To Telco, or Not to Telco? That is the question…
The move from closed, custom, hardware-based networks to open, cloud native, software-based networks bring with it the opportunity for disaggregation. It provides an increasing ability to innovate new dynamic and flexible services, rather than the typical static and fixed telco services of today.
At least, that’s the theory.
In practice, telcos remain tied to vertically integrated applications that are no longer their core competence, and where they have a growing dis-advantage against globally available applications, such as Zoom and Microsoft Teams. Many chase the dream of the next killer application, but the stark fact is that telcos on the whole have not really approached innovation in the way that cloud providers have.
Pressure (if not head-on challenge) from hyperscalers, the need to find new sources of revenue, and the swirl of technical possibilities around 5G in particular, pose an existential question for today’s service providers: to telco, or not to telco?
Our latest in-depth research paper, Telco-as-a-Platform, offers a fresh analysis of the commercial opportunities and specific new business models made possible by disaggregation of telecom. We address the question of how telcos can create value and growth from having a disaggregated network (rather than simply aiming to reduce costs).
“The (Platform) Play’s the Thing!”
Telco-as-a-Platform is only partially enabled by new technologies, cloud and open APIs. Success also depends on a shift in commercial and operational principles, including rethinking what partnership means, and a greater appetite for experimentation.
In our new analysis, we set out the new business principles required for Telco-as-a-Platform to become a value-creating strategy. Beyond that, the key technical foundations of a practical Telco-as-a-Platform.
We identify five new types of telco business that will result from embracing Telecom as a Platform: The Utility Telco, the Network Sharer, the Neutral Host, the Innovation Telco and the Hyperscale Platform. Each one has its own surrounding business model with each potentially supporting other platforms – they are not mutually exclusive.
This isn’t just a thought experiment.
A number of companies (not all of them telcos) are already executing against the new potential of Telco-as-a-Platform and heading towards one or more of the operational models we call out in the report. The fact that these run from BT to Rakuten proves that TaaP thinking can offer a way forward for a range of operators, not just greenfield pioneers.
For more information on the new Telco-as-a-Platform report, including a free download of the executive summary, see here.
Companies mentioned in the report include Amdocs, AWS, BT, EE, Lumen, Microsoft Azure, Openreach, Rakuten and Vodafone, as well as recent work from the Small Cells Forum.