Eliyahu M Goldratt, in his business novel “The Goal”, introduces us to the idea of the “Theory of Constraints” that can simplistically be described as “a chain is only as strong as the weakest link and one only needs to strengthen the weakest link iteratively to improve the strength of the overall chain”.
So, what are the potential weak links or constraints that need to be addressed in Communication Service Providers’ (CSP’s) operations and business?
In my opinion, one of the major constraints to be addressed is the methodology usually adopted for Network Design. The network continues to be designed for technical performance, although not essentially after considering customer experience with traffic conditions. This leads to multiple optimization steps, each of which add to the cost but, somehow, fail to satisfy the expectations of the customer. As CSPs transform their businesses, they need to ensure a Customer Centric Design approach for Network Design, which places accountability on Customer Experience measures instead of performance measures.
We all know that the gap between traffic growth and revenue growth is widening for CSPs. This, in turn, places an emphasis on controlling the costs – because increase in traffic is associated with increase in network capacities and this, in turn, causes the Opex to go up.
What would be the constraint to be addressed to control Opex?
In my opinion, avoiding costly truck-rolls should be a priority. I believe that sufficient automation can be delivered by using Big Data Analytics and AI tools, which can cut down on truck-rolls. Network Function Virtualization and Cloud Hosted models also offer concentration of network software in datacenters, thereby eliminating truck-rolls on account of software faults.
The agility with which the network capacity can be made available is another significant aspect that CSPs should consider. This has a bearing on customer experience while influencing costs in retaining customers and controlling churn. But the procurement process involved for buying proprietary hardware based telecom equipment can have a lead time of about three to six months! This is the constraint that CSPs need to address for demonstrating agility in scaling capacity. They need to adopt a general purpose hardware with dynamically scalable software licenses model (along with Network Function Virtualization) to become agile in managing capacities.
An analysis of the revenue generation models of CSPs reveals that the skew in traffic to revenue ratio is primarily on account of the consumer segment. Enterprise customers usually pay for superior services, and growth oriented organizations often have increased budgets to meet their communication requirements. Removing the constraints of excessive dependence on consumer segment will benefit CSPs. To achieve this, CSPs will need to change their service catalogue to deliver industry/vertical specific offerings. IOT solutions, cloud services and mobile advertising should be areas that operators should focus on exploiting.
While there could be several more, I believe these are the key elements that would assist the CSPs’ transformation to the 5th wave of networks.
Let us know of other constraints that CSPs should overcome in the comments!