By Judi Gill, director of market analysis and strategy at Clarity
With EE's 4G service now available in the UK and a raft of new 4G-ready devices coming onto the market, it has never been easier or faster for us to communicate while on the go. Network speeds and mobile devices have advanced so much in recent years that it is now possible to find any information we need immediately.
With the race now on to compete with EE's first-to-market 4G service, mobile network operators in the UK are investing heavily in their network infrastructure to ensure that they can support the demands of their customers, whose usage habits are changing yet again thanks to the superior bandwidth and speeds made possible by 4G LTE services.
Although the future looks promising for the UK's mobile users as superfast networks dramatically improve the experience of using the mobile web, a question still looms over the heads of the telecommunications industry. Mobile network operators must discover how to turn a profit from their investment in network infrastructure and our ever-growing thirst for the mobile web and bandwidth-hungry applications, such as video streaming and video calls.
Balancing needsWhile their services may be more in demand than ever before, the reality for many service providers is that increased demand doesn't necessarily equate to increased profits. Operators must decide how to balance the need to maximise customer satisfaction with overall profitability and return on investment to the business and ultimately shareholders.
It is well established that much of the premium revenue for data services is being diverted to third party, so called Over the Top (OTT) players, while operators bear the burden of the investment required to carry the data between the third party and the ultimate consumer.
Even as they upgrade their networks, service providers are facilitating the deterioration of steady revenue streams like voice and SMS. Where only recently the service quality on alternative voice and instant messaging services was inferior and often unreliable, it has improved dramatically with higher bandwidth networks.
This erosion is unlikely to abate, and so operators need to find new ways to generate revenue streams, by assessing their core value in the supply chain and the value-add business skills that they can bring to the market. A critical factor for success will be the agility in which an operator can respond to market demands.
Speed and agilityThe wider operational landscape is changing quickly and new offerings and features must get monetised as quickly and as efficiently as possible. No longer can they take months or years to rollout new products. OTT players deploy products much faster, even deploying products, such as new device operating systems, to the market that may have performance or other issues, and then quickly responding to market complaints to rectify problems.
This does not mean that operators should throw out their rigorous and robust processes for network and systems deployments. Customers definitely place a very high value on service stability. But service providers must find ways to be more responsive to the market, by ensuring they implement systems and processes to more closely integrate network, IT and commercial environments so that the whole enterprise can react in truly dynamic ways.
There is also the opportunity for these providers to exploit parts of their business that are not traditionally viewed as revenue centres but provide value add processes and data that can be used to create a superior market advantage. In particular, areas such as network management and operational support systems (OSS), are areas for investigation. The network is an extremely valuable source of data about the real time operations of a service provider's business.
By utilising the performance, capacity and service quality information and combining this with other inputs from business support systems (BSS), service delivery platforms, and mediation and probe systems, to monitor and measure core business KPIs, mobile operators can have real time dashboards that drill down into the nerve centre of their business to manage a 'balanced scorecard' of operational performance.
Paying a premiumOperators can also tap into their existing enterprise offerings, such as value added assurance products like usage and analysis reports or guaranteed service levels. Customers whose business depends on their network reliability will willingly pay a premium for such things.
Offering their robust and proven assurance capabilities externally, either to other operators or to the plethora of companies that are beginning to appear in the extended communications supply chain for Cloud and M2M services, is a natural progression of such offerings and one that has the potential to be hugely lucrative for service providers.
Sophisticated applications will demand a premium price, and end users will expect a corresponding service performance and availability. Extending the carrier grade processes of the network provider to the wider supply chain, by monitoring third party networks, IT infrastructure and applications, makes a lot of sense as offerings evolve and mature, particularly for business and public services.
If service providers are to avoid a 'dumb pipe' fate in the future, where content providers benefit most from the data traffic flying across their networks, they must become leaner and more agile than ever before by incorporating the highest levels of automation and proactive management of their business. The operator's ability to enter this value chain as a trusted supplier, and to use existing customer relationships and service quality assurance capabilities, is an incredibly valuable asset to have, and one that savvy service providers are now looking to monetise.
By focusing carefully on investment and operational processes, these companies can make sure that they are ready to add value and profit from the next generation of services and products to come on to the market.
Clarity provides integrated solutions for process automation and management, including operational support systems and network performance management.