The digital disruption of telecom equipment providers

October 2017

Following a wave of consolidation, the Telecom equipment providers and vendors are now affected by digital disruption as:

The demand for data is increasing, due to VoIP, IM, and content such as video, music and social media
The usage of mobile broadband and LTE is increasing around the world, notably in emerging markets
Hardware is being standardized (COTS), and networks are turning software-dominant, cloud-based and service-led
Operators are shifting from PSTN to Next-Generation Network
There is a trend of fixed-mobile convergence

Thus, a decline in market share, sales and margin is now threatening the incumbents:

Software Vendors and System Integrators are competing in software and virtualization
Google is offering a platform with NFV, SDN, and Cloud services
The adoption of open source (such as the Facebook projects TIP and OCP) could reconfigure the telco infrastructure business model
Due to consolidation and pressure on their Capex and Opex, operators are bargaining for lower prices

Therefore, incumbents must:

Offering

Invest in the latest technologies in order to make the network of their clients more efficient and flexible
Complement their hardware offering with software services, including Edge computing, network slicing, RAN virtualization
Assist operators in their 4G capacity upgrades, IoT expansion, and initial 5G rollout

Business model

Adapt their go-to-market approach to the enterprise sector, and establish partnerships with other industry players
Adjust their business model to Anything as a Service (XaaS)
Improve customer experience, and provide enterprises with vertical applications and data analytics, as well as end-to-end solutions

Operations