How can I minimize the risk of new investments while increasing my network bandwidth, capacity and speed?

Next Generation Communications Blog

How can I minimize the risk of new investments while increasing my network bandwidth, capacity and speed?

Wise budgeting has always been a hallmark of successful businesses, but the current economic climate has forced the entire business world to scrutinize every investment more cautiously than ever before. In the communications space, it has resulted in the development of new business models that, though driven by extreme situations, may ultimately create more effective operations.
 
For instance, the hosted communications space has gained significant momentum because of its ability to provide valuable next generation communications services without the need for investment in infrastructure.
 
For network operators, a similar trend is on the horizon. 
 
There is no question carrier networks must be upgraded to accommodate growing demand for bandwidth intensive services and content, driven by a host of new devices and multimedia content being developed today. However, the investment required to upgrade networks to what Alcatel-Lucent calls high leverage networks - networks that provide scalability and flexibility to meet growing subscriber demands for contextually aware applications, without sacrificing service quality or reliability - is beyond the capabilities for many, at least to the degree to which they desire to expand their reach.
 
Thus, to achieve scale and deliver new capabilities without taking on undue investment risk, many operators are looking at a new business model that is not unlike the hosted model in the enterprise communications space. Rather than building out their own networks to deliver new services and to reach new subscribers, they are looking to outsource their networking needs to other partners with established IP networks, looking more towards being a pure service provider and less a network operator.
 
What this will create is two distinctly different entities within the service provider space - the network owners/operators and the service/content providers. In fact, the market is already witnessing the evolution to this new model with the growth of the wholesale market, through which network owners are effectively selling space on their networks to other providers.
 
It's a model that works well for both sides. The network owners are able to increase the return on their network investments thanks to increased "rental" traffic, and the "renters" gain access to subscribers in areas in which they don't own network assets without having to invest time and capital in building out their infrastructures.
 
Quite simply, as network operators migrate to all-IP high leverage networks, they will increase their ability to provider new services to subscribers but, at the same time, the general industry move to all-IP eliminates the network as a differentiating factor. Thus, it becomes more effective to explore network sharing or outsourcing models, which will create a substantially different carrier landscape than today's - and one that will drive new carrier relationships out of necessity.
 
To read more on the future of the network operator, read Alcatel-Lucent's white paper, The Coming Carrier Network Infrastructure - A Very Different Landscape.


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