Since the dot-com bubble burst back in 2001, cost reduction has played a significant role in business decision making and budgeting. That trend has now become the focal point for most businesses with the current global recession, with businesses and consumers alike carefully examining their available capital and how it is spent.
While the communications space has been less impacted thus far than most other industries, it has by no means been immune. Some providers and vendors claim the economy has actually helped boost interest in their products, but even they are, at best, cautiously optimistic. Businesses, on the one hand, are forced to invest in new technology in hopes of being able to reduce communications costs by deploying IP Communications solutions. But, even they, to a large part, are only doing what it absolutely necessary.
Consumers, on the other hand, have significantly cut their spending on non-essentials, which prompted Alcatel-Lucent (News
) to invest in a market research study on consumer spending trends, particularly with respect to their broadband services. As a vendor to many of the world's largest network operators, and a key advocate of next generation communications solutions, both wireline and wireless, Alcatel-Lucent has a vested interest in helping network operators understand the behavior of their subscribers.
The key finding from the research is provides a positive outlook for broadband
service providers and their equipment vendors and application developers: broadband services are increasingly being viewed as essential services and are generally among the last services subscribers will give up. Instead, the food service, entertainment, travel, and other recreational industries are bearing the brunt of consumer spending cuts. Still, there is a fear that consumers will eventually be forced to cut some of their broadband-based service expenses, opting for lower-cost or even free alternatives to paid services.
For service providers, this means they must also look for ways to adapt accordingly, including offering more bundled packages that allow them to cut costs on the total package. The down side is that each provider then runs the risk of subscriber churn as each individual customer becomes an all or nothing sales opportunity.
Fortunately, service providers can leverage not only the technology, but also market intelligence and advisory services from companies like Alcatel-Lucent, which, thanks to its broad global reach and experience and vast product set, is in a position to help service providers and network operators navigate these turbulent times as they seek new ways to drive revenue and control costs. In order to do this, Alcatel-Lucent has adopted a three-pronged approach to educating the service provider market on ways to succeed today.
Of course, network infrastructure is a key, and an area in which Alcatel-Lucent has as much expertise as any vendor. But, as users become more and more immersed in applications and services available via the Web, it has become increasingly important for network operators to realize they must focus their efforts beyond the network infrastructure, to a more holistic view of service delivery -- application enablement.
is an approach to the service delivery framework that allows providers to create new value propositions through increased management and control over their facilities, driving new business models and improving ROI.
First and foremost, the application enablement vision requires providers to evolve their networks to converged, all-IP infrastructures, which will allow them the agility, flexibility, and scalability to drive new services and applications to market reliably and efficiently and, perhaps most importantly today, cost-effectively. Alcatel-Lucent calls this next generation network a high leverage network, which leverages the latest broadband and optical networking technologies to transport and deliver network traffic.
Using the latest network technologies from Alcatel-Lucent, network providers are able to build and optimize their networks to seamlessly deliver more services, more reliably, with greater flexibility leveraging converged access technologies and dynamic bandwidth allocation to increase operational efficiency, lower costs, and reduce carbon footprint. Alcatel-Lucent defines a high leverage network
High bandwidth -- Scalable content and application delivery anytime, anywhere, over any access technology;
Scalable and elastic -- Dynamic resource allocation to meet provider and user requirements without increasing costs;
Reliable and resilient -- Always on environment to provide continuous service availability to all users;
-- Maximum capabilities with optimized CAPEX and reduced OPEX (News
) through improved operational efficiency leveraging technical innovation;
Eco-sustainable -- Meeting fiscal requirements while reducing the environmental impact;
Multi-service -- Enabling multiple, concurrent, customized services over a single IP architecture with dynamic service creation, delivery, and assurance;
Open and interoperable -- Leveraging open standards to lower time to market and increase ability to monetize services through the exposure of service capabilities in a managed and controlled way to enhance QoE;
Secure and private -- Securing all assets and intellectual property on the network, including personal and contextual information of end users.
The network is, of course, critical to providers' ability to deliver services. However, even as they leverage new network solutions to enhance their ability to deliver new, innovative, and increasingly contextually aware services, they are forced to explore other models in an effort to balance speed to market with efficient delivery. In short, the end user cares little about the network, which means that, while the provider must ensure reliable delivery, it doesn't necessarily have to leverage its own end-to-end infrastructure to do it.
This brings to bear a growing trend in telecom
, network outsourcing or infrastructure sharing, including the growth of the wholesale network provider market, mobile site collocation, leased line unbundling, and the increased use of hosted and managed applications. These are all part of providers' initiatives to control costs without sacrificing their ability to provide services to their subscribers. In fact, while legacy networks are still required, since the migration of all subscribers to next generation, high leverage networks will take time, they are becoming an increasing operational burden. This opens up the possibility for an entirely new business model in the future, where service providers will be just that -- service providers, focusing on customer interaction, retention, and acquisition, outsourcing the delivery infrastructure management to third parties
via a hosted network model, partially or in whole.
Network infrastructure will still remain central to the overall communications infrastructure, but the market is likely to become segmented, with network operators and service providers each focusing on their individual competencies, relying on the other in a symbiotic relationship. At first glance, it may seem counterintuitive, but with both networks and services becoming increasingly complex, it becomes cost- and time-prohibitive for most providers to manage their infrastructures and service development efforts without taking on significant risk.
Of course, to support a global economic recovery, Alcatel-Lucent is helping its customers globally identify the most effective strategies for sustained growth by leveraging its own infrastructure and service delivery solutions to guide them to more optimized operations to deliver personalized converged services. That includes helping them develop triple and quad play offerings to capitalize on the trends its market research initiative uncovered.
It is also helping educate its customers on eco-sustainability and green technology, which help reduce costs through lower power consumption
, smaller footprints, and remote and automated maintenance. In fact, Alcatel-Lucent is the first vendor to offer a comprehensive energy management service to its customers.
In addition, its application enablement initiative helps providers realize maximum benefit from their next generation infrastructures, allowing them to deliver a wide range of new services that capitalize on the demand for real-time information, security, and seamless access from any device.
Of course, in the U.S., it is also focusing on helping its customers take advantage of the Broadband Stimulus
provision of the American Recovery and Reinvestment Act of 2009
(ARRA), by not only offering consultative services, but providing the end-to-end solutions to help service providers build or upgrade their networks and service offerings. Access to proven technology will increase providers' chances of being awarded funding for their proposed projects – new information regarding the second round of funding applications is expected to be made available early in 2010.
The longer term benefit of working with a vendor like Alcatel-Lucent is that, while the Broadband Stimulus provides funding for initial buildout or enhancement of network infrastructures, it does not fund ongoing OPEX. Alcatel-Lucent's portfolio, though, is designed to minimize operational costs, making it a valued partner for the initial push for funding while offering a viable long-term solution.
For service providers and network operators globally, Alcatel-Lucent is committed to providing network and service delivery solutions that will help them migrate to all-IP infrastructures to help them overcome the current economy and provide the reliability and scalability for sustainable growth once the economy recovers.
Erik Linask (News - Alert) is Group Editorial Director of TMC, which brings news and compelling feature articles, podcasts, and videos to 2,000,000 visitors each month. To see more of his articles, please visit his columnist page.
Edited by Erik Linask