Choosing a carrier: Innovation

We continue our series of article advising on how to choose a telecommunications carrier with a look at how carrier innovation can ensure viability to safeguard your relationship, while also creating business benefits for their customers.

Telecommunications carriers are often characterised as organisations with offerings that, despite their underlying technical complexity, devolve to the simple offer of connectivity.

Choosing a carrier

But according to analyst firm Gartner, a carrier’s ability to innovate is emerging as a critical differentiator, and even an essential talent if carriers are to survive and serve their customers into the future.

In April 2009, the firm issued a report entitled “Market Trends: Reshaping Carrier Markets, Worldwide 2009 and 2010” which asserted that “Carriers will struggle to maintain market position without major innovation and change.”

One reason for this pressure, the firm says, is that consumers are aware that in tight economic circumstances they hold the whip hand and will find suppliers willing to offer more services at smaller prices. For carriers to deliver more for less, they will need to be able to take advantage of industry innovations and implement them effectively.

Carriers will also need to be able to recognise innovative ways to access the resources needed to deliver services, as the analyst identifies new ways to streamline carrier operations, such as establishing joint ventures and inter-carrier partnerships to conduct core network and other essential operations at lower cost than would otherwise be possible.

Gartner also used a press release announcing the new study to advise carriers to “address all aspects of network space, rather than investing purely in wireless broadband technologies like Long Term Evolution.”

“This will include investing in network control and service layers; contributing to industry initiatives like the IP Multimedia Subsystem Rich Communication Suite; forming partnerships with other carriers, device vendors and social networks to build communities; and focusing on attracting third-party developers.” By undertaking these initiatives, the analysts imply that carriers will make it possible to develop value-adding new products that make carriers more attractive and more relevant, instead of simply being able to connect more customers at higher speeds.

But Tony Simmons, Managing Director of communications consultancy Full Circle Group, warns that not all telco innovations have business benefits.

“A lot of innovation it happens ahead of the curve,” he warns. “Things come to market that look great, but the benefit is not there yet. You need to ask what does more speed mean? Does it have an impact? Do I notice it? Do I care?”

Simmons also asks whether the benefits of a carrier’s unique innovations outweigh the premiums they are likely to charge to access them.

Telsyte Industry Analyst Gary Tsang is also guarded on the subject of carrier innovations.

“Value-added services are more important for non-commoditised telecom services,” he says. But for everyday communications needs, bespoke arrangements have some positives and some negatives

“Any point of differentiation that guarantees service delivery and quality of service is critically important for business operations,” he says. “But if the business requirement not complex, value-adds may create another layer of management and administration effort for an organisation.”


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