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.
"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 iPads 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."
There are best practices that can help operators manage their business transformations. And it all starts with vision: a clear view of the goal, the ability to be flexible along the way, and of course planning the way forward are all critical.
"To be successful, a lot of transformation needs to happen," said Bass. "It's a question, he says, of pulling and tweaking the transformational levers available to any given carrier: "We're talking about a set of complicated paths, which are different for every single player out there. Everyone's in at different starting point with their legacy systems and legacy operations."
The Value of a Good Lab
Back in 2005, had a vision to transform its central office-based wireline copper-to-the-home business, in order to get into the triple play and take on the cablecos. Thus, the first kernals of the fiber-based, all-IP U-verse offering took root, and the carrier embarked on a journey that today has brought the vision to 2.3 million houses, 75 percent of which have the triple or quad play.
In its latest earnings report, AT&T reported making about $3 billion in wireline IP data (that includes VoIP). To put that in perspective, 32.5 percent of its business is consumer IP data revenue, which represents 37.3 percent of consumer wireline revenue overall.
"What is it about IP?" asks Chris Phelan at AT&T Inc., rhetorically. "We live in a world of fiber and cable and coax, of racking and power — what's different?"
For one, he notes, the configuration is fairly self-contained in TDM, thanks to technologies that have been allowed to mature over the years. IP in a competitive consumer space can't be allowed to bake in a standard configuration for 15-20 years before getting it right.
Liberation from the physical network is another factor.
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