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Telecoms operators are becoming dinosaurs

by on11 April 2012

Analysts warn them to adapt or die

Law firm Pinsent Masons has warned telecoms outfits that they are going to have to adapt to modern trends or die.

In a new report, the law firm said that in an increasingly competitive and ‘always on’ world, telecoms carriers need to focused on their key strengths and adopt more service-based business models if they are to survive.
In otherwords be more useful to their customers rather than their shareholders. The whitepaper report discusses how increased competition and a changing legal background have impacted upon the telecoms industry.

It said that carriers have the problem of exponentially increasing data  volumes over the last five years and greater competition from new entrants to the telecoms market. This has forced carriers to dramatically reassess their business models as they try and match investment and focus to the needs of a data-driven world. Jon Fell, partner, Pinsent Masons said that the telecommunications market is going through its biggest era of change since the introduction of mobile telephony.

“The first response of carriers to the changes of the last five years was to try to become all things to all people. However that risks losing focus as it adds new challenges potentially outside their traditional experience,” he said.

But as the  markets change their new business models have to concentrate on their key strengths – the operation and management of networks, essentially selling their capacity to others and becoming managed services providers, sweating their network assets to deliver profits, he added. He said that carriers need to focus on developing their infrastructure to cope with the massive current and predicted increases in data, both through mobile devices and higher usage of technologies such as video streaming in the home.

This will mean they will have to spend a fortune increasing their infrastructure. Carriers need to look how they can best use the spectrum and consider whether spectrum sharing strategies (where allowed) are efficient, he said.

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