Telecommunications operators are suffering significant revenue decline in core services as they face increased competition from both existing telco and new over-the-top (OTT) players. Cost-cutting measures are not enough to halt the decline, yet attempts to launch new services often meet with mixed results at best. A recently released research report claims the only way to grow new revenues is to transform the traditional telco business model into a “telco cloud” model that leverages next-generation technologies and a cloud mindset.
Supported by Hewlett Packard Enterprise, the report conducted by British research firm STL Partners examines why revenues are declining and the structural barriers to launching new digital services. The 45-page report explains how operators can overcome both by adopting a telco cloud business model that 1) adopts next-generation infrastructure technology; and 2) embraces cloud-type business practices. The report details specific network-integrated cloud services enabled by a Telco Cloud model.
To combat revenue decline, operators currently are scrambling to cut costs and find new sources of revenue, particularly new digital services. But operators face deeply entrenched internal barriers to transformation because of traditional telco culture, legacy systems and ways of working, and organizational structures and processes. The report explains how next-gen technologies can help operators become more efficient, flexible, and innovative, and it explains why “cloud practices” are necessary to overcome internal barriers to launching new services.
The first key element of the Telco Cloud model relies on adopting next-generation technologies such as network functions virtualization (NFV), software-defined networking (SDN), OSS/BSS virtualization, and cloud computing. The technologies hold significant promise for helping operators to run and manage their operations more cost-effectively. Just as importantly, they can help facilitate the transition toward a Telco Cloud model by easing structural barriers to creating new services and generating new revenues.
But even with new technologies, telcos will miss out on significant opportunities if they do not fundamentally change how they work, STL argues. An STL study of 30 global telecom operators found that more than half of those surveyed said cultural challenges are the biggest barriers to developing and launching successful digital services. Adopting the principles of the cloud allows operators to drive new revenue growth by increasing their ability to create better products and services.
To help put theory into practice, the report identifies 14 network-integrated services enabled by adopting a Telco Cloud model. The report details the characteristics of each service and evaluates each opportunity on ease of implementation and revenue potential. The report also models the revenues for a telco that has launched these Telco Cloud services from 2016-2021.
Download the report to learn more about how a Telco Cloud can help generate new revenues and position telco operators to remain successful in the future.