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Efficiency for Telecom carriers: Separation between network infrastructure and provision of services

By Nae — January 25, 2020

The transformation of consumption profiles has led carriers to understand that sharing their networks can be effective in the improvement of operational efficiency

Since the beginning of telecommunications operations, regardless of the services provided, it is worth noting that one feature has never changed: the carrier remains the owner of its infrastructure (buildings, cable networks, control and transmission centers, satellites, antennas, towers, etc.). With this, the model developed was always that of a company that bought, implemented, operated and maintained its infrastructure and, in addition, met the needs of the market by selling and offering its product.

This structure worked well until the emergence of OTTs (over-the-top), when companies began to offer their products to the market without having their own infrastructure and, often, outsourcing some business initiatives. This caused the market to be inundated with offers of music, entertainment, news and, more recently, movies.

With the emergence of new consumption patterns, carriers, in addition to not generating revenue for infrastructure owners, have also handicapped more traditional products in the industry, such as pay TV, which has been losing ground year after year since the consolidation of the video streaming model adopted by many users worldwide.

A few years ago, some competing companies began discussing the possibility of sharing part of their infrastructure, such as towers, antennas and even some mobile cellular access systems. These organizations noticed that this not only had no effect on their marketing strategies, it also made them healthier in terms of operating margin. These companies were able to focus more on where strategies could be differentiated, which is in service and generating business value.

Today, we are experiencing an evolution in this scenario, in which not only is infrastructure shared between several companies, but it is also possible to create a company solely responsible for investments and operation of the infrastructure. In this way, they offer the service to other companies, which effectively offer products to the end customers, for telecommunications and content.

This model seems to make sense and has been accepted by the market, since it allow for clear and different focuses in each operation. One one hand, there is the infrastructure company, which seeks to maximize its efficiency, acceleration in implementation and excellence in maintenance through automated smart processes. On the other hand is the commercial company, which now competes with OTTs, equipped with important distinctions, through its knowledge of the market, robust CRM (Customer Relationship Management) systems and in-depth knowledge of the preferences of its market.

In this new scenario, companies do not bear the cost and weight of the investments required for this offer. They are left with a flexible, lightweight model, much better prepared for this time of rapid changes and shift in the consumption profile, in both technology and new business models.

 

Eduardo Rabboni
eduardo.rabboni@nae.global

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