Carriers of all stripes are readying for ongoing business transformation; it's a transformation toward IP, mobility and ever more broadband, which in turn drive new billing and operational models. Innovation is ongoing, but leveraging it appropriately is somewhat of anyone's guess at this point.
Changing Business Models
"Operators are facing a very difficult era for the business model," said Mark Bass, senior director of Bell Labs business modeling at Alcatel-Lucent. "Broadband is fairly affordable. There are more and more smart devices, and not just iPhones and iPad s etc. Users like this fact and want more and more and more, and want to use data –causing a proliferaton of new apps."
The result is two-fold: for one, there is a clear pressure on voice from VoIP clients nad other Internet services. The huge revenue from voice that carriers could count on is fading. Gone are the days of 11 p.m. being the peak usage period.
But meanwhile, the data traffic that is replacing voice volume is outstripping any revenue that is being generated from it. Take, for instance, the personalized TV lineups that. They are often part of a flat-rate package, but the bandwidth they require is "huge and requires infrastructure investment," Bass noted. "And creative people are finding ways to provide more and more such things." Things that so far, operators have been unable to monetize.
On the business side there is a growing emphasis on cloud services, to provide back up functionality, redundancy for client sites and virtual working opportunities. Business software upgrades roll out every couple of weeks, so the cloud also appeals to enterprises that want consistent access to the latest and greatest functionality available.
"There are big benefits in going to the cloud," said Bass. "But this too drives traffic growth."
But with great challenges come great opportunities. Carriers, in short, need to find an equilibrium point where they can ensure no chaos on an ever more critical infrastructure — that means being able to grow and scale, with optimized performance to avoid crashing, congestion, spam, viruses and disgruntled users. They also need to leverage apps and content within a new and emerging value chain, and find a way to bring all that together.