Hey Network Operator: Wanna Focus on Strengths, Partner?

Next Generation Communications Blog

Hey Network Operator: Wanna Focus on Strengths, Partner?

By David Sims

If you're a service provider today you have something of a conundrum: You want to maximize revenue, of course. This means keeping your network infrastructure delivering services reliably and cost effectively, which means investing in new access and delivery improvements.
And you have to do it without "alienating existing subscribers and applications, including those running on existing legacy systems," as TMC's Erik Linask has noted.
A recent paper from Alcatel-Lucent recommends considering partnerships, to allow you to focus on your core business competency, or strength. "Delivering the experience that end users and ecosystem partners want requires a shift to open business models. This evolution creates opportunities to develop partnerships with new revenue models and shared risks and rewards as well as opportunities to outsource some parts of your network or operations."
Generating revenue in a cloud computing environment is tricky. Industry analyst Jeff Kaplan wrote last June that the cloud computing industry "will borrow some of the best practices of previous generations of tech partnerships to solve today's revenue sharing challenge. "
The rapidly evolving cloud environment "is creating a new set of supply-chain relationships which will be governed by the same partnering principles of the past, but with a different set of revenue tracking requirements and economic parameters," Kaplan said, adding that this means "new tools and techniques will have to be employed to automate the monitoring and billing processes so they are cost-effective in this price-competitive market."
Sprint-Nextel's Stephen Parrott recommends network operators ask themselves two questions: "What is a carrier's (wireless or wireline) main business mission? And what is the core competency that a carrier must have to fulfill this mission?"
Beyond that, Parrott says, consider partnering to focus more on your core competency. "I would argue that the definition of carrier core competencies may also be changing," he says.
"Historically, a carrier's core competency was measured first by owning and running its network and second by the products that network supported. This model resulted in lots of well-run networks ... that everyone hated using."
According to a Yankee Group report, he says, "carriers are being forced to rethink their business models. Network assets still matter, but delivering compelling services matters more."
Parrott thinks carriers will "continue turning to partners for the back-end operations so they can focus on technology development, customer service, marketing - whatever it takes to best serve the customer."

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