Tag Archives: Telecommunication

Mar 29 2016
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Telecoms Future

Telcos and the big data-driven opportunity

The big data opportunity for telcos is not a new phenomenon. Vast amounts of data have been generated both internally and externally over generations of fixed and mobile services for consumer, business and partners alike. Over The Top (OTT) players have come into the market and built business models on the amalgamated analysis of data being generated at the customer end from their search, social media and apps store-based activities.

Telcos have missed an opportunity: they had some of the pieces of data in place to address some of these issues, but perhaps neither the telcos nor the market were ready for it. The emphasis for telcos was on internal measures and network-centric KPIs. The focus now has to switch to look at all their data generation points. They need to build a unified view of all activity to improve both the performance of the network as it comes under more and more pressure. But, most importantly, they need to underpin the new business models emerging which include OTT-based services as well as telco-centric ones. This is an inversing of the telco approach: Putting the customer and partners first, and using that insight to help shape the network to ensure all information flows satisfy all parties. That is not to say that the network is not critical. It is, but the emphasis should be on what the network is enabling rather than on the technology of the network itself.

Telcos must step back; gather network-centric, service-centric and customer-centric data into a suitable architecture. This will allow for the interrogation, validation, and extraction of value from the data for all stakeholders. ICT assets exist outside of the telcos themselves to allow this to happen, leveraging both the compute and storage capabilities of the cloud, as well as the algorithms and the data scientists who can work their magic with structured and unstructured data.

Data sources will include the core and edge of the network, the disparate customer, applications and content being consumed as well as the proliferation of social media and comment flowing around the use of broadband, applications and content in both personal and business lives.

The advent of the Internet of Things (IoT) adds another layer of complexity to the data puzzle, but it also allows the telcos to bring their sovereign national assets to bear in building the support mechanisms essential to help drive digital business transformation.

The need has also shifted from a retrospective requirement looking at old data records to a real-time need for insight into customers’ behaviour and the opportunity to adapt service offerings to suit every occasion. In this way, the leveraging of data becomes an essential component of the telco’s contribution to the ecosystem. Sharing some of the data with partners will doubtless become part of emerging offerings. As connectivity approaches ubiquity, it is the insight and knowledge of what is being done by people, households, businesses and ‘Things’ that becomes the fuel feeding the economic engine. As noted above, telcos missed the initial opportunity around data analytics. Let’s encourage all parties to work together to make sure that they don’t miss this next even more exciting wave.

Talend asked Lewis Insight to take a look at the telco and the data opportunity. The resultant independent paper can be found here.

The telco big data opportunity is one of the debate topics we will introduce to the Great Telco Debate in London on November 15th 2016. To find out more, see last year’s highlights and register visit www.telcodebate.com

 

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Jul 14 2015
1 Comment
Telecoms Future

Are telcos losing pole position as digital disruption impacts demand and supply?

A client recently asked me to present on the top 5 disruption themes in the industry. A pretty broad brief given that I have covered almost every aspect of the industry over the years of being an analyst. So, I had to find a framework within which to identify the disruptions. The following evolved:

  1. Demand is taking over from supply in shaping the telecoms market so the start point has to be the demand side.
  • The individual: how do individuals see the telecoms piece of their digital lives?
  • Households: is the household a market and if so, who is the domestic CIO?
  • Business: what is driving business’ use of telecoms services?
  • Society/government: how is telecoms fitting in with the increasingly joined up whole public sector play?
  • IOT: Cuts across all the segments above, throwing a whole new light on the demand side with its mix of personal, household and business/industry connections. How will this fit and who will provide these business process services?
  1. Supply has to face this massive shift in demand with several constraints:
  • Firstly the flat if not shrinking market for telecoms services in terms of revenue. This is especially acute in the highly regulated European markets but it is increasingly true around the world.
  • Secondly, the revenue position belies a massive uplift in volumes and complexity of traffic. The more granular networks have to cope with video but also with complex series of loops including our personal, business and society links that may be private, open to public scrutiny or part of a 3rd party business process such as in the healthcare sector.
  • It is not that the role of connectivity is lessened, but that it is being absorbed into much broader business activities. The clear end-to-end nature of the early telephony systems has been replaced by either ‘end’ being variable, virtual, and dynamic and often via cloud-based 3rd party application. The connectivity provider may get the blame for poor performance of an application despite there being many steps in the process beyond their control.
  • The disruption on the supply side in terms of investing in the long term suitability of the networks to cope with this new age demand means that NFV , SDN , small cells, WiFi, shorter application development cycles and a generally more agile approach to business all add up to a short term need to increase budgets to get over the investment hump of removing siloed, legacy networks and services in favour of simpler more adaptable fixed and mobile services.

Given the pressures on the connectivity front, telcos are, of course, tempted to shift up the value chain towards the applications that really make different industries tick. And, the IOT also represents new territory to ‘conquer’. Neither, in my opinion, are that easy to achieve. The business applications players are already well versed in the industry-specific apps and that also translates for the major integrators when it comes to IOT in specific industries.

The answer is to adopt a much more open stance towards partnering with other specialist players and accept a supporting role. As ever, the caveat is that every country market is different. Some telcos will continue with prime contracting with a strong business, retail and/or media presence, but all players should seriously consider a multi-channel approach to the customer and let the customer choose.

And, by the way, there is little sympathy for the telco from outside. It is often perceived as having taken high profits over many years and neglecting to invest for the long term of the industry. Outsiders see the telcos as fair game when it comes to exploiting them in the digital marketplace. Customers, of course, see the benefits of their app-based worlds across their different devices as either part of their hierarchy of needs or just their basic human right.

