Report: Threat of being a ‘dumb pipe’ overrated
A report released today by Amdocs found that the threat of over-the-top Internet providers turning service providers’ broadband networks into “dumb pipes” is overstated.
The report found that service providers have several inherent advantages when they’re up against over-the-top (OTT) competition, including existing relationships with their subscribers and the ability to deploy their services across multiple platforms.
"After talking to service providers around the world, the report found that the risk of service providers becoming a 'dumb pipe' is vastly overstated," said Denis McCauley of the Economist Intelligence Unit (EIU). "This report tells us that despite the many challenges the industry faces, forward-looking service providers are finding ways to generate new revenue via new business models. Service providers' strategies are being defined and validated and are achieving results."
The EIU report outlined five strategy options for service providers to consider. The report said that the five strategies, even if adopted in isolation, could help service providers manage the challenges of the changing marketplace; but if the strategies were pursued in combination, they could help service providers reach long-term profitability.
The five strategies were:
- Smart pipe: Partnering, instead of competing with "over-the-top" players, will enable service providers to deliver a compelling customer experience for their subscribers and attract new customers.
- Efficient pipe: Greater automation of business processes will boost service providers' profitability.
- Pricing pioneer: Adoption of new pricing models that better reflect actual network usage, such as pricing models based on time-of-day usage and speed, will safeguard profitability.
- Defender of the realm: Embracing rather than resisting competing technologies such as VoIP will retain and attract customers and generate more revenue from data services.
- Transformer: Expanding into industries such as energy and health care, using cloud computing, intelligent networks and machine-to-machine communications, will generate new revenue opportunities.