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GlobalData Technology

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How communication service providers can become more agile

Communications service providers (CSPs) face declining carriage revenue and increasing competition from traditional rivals and disruptors in the form of over the top (OTT) players, cloud-based service providers and new market entrants with leaner operating models.

Against this backdrop, CSPs see an urgency to improve customer service to minimise churn, develop digital sales channels and embrace cloud and digital solutions to achieve operational agility.

At the same time, technology advancement is opening up new opportunities for CSPs in the enterprise segment. Examples include SDN/NFV, big data, cloud, AI/ML, cybersecurity, IoT and 5G. Enterprises across various industry verticals are tapping insights from customer data to gain competitive advantages.

CSPs hold vast amount of data and operate very complex IT systems and networks. There are opportunities for CSPs to transform their business and operations through the use of digital solutions but major changes need to occur for a CSP to be successful. These include developing new partnerships, upskilling/reskilling their workforce, changing the culture and streamlining systems and processes.

An imperative for CSPs is to improve the agility of their operations. This can include applying agile methodologies for product development and modernising IT which include moving applications to the cloud.

Many tier-1 CSPs will find this a challenging process since they have many legacy systems, a diverse product set and a massive customer base.

However, this is a necessary move to enable the digital channel that promotes self-service, automation and fast turnaround. By consolidating disparate databases and applying advanced analytics, CSPs can better understand customer demand and offer personalised, differentiated services.

Particularly in the small and medium-sized business (SMB) segment, many CSPs have not been able to sell more services beyond basic voice and connectivity. SMBs sourcing for IT and network services will look for agility, simplicity and consumption-based models.

To address the needs of SMB customers, CSPs need to develop digital platforms that simplify the way customers can order services.

The platform should provide a catalogue of modular services to allow customers to create their own bundles. Service pricing should be transparent and automatically generated to reduce latency.

Service ordering and provisioning needs to be fast by automating back-end processes. Customers should also have the tools and dashboards to track their service delivery, usage, billing, etc.

Since there is a large number of SMBs in any market, the key is to service them more effectively through highly automated digital channels.

Moreover SDN and virtualisation technologies are changing the way network services can be delivered; enabling network-as-a-service (NaaS) offerings. Many CSPs have either launched SD-WAN services or are preparing to do so.

The next iteration will see the addition of virtual network functions (VNFs) to deliver more adaptive network solutions. Enterprises are also looking to these solutions to improve the management of their edge networks which may need to support various IoT applications in the future.

These services are increasingly being provisioned and managed through automated digital platforms. CSPs need to respond to these changes quickly since there are players such as data centre interconnect specialists, system integrators with networking expertise and cloud services providers entering the fray to offer network services leveraging SDN technologies.

CSPs that are able to transform their business effectively will gain market share and create new revenue streams. Those that delay the process will have to accept a declining margin as their business becomes increasingly commoditised.

This article also appears on Verdict, which is part of the same group as NS Tech and GlobalData