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Telecoms re-invention-death of the traditional telco July 2010 T he communications provider landscape is evolving as the demand for data -in fixed locations and on the move-outstrips the still growing demand for voice communications. New entrants from the worlds of IT, media and the internet are competing-directly and indirectly-with established telecommunications providers. At the same time, new technology innovations and integr ation are turning once-profitable services into low margin commodities. Telecoms companies need to adapt and rapidly to these new threats to ensure they can survive, and hopefully thrive, on some of the ne w opportunities that emerge.
Rob Bamforth Clive Longbottom Quocirca Ltd Quocirca Ltd Tel : +44 7802 175796 Tel: +44 118 9483360 Email: Email: rob.bamforth@quocirca.com clive.longbottom@quocirca.com
An independent report by Quocirca Ltd. www.quocirca.com Commissioned by ATG ©Quocirca 2010 Telecoms re-invention-death of the traditional telco July 2010 1. The need for change now 2. How should telcos adapt? As their industry evolves, telecoms companies (telcos) The tightly bound 'star' relationship of subscribers to can no longer rely on simply providing voice telephony network carrier is no longer the only game in town. and data access across their network resources. Individuals may have multiple devices and with Increasing service variety and complexity, combined different carriers-for personal or business use, or with challenges from internet and consumer brands, just different form factors-there will often be threaten the relationship telcos have enjoyed with multiple operators in a household or business. their subscribers. Positive action is needed, and soon. More importantly, services will be offered by Sales and support processes have shifted towards companies other than the telco itself and, in many online, mobile and social interaction, so telcos risk cases, these will be big brands. These include internet losing their influence and control, becoming simply bit giants such as Google, cool device companies such as pipes. They must learn how to adapt and harness the Apple and BlackBerry, media brands or smaller positive aspects of the changes that are taking place companies offering innovative ideas. All, whether around them and the challenges they now face: deliberately or accidentally, undermine the close and - Commercial squeeze: market saturation, cosy relationship between carrier and subscriber. relentless competition and regulatory changes are undermining margins, while investment costs in capacity and technology rise. - Endpoint complexity: new devices, smartphones, desktop video and unified communications "telcos should now strive to software all add new services capabilities, but add value by becoming the increase complexity and support costs. - Service choices: more options mean offerings can trusted conduit in a be differentiated and customers targeted, but too connected marketplace" much choice can be baffling. Bundling simplifies options, but brings further challenges. - Applications: open platforms-in the network and at the edge-introduce new applications and This relationship is based on the ownership of the third party relationships, extending customer billing connection with the subscriber, supported by choice, but adding complexity for the telco-who historical data that provides an understanding of their now dominates the customer relationship? profile and, ultimately, their needs. This is where - Data growth explosion: data has moved from telcos should now strive to add value, by becoming 'killer app' to network killer as flat rate pricing the trusted conduit in a connected marketplace and and data-hungry devices and users cause providing the smart pipe linking and supporting overload and service issues. Telcos need to service suppliers to subscribers. manage data impact and support issues. - Service differentiation: even in all-IP networks, not all packets are equal. Telcos have to 3. Customer driven mentality discriminate and prioritise between certain differen... [download for more]
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