Two new reports look at trends in how communications service providers are monetizing and structuring their networks, and conclude that major change is underway in both network technology and in the ways carriers meet customer service demands.
Maravedia-Rethink said a shake-up is looming in the radio access network industry as companies turn to software and virtualization, and network hardware is commoditized. Small cells and distributed RANs are also “squeezing revenues from traditional base stations,” according to the firm. New networks offer the possibility of reducing the cost of data delivery by 75% when compared to traditional designs, according to its research.
“For the first time in a decade, there is a real prospect of a shake-up in the RAN vendor landscape, and the winners will be those who innovate not just in network topology but in software,” said Caroline Gabriel, author of a new report on how carriers will monetize increased data usage.
The report predicts that macrocell shipments will peak in 2016 at nearly 1.6 million units and then decline by 2018, and that while major vendors Ericsson and Huawei are still dominant, smaller suppliers and competitors like Cisco will be competing in the metrocell and software markets.
Accenture conducted a survey to understand evolutionary trends in CSP networks, relying on information from 30 telecom and media companies in 22 countries, and found that they are adopting new technologies and business models in order to meet customers’ expectations of quality of service on data-driven networks.
“This survey paints a picture of a telecom industry in transition, buffeted by a storm which is both economic and technological in nature, with an impact across the entire value chain,” said Paolo Sidoti, global managing director of Accenture’s network business services group. He cited the global economy and reduced consumer spending on telecom as a driver for the decline in traditional voice and text-based revenues, with over-the-top services also putting pressure on carrier revenue.
“Although some CSPs totally embrace the new realities, others are taking much more of a ‘pick and choose’ approach to dealing with the challenges swirling around them,” Sidoti added.
80% of CSPs surveyed had turned to managed services to ensure quality or savings, and CSPs in emerging markets were likely to deploy network sharing for their mobile broadband networks.
All wireless CSPs said that quality of service was their biggest challenge. 93% of executives surveyed said that they needed new or improved tools to plan, design, and track traffic on broadband or cable networks. Meanwhile, 75% of wireless operators and integrated service providers planned to deploy LTE in the next three to five years in order to increase data capacity and speed.
“Clearly, traditional operating models cannot completely meet current CSP requirements,” said Sidoti. “Instead, CSPs need a more industrialized and collaborative approach, with the right strategy, execution support, and transformation initiatives that can enable them to adopt new operating models, becoming leaner organizations that use shared services that leverage network analytics.”
