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Digital Platforms & Services

Digital Platforms & Services

Is there telco life beyond connectivity? There has to be, says the TM Forum

Ian Scales
By Ian Scales

Oct 19, 2020

© Flickr/cc-licence/Ministerio TIC Colombia

© Flickr/cc-licence/Ministerio TIC Colombia

  • It’s a question that keeps coming up.. never quite gets resolved
  • Should telcos limit their ambitions to connectivity and leave complex services to application and content providers?
  • Or does the continuing financial viability of telcos demand that they deviate from the knitting and ‘go beyond’, wading into high value services?

Existential questions are never far from the lips of telecom industry executives, and the TM Forum's ongoing Digital Transformation World Series 2020 event, which tackles ‘6 themes across 6 weeks with 200+ speakers’, has tackled a few already, including the industry's ever-ripening chestnut -- should telcos just focus on providing the best possible connectivity and become bit pipe specialists? Or should they also seek to develop and offer innovative services that make good use of that connectivity as well?

To cut to the chase... the answer is ‘both’ 

According to Joann O’Brien, the TM Forum’s VP of digital ecosystems, connectivity is rightly seen as a low margin business and is rapidly commoditising further. Digital Service Providers (DSPs), she stated during a session that kicked off the event's 'Beyond Connectivity' theme, are focused on getting their interior world right with an agile technology foundation and operating model. And they’re now looking towards effective partnerships, as they have recognised the need to change from a competitor to a partner mindset and become properly set up to make the most of the hugely expensive shift to 5G.  

Essentially, she says, the economics demand that telcos become DSPs, otherwise they simply won’t make enough money to pay for their 5G infrastructure. And this means being extremely good at the connectivity piece - in fact, even better than before - but looking to partner with others to get improved revenues from services whose delivery they share. Connectivity-as-a-service is going to be important too, but there also needs to be a shift away from a focus on nuts and bolts. 

According to Martin Creaner, a former TM Forum CEO and currently an Author and Digital Transformation expert, telcos need to shift away from selling connectivity or at least “leading with connectivity as the thing you’re selling.”

For consumers and smart home individuals, ‘connectivity’ tends to have an intrinsic value and is a valid thing to be purchasing. As you go up the scale, however, into the industry transformation realm, connectivity is only valued in so far as it is tied into the solution: “They don’t want to buy connectivity from you, they want to buy a solution,” says Creaner. 

So in a 5G world, it’s got to be about specialist solutions with partners: Connectivity expertise is hugely important, but mostly to the partners with whom you choose to ally.

Vodafone’s Principal Integration Architect, Stephen Harrop, speaks of the implications of going beyond connectivity. He says that what we now call ‘services’ won’t involve the telco alone, but will comprise a range of partners, including the telcos. One implication is that connectivity will be aggregated differently. “In future I don’t think we’re going to be selling mobile phones and airtime to millions of humans. Rather, we’ll be selling connectivity to billions of devices," says Harrop. 

He used the example of a futuristic ‘pesticide-as-a-service’ venture that might involve a plethora of services, one of which was controlling a ‘swarm’ of drones to apply the pesticides in the right quality and regularity to the right places. That service might in turn be reliant on other digital services feeding in video image analytics and even weather reports. These would be tied together by ultra-reliable and often low-latency connectivity. 

And once you enable one service like that, he says, you could see the core of the connectivity service being applied to other service combinations. 

So it’s not a question of connectivity or services - it has to be both.

Related Topics
  • Analysis & Opinion,
  • Business Models,
  • Digital Platforms & Services,
  • Global,
  • News,
  • Telco & CSP,
  • Telecoms Vendors & OEMs,
  • TM Forum

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