By Timo Ahomäki, CTO at Tecnotree
The consolidation of the telecoms industry continues with larger players consolidating to capitalise on their economies of scale in a concerted effort to ensure their future in an increasingly fragile industry.
For smaller Communication Service Providers (CSPs), survival is continuing to be a challenge as their bigger competitors continue to control the market. But surviving is not always about beating the bigger competitors at their own game, it’s about being creative and focussed about business decisions.
One clear trend that we have seen within the industry is that large telecoms players are increasingly working together across borders to expand their operations into adjacent sectors - which can often appear intimidating for smaller operators not able to follow.
A recent example of this type of consolidation is Deutsche Telekom and China Telecom forming a partnership to expand the reach of DT’s Connected Cars ecosystem to China.
This, naturally, is a type of consolidation largely out of reach for the small players lacking the massive negotiating power of their larger peers.
One of the advantages of being small, however, lies in the small size itself, which can allow a different type of partnership to be implemented more efficiently.
There isn’t a large corporate system to sell an idea into, or a complex process to adhere to. Often there’s not even an existing IT infrastructure to rely on, which actually can be an advantage when agility is the primary goal.
Using this agility and working with like-minded small and/or local companies from adjacent sectors such as music, hospitability, traffic, etc. the smaller players together can quickly explore new areas without too much initial investment.
Similarly, when the market changes direction, smaller CSPs have the capacity to be more agile, which is a particularly strong advantage when it comes to listening to customers and addressing any weak signals from the customer base using a variety of methods.
The needs and wants from niche customers groups and early adopters of new services are much more likely to get lost in the system of a large organisation, leading to missed early opportunities and frustration from the side of potential partners.
If smaller CSPs can show that they can address such opportunities much more effectively, they will find themselves in a position to more easily attract partnerships from like-minded companies in adjacent sectors.
All these size-related advantages are no good, though, if small CSPs are not capable of capitalising on them, for example having IT systems too inflexible to respond to rapidly changing requirements.
It can therefore be claimed that the small CSP - especially one just starting operations - is better off utilising the internet start-up model of deploying “quick-and-dirty” point solutions as new opportunities arise, rather than trying to build an integrated BSS stack to address all of them using a single set of systems.
After all, what good is a perfectly integrated IT system if there is no business to support after an initial trial?
Longer term, however, deploying a consolidated BSS has clear benefits. Short-term agility just needs to be balanced with long-term manageability.
One approach getting more traction is by starting off with a basic set of BSS components deployed in a “start-up configuration”.
Such as a system that provides support to all the basic business processes required by any CSP, together with a rich set of interfaces to attach external systems as the need arises.
So instead of trying to build a system to consolidate all the possible future business scenarios, it may be more appropriate to build a system that integrates new point solutions as the need arises, effectively embracing a best of both worlds’ approach.
The survival of small operators is a requirement for the industry. Not just for customers, but also for the health of the telecoms sector.
There are many advantages to being a small CSP and for every possible advantage there is a valuable opportunity to be seized.
The best proof of value for small operators will be in their service. So, when it comes to BSS, fast deployment, flexibility and low risk in terms of the integration of ad-hoc point solutions will be crucial for small operators, particularly in the fast developing emerging markets.
Particularly with the rapid advancements in the partnering space, securing IT systems that balance the stability and quality requirements of the customer interface with agility in the services level will ensure more valuable and longer lasting investments.
In turn, this will have an impact on customer service and therefore customer retention – a win-win all round!