries to access this infrastructure, and could this open a new market for telcos? One of the opportunities for telcos is smart cities.
The smart city opportunity
According to Gartner, smart cities will use US$1.1 billion connected “things” in 2015, rising to 9.7 billion by 2020. Meanwhile, IDC projects that spending on connected devices and the services to support them will reach US$1.7 trillion by the year 2020.
The world at large is becoming connected. In every town and every city, local services are starting to become connected to service providers. Whether that’s a local city council managing a fleet of refuse collection trucks, security companies managing thousands of CCTV cameras, or the local Transport Police, monitoring the nation’s road network.
Arguably, however, we’re no closer to achieving the vision of a truly connected, truly ‘smart’ city. There are some famous examples of cities where amazing work is being done; Barcelona is an obvious example. There, energy consumption is a focus and residents have seen the city’s buildings connected to a monitoring system capable of detecting excess use and allowing for rapid adjustment – resulting in energy consumption reduction.
Kansas City, too, has been given the go-ahead for a US$15 million ‘smart city’ project that will will include deployment of a public WiFi network and “community kiosks” that will allow citizens to call upon city services or make digital transactions.The ambitious plan also includes installation of video sensors and smart lighting, that will be integrated with street lighting – used to capture data as needed for any future smart city application.
But the US$15 million relies on industry funding. And in the case of Barcelona, that’s just one connected service amongst many and they’re not yet all unified. These examples are in the minority (and big budgets aren’t always available). In most cases, each service operates in isolation, operating on disparate platforms; not linked to one another and, therefore, not fulfilling their potential. For local authorities and service providers, unifying a host of disparate services – and the thousands of connected devices within them – is a massive, and costly prospect.
The operator holds the key
What’s clear is there are two major factors at play in connecting smart cities – and making them operate effectively. Of paramount importance is the network – the infrastructure that will connect every component – the smart grids that will automate and monitor services. Secondly, the data that is created and how this is gathered, analysed and put to good use to improve existing and build new services.
Does it, therefore, make sense to hand off the responsibility for managing, maintaining and securing the network to the operators who have already done the groundwork? The operators already have something the service providers don’t have, and want – the network. Telcos are also now much more sophisticated; unifying legacy systems to create a single view of their entire estates – VoIP, mobile, FTTH, IPTV.
Everyone, from companies like MBNL with 56 million users, right down to providers like Manx Telecom, Isle of Man with 80,000 users, are cleverly using technology to unify disparate systems, better monitor all their services from a single point and, therefore, improve their services to their customers.
For service providers like local government, this should be a boon – a way to extend connectivity to a wave of new municipal services and, therefore, a way to accelerate the launch of new revenue generating services. Crucially, though, it’s a way for services to come together to inform one another; work together to solve wider problems and simplify common tasks – and a way for one team (rather than many) to manage a complex service estate.
For operators, they become the lynchpin; providing the connectivity and the service unification that service providers need to be able to make ‘smart’ concepts a reality, at a fraction of the cost of doing it themselves. In this world a city council works with its local communications providers to plan the future together – building in the correct network characteristics to pull an array of services together on one platform.
In the connected world of the future, this could be the way that network operators make themselves indispensable and broaden their service offering.
