In vs. Over: Where Service Providers need to create value next

Conversations with leading service providers reveal common themes.

• How do we increase margins  at a time when lower yield UC services are an increasing part of our overall sales?
• How do we deliver value from heavy infrastructure investments like 5G?
• How do we differentiate our services and create new sources of value?

Answering these questions often started with new offerings running over the top of the network. Could we offer streaming services? Could we sell applications? Could we bundle tangential services – like contact centre software?

The answers to these questions lead to a new set of issues. Costs and complexity of sales and marketing increased. Margin was small and elusive. Service and maintenance costs escalated as the Service Provider often became the first point of contact for issues related to third-party services. And, because often what was offered elsewhere, differentiation was weak.

The net result was more money was made by those running on the network, with value accruing to them and not the Service Provider – and the Service Provider incurred the costs of running the network.

“There is probably no other industry that has contributed more in the last 25 years to the welfare and productivity and expansion of economies as the telecom sector. … And you are right. We have not been able to capture a significant part of the new value chain.

… Today roughly 56 per cent of the capacity of the network—of the European networks in this case—is being used by only five over-the-top [OTT] players that pay nothing for the use of the network.”

José María Álvarez-Pallete López ,chairman and CEO of Telefónica S.A. and board chairman of GSMA, Mckinsey Journal, 2022

In the network is the answer.

Service Providers are increasingly scaling back non-core over-the-top service offerings, reducing cost and complexity and returning their focus to extracting the value from services in the network.

This shift in focus is increasingly centred on one of the primary reasons networks exist – conversations in all their forms: voice, video, and text. Rather than simply focusing on monetising the connection that makes the conversation possible, the question is how to turn those conversations into a source of value for the customer and Service Provider.

A new generation of network-embedded services unlocks the ability to turn conversations into data and render that data meaningful through AI, machine learning, and natural language processing.

Imagine a Cisco Webex meeting taking place and the actions automagically summarised in a branded widget exclusive to a Service Provider and their customers. Or a crucial moment in a conversation between a tradie and their client being transcribed and summarised in a text for the tradie to share with other workers on the job. How about a customer satisfaction app unique to a Service Provider summarising customer satisfaction ratings from that day’s service calls, keywords, and agent performance?

Before today, doing any of this required heavy-weight enterprise applications, complex integration and a myriad of increasingly complex services.

Today, this is possible thanks to a new generation of network native services, instantly provisioned and integrated with the Service Providers’ billing engines. The workloads and costs associated with legacy transcription services are replaced with new services concentrating on where the conversations’ value occurs. And critically, the resulting data becomes a customer magnet, reducing churn and creating a foundation on which any number of new innovative services can be created.

Unlocking the value of the network starts in the network. It is the first place to begin improving revenue, retention and innovation.

Service Provider Trends Outlook 2022.

Why Enterprises Are Looking to Switch Service Providers in 2022 – And What You Can Do to Stop It. Explore all the findings in Service Provider Trends Outlook 2022.