Why don’t operators just focus on network innovation?
While it’s interesting to discuss service innovation within the operator domain, it’s easy to spend too much time navel gazing. In our opinion, as we have repeatedly written, if you don’t have either credible content offers (such as a flexible digital supermarket combined with readily available coverage from a leading football league) and/or a strong B2B / M2M story, then there’s not much you can really do beyond being a network provider.
Existential angst in this case is both a waste of time (you won’t be able to innovate services that make sufficient money outside of these areas to replace any revenues you’ve already lost and it’s pointless trying) and a significant diversion from the serious business of thinking about where you can make a difference. It’s pointless fighting lost battles when there are others in which you can both win and make a substantial difference.
And, the answer isn’t that hard to identify. If all you can do is provide a conduit by which users access services provided by other parties, then it will almost certainly pay to offer the best network – which means that the focus of innovation should be solely in this direction. There’s nothing wrong with being the best network provider, far from it. Questions such as “how can I make my network function as efficiently and effectively as possible?” And, “how can I make sure it scales, adapts to surges and flows, cost effectively and in such a way that all of the requirements of current and future services can be met?” are of fundamental importance. After all, whoever provides the services, users have to be able to access them, securely, safely and with the right performance attributes in place.
Of course, that’s not easy. There’s a good deal of debate at the moment about how precisely networks should be optimised for better traffic management, flows and so on. We don’t know; there’s probably a lot of physics involved. No, our point is that this is a topic of fundamental importance and operators should be playing a great deal of attention to this as it’s a clear strategic imperative.
One thing is certain to us, however: operators should certainly not be delegating all of the required network innovation to their network equipment providers. Operators should not be leaving the evolution of network performance and capabilities solely to the equipment vendors.
Rather, they need to be driving the change in partnership with vendors so that they can make the most of technological enhancement that benefits their needs. Not all vendors have their operator customers’ interests at heart and its naïve to imagine that they are somehow disinterested.
But this is a worrying trend. It seems that, over the last 20 years, more and more of the network evolution function has been delegated to equipment vendors, with operators playing a decreasingly important role in this. Is this correct? Have we misread things? We tend to think not but are happy to be corrected.
Network innovation is of critical importance. We can already anticipate the coming world of 5G (although we all need to know what use cases it will serve); we know that NFV / SDN are going to have a profound impact on operator network but what will happen next? How will operators drive forward their networks to support a class of services that we cannot yet anticipate and which will, in all likelihood, will come from parties that use the network capabilities enabled by the operators.
Of course, some operators are taking a leading role in the evolution of network capabilities. But too often, we see operators following their vendors. They should be leading the way – after all, historically, operators have only delivered a handful of services but they have continually developed the network capabilities to support them.
Service innovation is an interesting topic, but it’s one that’s rather wasted at the moment. Network innovation is of far more importance in securing the future role of the operator and it’s this area to which energies should be directed, not in designed isolated services that may or may not catch on. Operators need to think about how their networks can evolve, addressing fundamental questions about their future construction and performance. NFV and SDN technologies will have a profound impact on operator infrastructure: better to be leading the way than passively following.