Policy has to ultimately rebalance this demand and supply issue. If telcos are not incented properly to build future-proof networks then the politicians won’t be able to use broadband and digital inclusion as just another thing to throw around during election times.

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Aug 19 2013
3 Comments
Telecoms Future

Plotting the telecoms future

We are entering a major annual planning cycle for many players in the ICT industry. The challenge for the telecoms sector is that there are so many moving parts, some positive, some negative and all interacting with each other. And with the increasing digitisation of everything, factors from outside the telecoms market will seriously impact the future shape of telecoms. Indeed, one thought for the backburner is whether we will even think of telecoms services as a market in the future – but that’s for another day!

The basic equation for the telecoms market looks something like:

  • Demand from individuals, households and businesses and now ,‘Things’ (M2M) continues to grow as communications expands its horizons both in numerical and volume terms.
  • Total Revenues from traditional and new connectivity services are either in decline or about to go into decline – it is still a very big number overall, something like $1.4 trillion worldwide. The mix of legacy and new revenues varies by country but few doubt the gap left once the legacy services have washed through the system
  • New revenue streams such as TV/media, IT services, security, cloud, M2m all have attractive connectivity dependent components but they are also being addressed by other parts of the ICT industry and generally have lower margins than the connectivity services
  • Applications and content leveraging the telecoms networks are increasingly disconnected from the telecoms world and increasingly linked to the apps and links on our multiple screens through which we consume and execute
  • Maintaining a network infrastructure that can handle the explosion in traffic across all access methods and across the core, including in and out of data centres, needs major investment along with a rationalisation of the internal ICT infrastructure for most operators if margins are to be maintained, let alone grown

We need to recalibrate the expectations of the industry and its investors. Perhaps considering how many connections per household, individual, business and ‘thing’ require  and a fixed rate of revenue for each. This would define the worst case scenario, but still potentially very profitable. Add to this a percentage of the adjacent markets from ICT and Media and two-sided business models from pretty much every industry sector, and we have the potential future addressable market. However, remember that this new digital world means that the adjacent market incumbents can equally enter the telecoms space!.

There is fundamentally a lot of ‘spend’ at stake from all on the demand side. As everything digitises the demand side is increasingly likely to dictate through which channel the service (including connectivity) is consumed. So, a multi-channel strategy is needed along with major network and ICT rationalisation to bring the telco of the future into the new digital era.

Don’t get me wrong, Telecoms does have an underpinning role in the future scenario.  It may not necessarily be as the deliverer of the final service function or feature but there is a fundamental role at the heart of the new digital era for a trusted, reliable provider of the digital glue.

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Jul 15 2013
1 Comment
Starting up

A blank canvas or a really complicated puzzle to unravel?

After almost 30 years of working for the telecoms & networking research community in the shape of many of the leading research and advisory houses I am now venturing out on my own. Although, is anyone truly on their own any more  if you consider the network of people from both the vendor side and the analyst community hovering in cyber space and on every social platform as well as the pseudo old school reunions at the main vendor events?  Many thanks to all of my colleagues across the industry for their kind words and positive reaction to this new venture for me. Doubtless we will have many interactions, debates, disagreements as we all try to navigate through this fascinating next phase of the telecoms industry’s development.

Having covered all aspects of the telecoms and many related industries during my various tenures, the challenge is now not around what I have covered but where to focus the effort. This is certainly the issue for the research industry and indeed the telecoms industry itself. The tendency is to want to look to the new sexy stuff – mobility, cloud, security & M2M/Big Data. However, the health and prosperity of the telecoms industry needs to be built upon a recalibrated basis of high quality pervasive connectivity.  Removing the legacy networks and services from the marketplace needs to be surpassed by a new flexibility in both network build and service roll out, as well as a radical improvement in the customer interaction at all levels. That good old trusted telco brand has been tarnished by poor customer service and a lack of appropriate partnering with fellow hopefuls from the broader ICT and media communities.

No doubt the whole supply, value chain (and dare I say it, the Eco system) is shifting to reflect the new reality for telecoms:

  • Sourcing the right mix of services and technology to build the new telco platform is resetting the relationship between the telco community and its suppliers of network equipment, software and indeed underlying IT infrastructure
  • Organising the telco into an appropriate structure for the delivery of competitive services across telecoms and adjacent markets such as IT services and media
  • Aligning the services portfolio offered to address the convergence of connectivity, processing, storage and applications/content needed for today’s customers
  • Understanding the role that telco plays in the emerging consumption model of today’s and tomorrow’s consumers of individual, household and business services to support new life styles
  • Embracing the ‘Omni channel’ approach to retailing services to customers.

As an analyst industry, we need to continue to build market models to provide the basis of decision making and we need to maintain our view of emerging technologies and services. Perhaps most importantly, we need to interpret the interplay between:

  • the technology and services on the networking side
  • the overlap with adjacent IT and media industries
  • and, most importantly,  the different vertical markets through which much of the technology is delivered.

How can I help? By drawing on my long experience of interaction with all players in the ICT spectrum both to help people outside of telecoms to understand the telco angle and simultaneously to help the telco community strengthen its position in the emerging digital landscape. I will, of course, leverage the social platforms but prefer, perhaps because of my lack of eye sight, my particular strength in interaction on a personal level (don’t write off voice!) with industry executives, workshops of strategy developers, sales teams and product development people to build a brighter and more prosperous future for the industry.

In summary, my aim is to leverage my network of contacts in the industry and work with many of my former colleagues across the globe to build the right mix of skills to address clients’ needs at whichever link of the emerging value chain.

Let the conversations begin!  +44 7824 360747  chris@lewisinsight.com @chr1slew1s 

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