Network operators can no longer remain status quo - they must innovate to keep pace with user expectations for services and quality.  So what are the key areas for them to consider?

Fortunately Alcatel-Lucent (News - Alert) has put together a highly useful study on this topic. As it says, "network service providers dealing with massive bandwidth demand are struggling to evolve their networks while keeping costs under control."

The paper finds that arriving at "cost-effective, customer-oriented" answers demands a change of perspective - "away from traditional operational preoccupations toward a view guided by financial and strategic business considerations."

The study then does a good job unpacking that insight, noting that, among other strategies, "expenditures must be reduced and revenue per transported bit increased."

To help tackle such approaches, Alcatel-Lucent, which officials say has drawn on its experience in network design, deployment, operation and migration, has developed "a cost-transformation model to help service providers understand the new economics of their businesses and derive the greatest value from their networks."

The study notes that a key issue is that connectivity no longer has the intrinsic value it once did: "Customers demand added value, and they're getting it. Crossover competitors such as Google (News - Alert), Yahoo! and MSN have been quick to take advantage of media convergence and non-traditional business models to devour an increasing market share."

What this means is that incumbent service providers "need to provide the value their customers are seeking - namely, a rich communications experience." Yet doing so, as we don't have to tell service providers, demands focused attention, attention that service providers, preoccupied with day-to-day management of their networks, can find hard to bring to bear.

Alcatel-Lucent's approach to cost transformation is described by company officials as "measured and meticulous, grounded in solid information and years of expertise." The company takes the approach of working with customers to identify growth and cost-reduction opportunities, using "a broad set of skills and professional service capabilities to manage projects across all technologies and business lines, merging the domains of IT and networking."

As partner to providers around the world, Alcatel-Lucent officials say, they have the knowledge base to ensure "all considerations are included, strategic, operational and technological alike."