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MWC: Do More With Less, Says Deutsche Telekom CEO

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Jeff BarakBy Jeff Barak

The main challenge facing service providers is to do more with less, according to Deutsche Telekom CEO René Obermann, speaking at Mobile World Congress 2013 in Barcelona. There’s more demand for bandwidth, capacity and coverage, but less revenue due to heavy regulation and competitive pressure.

And then of course there’s what Obermann called the OTT paradigm: You (service providers) invest; we (OTT players) take the profit. This model is clearly unsustainable, he said, but the Deutsche Telekom executive added that service providers had to accept as a fact of life that the OTT players were going to continue taking voice and SMS revenue.

So how should service providers react? Firstly, “we have to be more efficient, customers won’t overpay," and secondly operators need to “do more innovation with more partners."

In other words, service providers need to get smarter.

This involves three main pillars: smart networks; innovative services and an innovative culture. In terms of a new network model, Obermann talked of the need for integrated, efficient networks that were also customized to provide quality of service. He was quick to insist that he wasn’t against the principle of net neutrality, “but some services will demand quality of service."

For innovative services, service providers have two different routes to follow. On the one hand, they should become enablers, opening APIs to third parties. This will enable services such as dynamic QoS, authentication and authorization, carrier billing and messaging. On the other hand, operators also need to differentiate themselves with smart connectivity, providing their subscribers with carrier-grade communication, end-to-end security, interactive TV, seamless streaming, software and content distribution and mobile payments.

Noting the reputation carriers had for being slow-moving bureaucracies, Obermann insisted that the smart service provider needed to instill an open culture, cooperating with small and big players, coopeting (cooperating and competing) with OTT players, while utilizing open innovation and bundling connectivity and services.

But the ball is not just in the service providers’ court: Obermann called for “less investment-killing regulation" so that carriers had the incentive to build out the next generation networks that will make the future happen.

Jeff Barak is the corporate editor at Amdocs and is blogging from Mobile World Congress for Amdocs Voices .

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