Plan Continuation Bias in Telecom

R. Pritchard

Summary Bullets:

  • Telecom companies tend to set their strategy for years ahead on an annual basis and usually based on what they did last year.

There used to be an expression at a major telco that ‘products are not launched; they escape.’ This was a result of the historic tendency to double-check (or triple/quadruple-check) every aspect of product and service provision before launch.

With the introduction of competition, things got more efficient – and continue to do so as new entrants join the market both directly and, increasingly, from ‘left of field.’ However, old habits die hard and the quest for technical perfection endures.  Alongside that, corporate cultures and leadership are also evolving to become more agile and flexible, but planning the future tends to rely on updating what was done last year, rather than taking a step back, looking at the big picture, and working out where customers are going and how the market is evolving.

Essentially, it’s a question of turning traditional operating models on their head. It is no longer a case of doing more of X or Y (usually technology) for incremental growth; strategy and delivery need to be flexible, whether that be for rapid launch of new products (Virgin Media O2 launched its Volt service less than 150 days after the joint venture was launched, which is still lightning speed in the telecom world) or – of increasing importance – facilitating the launch of services over/integrated with their networks through partnerships.

Basically, the challenge comes when weighing up the various needs of engineering (‘up poles and down holes’), background systems and processes, and (software-defined) products and services. ‘Rearview mirror planning’ can still be useful for engineering works, but even this is accelerating with the introduction of new infrastructure.

The challenge for today’s telecom service providers is to recognize that things have changed, culturally and operationally, in line with evolving customer needs. You need only to look at how hyperscale cloud providers have emerged not from the telecom sector to see the need to change to achieve significant growth.  Otherwise, service providers may increasingly become purveyors of pipes for other people’s applications and data.

The ongoing trend towards structural separation of networks and services is helping to refocus minds. Infrastructure activities (‘NetCos’) are focused on rolling out, supporting, and maintaining the basic nuts and bolts of fixed and mobile platforms, with service provision activities balancing in-house and partner applications to address the needs of their target customer segments.  By focusing on the needs of specific customer groups, ‘ServCos’ can mix and match services to meet clients’ needs while also developing the service surround to ensure their satisfaction and loyalty.

Enterprises should be aware that change is happening inside telcos. While most would acknowledge they have work to do, a DevOps-oriented minimum viable product methodology is being incubated inside many service providers.  The virtualization of services allows for a remote and granular approach to updates, and this will continue as more services move towards the edge.

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