Competition Will Drive Big Back Office Changes

The telecom market can feel like a roller coaster, with the spread of broadband mobility, cloud services and 100 percent market penetration making for unprecedented innovation — and competition. 2010 promises a raft of market changes that will only serve to complicate the landscape further.

B/OSS talked to Kieran Moynihan, vice president and CTO Telecoms for IBM Tivoli, about telecom’s incredible dynamism, intensifying competition, and the importance of customer service.

B/OSS: What strikes you the most about what’s happening in the telecom market right now?

Kieran Moynihan: The telecom market changes every day, there is so much dynamism. When we sit down with CTOs at carriers, the first, biggest challenge or concern is that the level of competition has intensified to an unprecedented level — across wireless, fixed broadband, fiber, cable, IPTV and all the new services like VoIP and video over IP, particularly in the more mature markets like South Korea, Singapore, Australia, the U.S. and Europe. That’s really driving significant challenges within their own businesses. In many areas, such as wireless, there are literally no new customers. You have to hang on to the customers you have, and increase revenue with new services — against a backdrop of commoditizing basic wireless 3G access, DSL and things like that.

B/OSS: Have you seen cable to be a threat to incumbents outside the U.S.?

KM: In many markets the entrance of the cable companies as fully-fledged telecom service providers has been bigger than they thought. That’s been out of the box quickest in the U.S., but in a lot of European markets and sophisticated Asian markets, cablecos are starting to cause the same problems, both in broadband access and VoIP.

If you were to look at the United Kingdom, you have service providers like British Telecom, who obviously had an advanced next-gen network, then Virgin Media overnight completely disrupted the market with the fastest offering available there.

B/OSS: How does the rise of content affect the landscape?

KM: The whole area of television and video-on-demand content is playing to the strengths of existing cable and satellite companies. By extension, there is a lot of focus around control of the home. People want to establish a gateway into the home to offer a lot of services and for it to be the focal point of the smart home of the future. When your fridge and smart energy appliances all want to connect, they’ll utilize a gateway/hub, and that will drive the smart home of the future. It will make for some interesting battlegrounds.