Telecommunication service providers have evolved over the decades, but fundamentally they are still operating the original business model: Build infrastructure and sell services over it. It happened first with voice fixed lines more than a century ago, and more recently with mobile, data and video.
Technology evolutions have helped service providers launch new services, gain scale, increase agility and reduce the OPEX through automation. Meanwhile, however, combinations of technical and social transformation have created opportunities for new entrants to disrupt the incumbents:
New regulatory environment + VoIP technology + broadband everywhere = Skype (2003) disrupting voice market
In many cases, telcos responded – belatedly - with similar services. We’ve seen that over and over again. What about the future? Will that attempt at catching up continue or can service providers get ahead of the curve?
The biggest disruptors in the networking space today are SDN and NFV. Many service providers are still figuring out how they can benefit from them. Others just see virtualization as another way to deliver what they are already doing. (CPE vs. vCPE, security vs. virtual security, EPC vs. vEPC).
The reality is that there is a lot more behind SDN and NFV than just technology. The main business benefits include:
How long will it take for a new entrant to disrupt traditional telco services with a completely new approach using SDN and NFV? Or will service providers take disruptive innovation in-house? Doing so runs the risk of cannibalizing existing services, but that’s small compared with being disrupted by new competitors.
Disrupting yourself is not easy. It is about challenging all current business by looking it with a new pair of eyes and asking tough questions, such as: How would an OTT provide a similar service to my VPN with SDN? How would an OTT provide the enterprise managed-services with virtualization?
Some telecom operators have started this process, and they have found how vulnerable their business is now due to lower entry barriers.
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