There are many, many factors currently affecting the Telecom Operators’ business model and cost structure, but particularly ‘connectivity’ requires a strategic reassessment. Connectivity has commoditized and faces a never ending increase of traffic, driven by ‘any screen’ data consumption by consumers with mobile as the device of choice.
On the mobile side, this requires more capacity whilst the ‘next next generation’ network technology already arises: 4G has only just become available in most WE countries, yet 5G has already been announced by TeliaSonera & Ericsson for commercial launch in 2018! The time to monetize clearly decreases….
Moreover, the ‘Internet of Things’ (IoT) will generate at least another 10-20 billion connected ‘things’ the coming 5 years, with big impact on networks.Opportunities and threats go hand-in-hand. There is also good news in this: 4G/LTE delivered a much improved end-user experience, lower cost to operators andhigher perceived value of connectivity.
Similar trends can be observed in ‘fixed’ networks, where the Copper-Fiber-Cable battle continues and infrastructure upgrades require enormous investments with long returns. So how to best serve the customer? Is this the time to invest in convergence, based on complementary and/or substituting technologies like WiFi? We see interesting stand-alone deployments (Google’s ‘Project Fi’) and attempts to seamlessly integrate WiFi with mobile network technology.
It is clear that players must decide early which strategic posture to take and which (access) technologies to invest in. The time seems more than right to redefine your connectivity strategy!
Hein Boot, former CTO/Network Director Versatel and Tele2.