Can Operators Invest in Network Quality to Improve Top Line Performance?
May 13, 2014 Leave a comment
Seemingly for years now, we’ve heard telecom network equipment vendors talk about the need for CSPs to counteract the trend of falling revenue per bit metrics. Like modern day ‘Ghosts of Christmas Future,’ these warnings are accompanied by menacing infographics with scary-sounding names like ‘the scissor chart.’ These charts feature jagged lines depicting an (as yet undefined) point in time where delivering data services becomes a resource-draining burden, rather than a twenty-first century business opportunity.
The problem with these prognostications is that rarely have they been accompanied by concrete plans or solutions which will help operators to solve their problems. Sure, there has been the standard acknowledgment of the ‘network as a differentiator’ and some vague notion of partnering with OTTs, but that is a far cry from putting forth actionable plans that detail how to deal with the chart below.
Thankfully, the market is progressing, and vendors are becoming more engaged in articulating their thoughts related to how operators can increase their top line performance through investment in next-generation network architectures. Bringing this to mind, Ericsson just released a study arguing that operators that undertake a ‘performance-driven’ approach to planning network investments tend to show better top line revenue growth than peers that do not follow a similar path. Similarly, and potentially even more impactful, Huawei has recently started demonstrating a network modeling tool that helps an operator craft network deployment plans based on identified business outcomes rather than just KPI performance.
While seemingly vague, the underlying implication in both of these examples is that quality of experience matters to end users, and by focusing investments on technology that will improve this experience – rather than focusing simply on measures such as raw data throughput that do not account for the experience of an individual user – operators can improve customer satisfaction. In turn, this creates more loyalty among customers, and loyal customers do all kinds of great things like buy more services and recommend those services to their friends.
So, as the Brits sometimes say when describing something self-evident, “Bob’s your uncle.” (And, please, don’t ask me why.)
The problem with our proverbial Uncle Bob is that much of it still skirts around the issue of exactly where operators need to be putting their money and why. Network performance and, especially, network quality can be profoundly impacted by a myriad of potential investments an operator could make. So, this begs the questions: Should operators be spending more money on the RAN? The mobile core? What about OSS… or BSS? Won’t SDN and/or NFV also improve performance? (It had better, right?)
Alas, the answer to all of these questions is “yes.” And, unfortunately, little of what we’ve seen related to concepts such as Ericsson’s ‘Value of Performance’ or Huawei’s ‘Broadband Salami’ – or a myriad of other marketing campaigns by other vendors that my word limit won’t allow me to single out – seems to get at exactly what needs to be done to realize the quality and performance that matters to end users.
So, as we get set to embark upon another round of new technology development that promises to revolutionize the way we communicate (think cloud, virtualization, BDA, OSS/BSS transformation, 5G), it seems as if the challenge remains the same for operators… and by extension, their supplier partners: specifically, how to invest limited resources most effectively to grow their businesses. The good news is that we seem to know that network quality and performance as experienced by individual users are vehicles which can get operators to where they need to go. As ever, though, it’s up to the vendors to fill in the blanks as to what parts need to go where first.