Telco's the world over are faced with tough challenges in survival in the face of high competition briniging about customer churn and reducing ARPU. Case in point is the imminent acquisition of T-Mobile by AT&T in the US. The downfall of T-Mobile may be due to the shift of customers from T-Mobile to Verizon due to Verizon being the second operator on iPhone. Think again - how would operators wise up to the dilemma of having (say in AT&T perspective) 130M customers with around a USD 60 blended ARPU vs Facebook having a soaring 500M customers with around USD 20 ARPU.
It is evident that mobile applications/smartphones are shoring up the demand for mobile connectivity. An app in a store typically priced at USD 2/= does not take into consideration the cost per bit accrued to the operator as a result of acquiring and delivering the content from network to the device. The splurge of data and content from apps and the evolution of the appstore model has necessitated the operator to scale the network in capacity in exponential proportions. This has also brought about the shift of the pricing models of Telco's from the 'All-you-can-eat' model to the Tiered pricing structure as evidenced recently.
What are the pointers for Telco's in the context of this trend of increased data usage.
(1) Cost per Bit - Telco's have to be conscious of the overall cost structure in serving the customers from customer acquisition -> service delivery -> operation and maintenance. Leaner processes supplanted with increased/rational automation of these processes should help in the long run, and moreover transcending to managed service offerings should also contribute to keeping the bottom line low for the Telco.
(2) Business Model agility - Telco's should move into creating business models and relationships in a dynamic manner and more importantly the internal business processes should support this robustness. This is most important as Telco's would need to have business relationship with their stakeholders such as customers, suppliers in order to form B2B or B2B2C business relationships.
(3) Service Delivery - Telco's should invest on Service Delivery Platforms, that facilitate rapid service creation from orchestration, work flow, to service on-boarding, deployment and service billing. Also central to this will be the ability for third party app development and integration of Telco capabilities such as Content (Voice/Data/Video), Signalling, Network/Information Management, Provisioning and Billing. Hooks to social networking sites such as Facebook and Twitter etc. would also be a nice to have.
(4) Cloud and Content Strategy - With cloud opportunity set to explode Telco's should evolve and adopt a cloud strategy looking at all dynamics such as the overall market, sevices, network, devices. The Content streategy should be tightly ingrained and manifest from the evolution of the cloud.
(5) The Network - The all IP network from the data centre -> core -> distribution/aggregation -> access should be based on guiding principles (i) Delivering customer expectation on defined QoE on services (ii) Support the roll out of wired or wireless access (iii) Should support end user device ubiquity
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