Incumbent Telcos Are Slow to Adopt Next-Generation Service Strategies, New Report FindsA continued focus on infrastructure investment is leaving telcos unprepared for the transition to 'next-generation service providers,' says Heavy ReadingPRNewswire NEW YORK, April 4, 2008 /PRNewswire/ -- Despite widespread acknowledgment that market forces will require them to undertake a massive transformation to become next-generation service providers, many of the world's largest telecom companies are continuing to invest more in conventional infrastructure upgrades than in technologies that will enable next-gen transformation, according to a major new report from Heavy Reading (http://www.heavyreading.com/), the research division of Techweb's Light Reading (http://www.lightreading.com/). Reinventing the Telco: A Heavy Reading Progress Report explores and analyzes the key strategies and decision points that Tier 1 incumbent telcos are now facing as they make their long-term network and business transformation plans. The report is based on an exclusive, worldwide survey of network operator professionals and their technology suppliers focusing on their organizations' plans and perceptions regarding next-gen telco transformation. In total, more than 360 telecom industry professionals participated in the survey, including nearly 150 respondents from network operators -- with the largest group of network operator respondents coming from incumbent telcos. For a partial list of network operators represented in the survey, go to: http://img.lightreading.com/heavyreading/pdf/hr20080403_companies.pdf In addition to presenting and analyzing survey results, the report delivers a deep-dive analysis of five major incumbents that are trying to transform themselves into next-generation telcos: France Telecom, KT, NTT, TeliaSonera, and Verizon. Together, the survey results and individual company analyses provide clear and compelling insight not only into how telcos see the next-gen services environment evolving, but also into the factors that are now driving telco decision-making processes and strategic priorities. "Incumbent telcos around the world continue to invest heavily in next-generation network (NGN) technologies to ensure their long-term future as profitable providers of network services," notes Graham Finnie, Chief Analyst of Heavy Reading and author of the report. "But while there's a clear consensus on the core elements that constitute NGNs, the telecom industry is still struggling with the concept of the next-gen telco." Many telcos are struggling to figure out where to go next to fill the revenue gap left by the dismantling of their telephony business models, Finnie adds. "For well over a century, the focus for incumbent telcos has been on rolling out infrastructures, rather than supplying new services," he explains. "Since telcos no longer control the supply of applications and services, most of which emerge from the Web, they no longer control their future sources of revenue." Key findings of Reinventing the Telco: A Heavy Reading Progress Report include the following: Despite the strong desire to create more attractive service packages, telcos continue to favor investment in access infrastructure above all other priorities. By comparison, investment in applications and content development software are seen as much less important. Big telcos remain overwhelmingly reliant on two basic services for their revenues -- telephony, and access to the Internet. For the average mainstream telco, voice and Internet access service account for at least 80 percent of revenue, and usually more than 90 percent. Telcos believe that the biggest investment priorities are new access infrastructure and new core infrastructure. Investment in applications and content development tools is seen as much less important, based on survey responses. Yet when asked whether they should prioritize investment in infrastructure or services, respondents were split down the middle -- suggesting internal disagreement and uncertainty about priorities for the future. Telcos and their suppliers still believe that the future lies in telcos themselves provisioning a wide range of packaged services to end users. However, a significant minority of survey respondents believed that telcos should focus on providing basic bandwidth along with enabling capabilities (such as QOS) for third-party service providers. At the same time, telcos believe that they can add value to third-party services by offering them a wide range of enabling capabilities. The most important of these capabilities, our survey found, are the ability to bill subscribers; the ability to authorize subscribers and manage their identities; the ability to offer security tools; and the ability to offer QOS guarantees on a per-application or per-subscriber basis. Reinventing the Telco: A Heavy Reading Progress Report is essential reading for a wide range of industry participants, including the following: -- Telecom service providers: How are telcos approaching next-gen
transformation issues? What do incumbent telcos see as their long-term
goals for providing and delivering connectivity and services? How are
telcos prioritizing their capital spending, and are those priorities
consistent with their next-gen telco initiatives? How important a role
will incumbency play in the development of next-gen telcos? What are
the potential opportunities for smaller competitors in the next-gen
environment?
-- Technology suppliers: How do telco spending priorities for next-gen
services mesh with your current and projected product portfolios? Is
your company well positioned to meet the changing needs of incumbent
telcos and their competitors, or do you need to consider strategic
changes in direction to stay ahead of customer demand? How quickly are
telcos likely to deploy next-gen service transformation programs, and
what are their first steps most likely to be?
-- Investors: How will the emergence of next-gen telcos affect the telecom
supply chain? Which technology providers are likely to emerge as the
main suppliers of next-gen telco products, and when are they most
likely to reap those benefits? How will the transition to next-gen
services affect the financial performance of incumbent and competitive
network operators?
Reinventing the Telco: A Heavy Reading Progress Report costs $3,995 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company. For more information, or to request a free executive summary, contact: Dave Williams Sales Director, Heavy Reading 858-485-8870 dave.williams@heavyreading.com Press/analyst contact: Dennis Mendyk Managing Director, Heavy Reading 201-587-2154 mendyk@heavyreading.com About Heavy Reading Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next-generation hardware and software. About TechWeb TechWeb, the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 10 million business technology professionals actively engage with and rely on our global face-to-face events, including Interop, Web 2.0, Black Hat and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, Wall Street & Technology, TechNet and MSDN Magazines. TechWeb also provides end-to-end services ranging from next-generation performance marketing, custom media, research, and analyst services. TechWeb is a division of United Business Media (http://www.unitedbusinessmedia.com/), a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 SOURCE: Heavy Reading CONTACT: Dave Williams, Sales Director, Heavy Reading, +1-858-485-8870, Web site: http://www.heavyreading.com/ |