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As Telcos Struggle to Profitability, Change is a Must

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As Telcos Struggle to Profitability, Change is a Must

September 07, 2016

  By Susan J. Campbell, TMCnet Contributing Editor

No company wants to be in a market where traffic is increasing, yet revenues are on a steady decline. Unfortunately, that is the state of reality for too many telcos. If change is not an option, many will find it hard to remain relevant and profitable. In a market where open networking and content creation are king, it’s time for telcos to make a change.

A recent IT Online piece explored this current challenge for telcos. As Internet companies are leveraging open networking to bring new products to market, new revenue streams are lining pockets. This trend is removing the competitive nature of the telco from the market, creating an environment where without change, telcos will quickly become irrelevant.

A good first step for today’s telco is to clean up the network. Continuing down the same path for their infrastructure will lead to certain failure for the telco. At the same time, these providers need a new way of approaching production. The Internet of Things is gaining more and more relevance, suggesting a growing demand for specific cloud operations.

Telcos also need to change network management. The complexity of traditional management and support creates bottlenecks. To be truly effective in today’s market, companies have to be nimble in order to embrace software defined networking and open networking. When trimming the infrastructure and costs, while also adopting innovation in the way they do business, telcos can move faster and achieve higher bandwidth.

The challenge, of course, is knowing the right direction to take. Mistakes are costly and understanding what the opportunities are today and tomorrow is never easy. Certain questions have to be answered, such as whether or not the telco should focus any energy on IPv4 or move all attention to IPv6. Are the protocols in the network necessary and do they add value? Is the development of a new architecture a viable option?

Paying attention to consumer behaviors and the demands of today’s enterprise and small business is critical. At the same time, telcos have to observe the way content is being created, distributed and consumed. All of these elements play into the demand for the optimal communications platform. But will they be all that should be considered tomorrow? Not likely – the telco that wants to be profitable both today and today has to be agile and has to pay attention to the market. Anything else will certainly create a path to eventual failure. 

Edited by Maurice Nagle

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