Industry transformation
The telecom industry is in the middle of the greatest transformation in history. In addition to mergers that increase competition, many countries are seeing mobile subscriber growth slowing or even stalled. In most regions, customers who want a mobile phone already have one. This leaves wireless providers with the challenge of maintaining low churn, reducing the cost of operations, and driving revenue from new sources. They need to be quite judicious about where to make capital investments.
In the cable industry, set-top boxes are becoming less of a focus as customers flock to streaming services. The shift from on-net media to streaming is resulting in a significant jump in internet bandwidth consumption, while simultaneously lowering the revenue per user.
This insatiable appetite for bandwidth both in cable and mobile is forcing significant investments in the network as the CSPs wrestle with slow organic growth in subscribership and reduced revenue per user. The challenge is not insignificant.
New technologies drive change
Technologies such as DOCSIS 3.1 and 5G make it possible to take advantage of lower cost per bit to deliver bandwidth and promise to improve the subscribers’ quality of experience. While these technologies may improve the economics of delivering IP Packets, other technologies such as NFV promise to change the way networks are operated. For example, in a virtual network CSPs should expect to see dozens of Virtual Network Elements, where the traditional network may only have one or two. It is also probable that there will be many more vendors in the virtual network than in the legacy network. This will radically change current operations practices and will force vendors to support CSPs differently than they do today. The increase in vendor diversity will result in complex interoperability and integration requirements. There will be a greater number of challenges ranging from security risks to never before seen failures, that must be identified and mitigated using new standards-based tools and practices. Taking on the challenge of managing so many diverse network elements with new tools presents a significant feat for the operations teams.
Becoming data-centric
Operating the network in the most efficient way possible requires the CSP to become more data-centric. What does this mean? Becoming data-centric means leveraging the plethora of data that is being generated by the network equipment and subscribers. The value of this data spans the entire company- from operations to planning, from network security to marketing, from finance to customer service. It is often said that analytics can be used to make money and save money. Companies like Target, Amazon, and Google are famous for leveraging subscriber data to make money. Ad targeting is a common application of analytics for revenue generation along with recommendation engines that guide customers to products and services they may be interested in purchasing.
However, faced with the prospect of the cost per user outpacing the revenue per user, saving money is a primary focus for CSPs. Each year CSPs invest a tremendous amount of money in capital assets such as real estate and networking equipment. Analytics has demonstrated success in targeting capital investments. Putting money at the right place at the right time is critical in modern networks. As revenue per user begins to slow, it is much more critical to focus expenditures where the biggest return on investment will be recognized.
Analytics ensure optimal spending
Using analytics to understand and forecast usage and demand patterns is a key application for optimizing planning. Deferring capital spend is crucial in high-cost, highly-constrained resources like the Radio Access Network. As an example, analytics applications make it possible to predict congestion and implement policies in order to mitigate the congestion event. By controlling just a few high-bandwidth congestion events, the capacity of the cell is once again freed up, allowing the operator to defer the capital expense of adding additional capacity to that cell.
In cable, major MSOs are using analytics to prioritize which pieces of equipment need to be upgraded first when rolling out new services. By associating subscribers with equipment versions, examining failure rates over time, and correlating associated customer calls and incidents, MSOs can quickly prioritize equipment changes. Non-critical upgrades can be deferred, saving millions in capital expenses, while still maintaining a high level of customer experience.
As CSPs see increased competition and reduced organic growth, knowing precisely where and when to spend money becomes more critical than ever. Using analytics to become data-centric enables organizations to achieve that objective and will result in improved customer experience, reduced cost of operations, and more capital efficiency.
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