Beyond the Bandwidth

With cloud, a real opportunity lies ahead for telcos, to address some long awaited services

With rapidly changing ICT delivery paradigms, we are entering the era of everything-asa-service. Though well positioned, telecom service providers are yet to really leverage their existing engagements with the consumers for the delivery of a diverse set of services beyond mere connectivity. This is not to discount some directed progress that they have made nevertheless. For example, it’s been for quite some time that the telecom service providers have been delivering telephony and the internet broadband access over the same pipe, such as a DSL link. Now, with the same pipe being used to deliver IPTV services as well, the promise of triple-play is coming true. (While IPTV had been launched a few years ago, it is only now that the quality of experience is coming to an acceptable level).

Likewise, the promise of a wider wireless pipe in 3G means that richer media services like video calling, wireless broadband, and mobile TV could be satisfactorily picked up by cross sections of consumers. Telcos will need to know their subscribers better to be able to reach out to them with a bouquet of newer ICT and content-related services. That understanding would come through extensive use of tools such as business intelligence and analytics built into their IT systems.

ICT is today at a stage where the emerging ‘cloud’ paradigm presents an opportunity, both for the consumers and the service providers. By partnering with various other stakeholders in the ecosystem, telcos would need to position themselves as first touch points for their various requirements. Cloud is an effective delivery model for catering to the needs of a long tail, as has been amply exemplified by the success of the internet companies. The telecom subscribers in India also form a long tail of consumers, given that most of them come from the middle and bottom of the socioeconomic pyramid.

True, bandwidth and spectrum will continue to play a fundamental role in enabling access for the long tail and so a ramp-up on that front cannot be over- looked. But the higher value for the consumer lies in the services that are enabled by the underlying bandwidth and not the bandwidth itself.

The Cloud Orchestration Opportunity

There would be new opportunities for the more progressive telcos to offer cloud orchestration services, as cloud service providers, for the enterprises. As we migrate to a cloud environment, the cloud service buyers will have to manage a larger number of cloud services and vendors, adding a level of management difficulty for them. Thus, end-to-end service management across this hybrid environment becomes a vital opportunity for telcos and others, as cloud service providers.

Cross-industry M&AS

M&AS leading to a consolidation in the telecom industry is a possibility, yes, but M&AS spanning the telecom adjacencies are also a likelihood. For large telcos, subscriber addition, especially at the lowerend of the socioeconomic pyramid, is a priority of the bygone era. Instead, they would need to focus on adjacencies like cloud and MS, and in this light they would be more keen on cross-industry M&AS.

As of now, they risk losing the natural cloud service provider advantage to SIS as the later is moving faster to gain the early mover advantages. This could also lead to telco-si M&A activities for a more wholesome cloud play.

Big Pipes for Big Data

The use of big data is slowly but surely becoming a key way for the leading companies to outperform their peers and they are realizing that it is well worth the investment. Service providers stand to play the obvious but critical role of hyper-speed network providers as big data would require big pipes at the same time. Telcos, therefore need to be readying for the big-data world, for delivering hyperspeed to hyper-connect.

In-building Solutions

Operators will see the importance of actively evaluating in-building solutions like femtocells and picocells, for the dual benefits of better coverage and reduced opex costs. The use of in-building solutions would help enhance the quality of service and experience for the subscribers. It would also allow the operators to reduce traffic on their radio networks, by offloading user data onto an in-premise wired network, and thus pack more 3G subscribers into the cells at a given pointin-time. A significant additional benefit for the operators would come in the form of better opex management, as the femtocells could be powered in-premise and can even be Poe-enabled, as opposed to BTSS that account for a major opex cost for telcos, as being powered by gensets is a norm rather than an exception in various parts of the country.

Rich Feature Phones and Smartphones

Smarter feature phones and smartphones at sub-usd100 levels would help drive data usage and subscription. New device and client based compression, acceleration, and virtualization technologies will help make mobile internet access speedier and affordable. For example, a leading handset vendor has come up with a browser client that could compress web pages up to 90%. Such technologies would make the internet access much cheaper for a large number of feature phone users and even act as a pull to bring them into the mobile internet access fold. Chipmakers on their part too, have already been coming up with hardwarelevel acceleration for the internet access. Again, this would help improve quality of experience for the subscribers. These developments would help drive adoption

of data services, including 3G. Content and screen-aware pricing would also gain significance.

The Regulatory Landscape

The regulatory environment has changed much over the years. From being moderately regulated, the India telecom market has become significantly regulated. The existing spectrum pricing uncertainties would refuse to go away, so innovative approaches would be needed to have greater efficacy of appeal. The industry would continue to work and debate with the regulator, the licensor, and the policy makers to bring in a rationalized approach to spectrum allocation and pricing. However given that the government’s approach to spectrum has been of a GDP contributor, the routine efforts are expected to yield some results.

The existing spectrum pricing uncertainties would refuse to go away, so innovative approaches would be needed to have greater efficacy of appeal

The likely solutions to the problem could lie in finding innovative ways of leveraging and optimizing the spectrum as a resource. For example, instead of assigning specific and fixed spectrum blocks

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to different operators, a common pool of frequencies could be created, to cater to the spectrum needs of various operators and their subscribers. Call that spectrum virtualization!

A long-term solution would lie in working with the regulator and policy makers to delink the spectrum from the license. Essentially, an operator would need to have a license without actually owing any spectrum, which would be lying in the pool. There could be a consortium entity managing and allocating the spectrum. SPS would then be able to focus on subscriber acquisition and would compete mutually on the parameters like quality of service and user experience.

The author is director, Telecommunications Research IDC, India

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