Network equipment vendors rake in service revenues

By Tammy Parker

The evolving mobile landscape, in which communications service providers find themselves wrestling with falling voice and text revenues as they compete with over-the-top competitors on the data services front, is having a direct impact on major network infrastructure vendors as well. No longer just hawkers of hardware, these companies are increasingly being transformed into providers of software and services as they reposition themselves to become active partners with mobile operators.

The big picture has evolved past the mere addition of more subscribers onto communications networks. Instead, delivering high-quality service over data-intensive networks is a top of mind concern for most CSPs, including cable, wireless, wireline and integrated service providers, according to Accenture, which provides management consulting, technology services and outsourcing.

In a recent Accenture survey of senior executives from 30 CSPs in 22 countries, more than three quarters cited managing quality of service as their biggest headache, and all wireless operator executives cited QoS as their top challenge. Further, 93 percent of CSP executives identified the need for new or improved tools to plan, design and track broadband traffic.

That need has wireless infrastructure providers at a crossroads, as they face slowing demand for their hardware but growing pleas for a complex list of services that includes managed operations, service optimization and assurance, network optimization and assurance, service delivery frameworks, customer experience management, training and education and more. 

"The general value in telecom is moving away from hardware and into software. That's quite clear," said Aditya Kaul, principal analyst and practice director, mobile networks, at ABI Research.

Competition from OTT providers means the closed-hardware, network-centric business model no longer works for mobile operators, which need flexible networks that enable them to compete in a Web-centric world, he added.

Network equipment vendors rake in service revenues
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