Incumbent Telcos Must Rethink What They Sell and How They Sell It - Report

The telecoms industry has to face up to and plan around the long-term re-orientation of value, and incumbent telecoms operators must rethink what they sell and how they sell it, according to two new reports published by Analysys.

"Value will come from an increasingly complex and hybrid combination of networks, applications and devices, and in order to benefit from these fundamental changes incumbent telcos will need to think beyond the current model of deriving all revenue streams in the form of services from their network assets," says Dr Rupert Wood, lead author of The Telco Product Portfolio beyond 2010. "This complex environment will exacerbate tensions between network operation and retailing, and operators will therefore need to develop looser structures between the two."

According to Analysys, resisting the threats to traditional voice services by overhauling voice networks and reducing operating costs may prove costly and ultimately self-defeating for incumbents, as mobile voice will tend to win in price wars. A proactive engagement with broadband, and an accommodation with mobile, has the obvious advantage of targeting the most promising growth areas for revenue. However, broadband presents two major problems for operators.

As Wood explains: "First, IP can transform network-derived services into edge applications, so voice can be transformed into an application and can be sold through edge devices. Second, faster broadband will begin to trespass on the broadcasting industry, and broadcasting is more efficient for the delivery of one-to-many content. For on-demand content, the increasing capacity of affordable home storage devices means that the business case for networking content is being continually weakened."

In many cases, the report argues, the kinds of service

Posted to the site on 30th June 2005