Communications Service Providers Compelled to Adopt New Technologies and Business Models to Meet Customer Service Demands over Data-Hungry Networks, Accenture Survey Finds
Faced with ongoing economic challenges, declining voice and text
revenues, and the need to address customers’ quality of service
expectations on data-intensive networks, communications service
providers (CSPs) are being compelled to consider revamping their
operating models and adopting new transformational technologies to
survive and thrive, according to a survey from Accenture (NYSE:ACN).
Accenture conducted the survey, “Evolutionary Trends in the Operations
of CSP Networks: How the Migration to Broadband Data Services is
Shifting the Paradigm of Network Operations,” to understand and explore
the evolutionary trends in CSPs’ network operations, including the main
drivers of change and the lessons learned from new operating models that
companies are using. Thirty of the world’s leading communications and
media companies were surveyed.
CSPs see the need to invest in network tools and technology
The survey confirmed that new technology introductions, quality issues,
and cost pressures are among the key drivers forcing CSPs to shift
toward more accurate models for controlling network planning and
enhancing quality of service, supported by new capabilities such as
analytics. In fact, the overwhelming majority (93 percent) of CSP
executives surveyed identified the need for new or improved tools to
plan, design, and track traffic on broadband or cable networks.
One-third (33 percent) said they need to significantly revamp the tools
used for broadband deployment, while another 60 percent would consider
adding some tools.
When asked about technology investments, three-quarters (75 percent) of
wireless operators and integrated services providers plan to implement
long term evolution (LTE), a standard for wireless communication of
high-speed data for mobile phones and data terminals, in the next three
to five years to increase network capacity for faster data
transmissions. In addition, all wireline providers said they would swap
all or part of the cable used to connect homes and businesses from
copper to fiber optic, also over the same time frame.
All interviewees plan to invest in network analytics tools, and more
than half (53 percent) cited customer experience improvements as the
most important reason. These tools are typically used to analyze network
data alarms, performance measures, trouble tickets, and customer churn
due to dropped calls in an effort to improve network service quality.
To reduce network operations spending while transforming operations,
CSPs favor a variety of approaches. Thirty-three percent prefer to
manage the transformation internally, while 27 percent prefer
transformation by outsourcing (managed services) and 40 percent prefer a
combination of both.
“This survey paints a picture of a telecom industry in transition,
buffeted by a storm which is both economic and technological in nature,
with an impact across the entire value chain,” said Paolo Sidoti, global
managing director of Accenture’s Network Business Services group. “A
challenging global economic climate, combined with reduced consumer
spending for telecommunications services, is driving a rapid decline in
traditional voice- and text-based revenues. Data traffic continues to
rise, but data revenue is growing at a slower rate.
“Plus, over-the-top services, such as substitutes for traditional SMS
text messaging and other services, are continuing to put pressure on
carriers’ overall revenue. And although some CSPs totally embrace the
new realities, others are taking much more of a ‘pick and choose’
approach to dealing with the challenges swirling around them.”
Operating models to consider: managed services and network
sharing
The survey found that a large majority (80 percent) of CSPs have entered
into managed services agreements using a range of models and
incorporating different scopes of work, with 43 percent in both mature
and emerging markets willing to outsource some of their tasks. When
asked for more specifics regarding managed services, more than half (58
percent) said managed services/outsourcing deals met their expectations
for quality compared with their own resources, and half (50 percent)
said implementing a managed services approach delivered expected savings.
Regarding network sharing, which helps reduce costs using a shared
infrastructure, the survey revealed differences between mature and
emerging markets. CSPs in emerging markets are much more likely to
deploy network sharing for their mobile broadband networks (56 percent),
compared with the mature market operators (nine percent). CSPs in
emerging markets are also more likely to use network sharing for new and
existing infrastructure, rather than only existing infrastructure.
Regulatory concerns (77 percent) and competition (73 percent) were cited
as key factors that can preclude network sharing in emerging markets.
Quality of service is the overriding challenge
Most respondents (77 percent) said managing the quality of services is
the biggest challenge in today’s communications environment, especially
in a shared network environment. All wireless CSPs cited quality of
service as the top challenge, as did most wireline (83 percent) and
cable (75 percent) providers.
“Clearly, traditional operating models cannot completely meet current
CSP requirements,” Sidoti said. “Instead, CSPs need a more
industrialized and collaborative approach, with the right strategy,
execution support, and transformation initiatives that can enable them
to adopt new operating models, becoming leaner organizations that use
shared services that leverage network analytics.”
Methodology:
Accenture surveyed CTOs, network directors, COOs, EVPs/VPs of
operations, and other senior executives from 30 companies in 22
countries. Included in the survey were cable providers, wireless service
providers, integrated service providers, and wireline service providers.
All of the respondents indicated that they were decision makers or
influencers in decisions regarding their company’s network operations
strategy. The report is available at www.accenture.com/broadband-network-migration.
About Accenture
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 261,000 people serving clients
in more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world’s most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page
is www.accenture.com.
About Accenture Network Services
Accenture Network Services, an Accenture Business Service, helps service
providers streamline their operations and reduce the costs of planning,
building, and operating legacy and new networks and services. It
provides targeted solutions in four key areas – Network Engineering and
Optimization to accelerate broadband deployment; Service Fulfillment to
streamline quote-to-cash processes; Service Assurance to provide quality
customer experience and reduce time to repair; and Field Force for
enhanced workforce productivity and efficiency. By addressing each step
of the network transformation journey, Accenture Network Services helps
clients implement the right capabilities to unleash their full
potential. Its home page is www.accenture.com/network-services.