Agile Operator Survey: 2013 Opportunities and Threats
By: Jesse Cryderman
“Destiny is not a matter of chance; it is a matter of choice.” ―William Jennings Bryan
As the world prepares to review and renew resolutions and ring in a new year, it’s time for communications service providers (CSPs) to adopt a similar approach — to take stock of industry developments in 2012 and prepare for 2013. To craft our destinies we must ask: what did we learn from 2012, and how can we better position ourselves for the coming year? Buzzy solutions like big data, while worthy of discussion, are quite different from informed strategies that help service providers capitalize on big opportunity and big incentives.
Some of the stories in 2012 were not new, like the decline in traditional service revenues. Households continue to cut their landlines in favor of wireless or VoIP solutions. In fact over the past five years the number of households without a landline has tripled. How communications service providers (CSPs) will respond to this development will be an ongoing challenge.
Similarly, broadband internet access is still unevenly distributed around the US, and households outside of major cities are underserved. The FCC’s National Broadband Map presents a thorough analysis of these service discrepancies.
This year, though, the FCC’s response to these trends presented a host of new risks and opportunities. The Universal Service Fund (USF) and Inter-Carrier Compensation (ICC) system are undergoing a massive overhaul. Then there’s the National Broadband Plan and the FCC’s 100 Squared Initiative, which aims to get 100Mbps broadband in 100 million American households by 2020. Since the telephone company is rapidly becoming the broadband company, serious questions regarding infrastructure investment and support systems must be addressed.
Growth in the cloud service economy showed no signs of slowing in 2012. CSPs have a wealth of unique subscriber data and a trusted billing relationship that can be leveraged, provided they commit to the right strategy. Gartner expects the cloud market to balloon to $160 billion in 2013, and 60 percent of server workloads virtualized by 2014. At the same time, concerns about the security and reliability of the cloud were brought to light in 2012: Hurricane Sandy’s impact on east coast data centers and infrastructure reiterated the necessity for disaster preparedness and redundancy. And as more businesses move sensitive data and operations to the cloud, the need for security will increase. “By 2016, 40 percent of enterprises will make proof of independent security testing a precondition for using any type of cloud service,” Gartner reported.
Several years ago only one wireless carrier sold the iPhone, 4G service was barely deployed, high-speed mobile coverage was anemic, and compelling Android smartphones had yet to make an impact on consumers. In other words the sexiest devices and fastest mobile networks belonged to a select few. But in 2012 the wireless landscape changed immensely; even prepaid service providers offer the iPhone and 4G LTE connectivity. As a result customer experience management (CEM) has moved to the forefront as a way for CSPs to differentiate themselves. How service providers undertake the cultural transformation to a customer-centric organization is crucial but not exactly easy.
Regulatory and financial pressures continued to drive a need for greater operational efficiencies in 2012, leading many CSPs to take advantage of managed services and offload select operations to partners. Simultaneously, agile CSPs are finding ways to leverage their partnerships to offer white-labeled managed services to their customers. For many CSPs managed-service offerings contributed to a larger share of revenue in 2012 than in past years; this market opportunity will continue to grow, but service providers need to innovate and remain flexible to fend off competition and retain their enterprise customers.
