There was a familiar theme at the recent Telco Cloud World Forum in London—one that still demands urgent attention.
Speakers agreed that the IT and telecommunications industries are rapidly converging. That convergence represents both a challenge and an opportunity: communications service providers (CSPs) must adapt quickly to offer a broader set of services beyond traditional voice and data.
The drivers are clear. Cloud and over-the-top (OTT) services have expanded dramatically across business and consumer markets and are no longer a passing trend. Research from MobileSquared projected that by 2016 global smartphone penetration would reach 39%, with around 45% of users actively engaging with OTT services. As adoption grows, the global OTT market is expected to reach substantial value, reflecting massive demand for cloud-enabled, application-driven services.
As traditional revenue streams are squeezed, CSPs are intensely focused on capturing new returns. The cloud opportunity—closely linked to mobility—is a natural fit for CSPs, but many operators have not yet fully monetised it. At the forum, attendees highlighted the need for strategic partnerships to deliver cloud and OTT offerings, and for agile, flexible systems to automate partner management and billing. One recurring point was that CSPs can differentiate themselves from OTT entrants by leveraging infrastructure: CSPs can offer an end-to-end infrastructure portfolio that most OTT players cannot.
Realising these opportunities requires renewed agility across business and operational support systems (B/OSS) as well as in organisational processes. That agility must be practical and rapid, not the result of long, costly transformation projects that stall IT and product innovation.
On the B/OSS side, agility means adopting adjunct solutions that address complex billing scenarios, deploying integrated platforms that use APIs as intelligent connectors across ecosystems, and making focused outsourcing investments to bring in expertise and technology. Such an approach avoids heavyweight rip-and-replace initiatives and enables CSPs to deliver convergent services faster and more efficiently.
Organisational agility is equally important. The issue is less that existing business processes are inherently wrong and more that they can be slow and restrictive. To compete with nimble OTT players and new entrants that are unburdened by legacy systems, CSPs should create smaller, more autonomous business units that can operate like startups—quick to decide, experiment, and launch. A clear example of OTT-style agility discussed at the forum was a lean new product introduction (NPI) process: gather customer requirements, draft the press announcement, and hand that brief to the NPI team with the target launch date.
For CSPs the immediate challenge is to become faster and more cost-effective in delivering a wide variety of services. When faced with complex, costly legacy environments, outsourcing B/OSS to providers offering standardised interfaces within modular, interoperable infrastructures can greatly reduce the time and expense involved in launching convergent products and services.
In the rapidly evolving digital economy, success will be determined less by sheer size and more by speed. Innovation remains essential for CSPs and their vendor partners, but innovation without the agility to execute quickly risks becoming a missed opportunity. CSPs that combine infrastructure strengths with flexible systems, streamlined processes, and partnerships will be best positioned to capture growth as cloud and OTT services continue to reshape the market.