In a turbulent economic climate and commoditized industry, primarily driven by price erosion, many are wondering how wholesale providers can reinvent themselves to sustain their value and increase their margins. Several industries went through a similar challenge and while none predicted a possible turn-around, smart innovators managed to make seismic shifts, enabling them to redefine the market and, at the same time, catapult themselves into a leading position. An example can be seen with Apple's release of the iPod and iPhone, or when telecom companies began to offer Next Generation VPN services in replacement of legacy frame relay and ATM links.
The primary issues in the telco industry are the time and cost associated with bringing innovations to market. Rolling out communication services takes years. It requires months of planning to stay ahead of the curve. But how complex is it to bring to market the breakthroughs that would redefine the space? We all know that the path of discovering differentiated features, capable of defining tomorrow's winner, begins with listening to customers. By working closely with MNOs' customers, we've become aware of their frustration with managing Ethernet-based backhaul networks because they lack the visibility required to offer high QoE to their subscribers. When MNOs lease Ethernet Backhaul, the traditional VPN reports that were designed for large enterprises are not sufficient, as MNOs require a deeper understanding of the performance of their backhaul in real-time and in the relation to their adjacent networks. Because MNOs are feeling blind in this regard, there is a clear opportunity for wholesale providers to differentiate themselves in the marketplace based on more than just price.
Wholesale providers are coming to realize that by packaging innovative service quality visualization into their existing products, they can differentiate themselves from competitors, resulting in a leading market position. But the question is: who will be the first to seize this opportunity and market those capabilities? To learn more about this passionate topic, look for my interview with Ari Banerjee, senior analyst of Heavy Reading, later this week.