With rapidly changing ICT delivery paradigms, we are entering the era of everything-as-a-service. Though well positioned, telecom service providers are yet to really leverage their existing engagements with the consumers for the delivery of a diverse set of services beyond mere connectivity. This is not to discount some directed progress that they have made nevertheless. For example, it's been for quite some time that the telecom service providers have been delivering telephony and the internet broadband access over the same pipe, such as a DSL link. Now, with the same pipe being used to deliver IPTV services as well, the promise of triple-play is coming true. (While IPTV had been launched a few years ago, it is only now that the quality of experience is coming to an acceptable level).
Likewise, the promise of a wider wireless pipe in 3G means that richer media services like video calling, wireless broadband, and mobile TV could be satisfactorily picked up by cross sections of consumers. Telcos will need to know their subscribers better to be able to reach out to them with a bouquet of newer ICT and content-related services. That understanding would come through extensive use of tools such as business intelligence and analytics built into their IT systems.
ICT is today at a stage where the emerging 'cloud' paradigm presents an opportunity, both for the consumers and the service providers. By partnering with various other stakeholders in the ecosystem, telcos would need to position themselves as first touch points for their various requirements. Cloud is an effective delivery model for catering to the needs of a long tail, as has been amply exemplified by the success of the internet companies. The telecom subscribers in India also form a long tail of consumers, given that most of them come from the middle and bottom of the socioeconomic pyramid.
True, bandwidth and spectrum will continue to play a fundamental role in enabling access for the long tail and so a ramp-up on that front cannot be overlooked. But the higher value for the consumer lies in the services that are enabled by the underlying bandwidth and not the bandwidth itself.
The Cloud Orchestration Opportunity
There would be new opportunities for the more progressive telcos to offer cloud orchestration services, as cloud service providers, for the enterprises. As we migrate to a cloud environment, the cloud service buyers will have to manage a larger number of cloud services and vendors, adding a level of management difficulty for them. Thus, end-to-end service management across this hybrid environment becomes a vital opportunity for telcos and others, as cloud service providers.
Cross-industry M&As
M&As leading to a consolidation in the telecom industry is a possibility, yes, but M&As spanning the telecom adjacencies are also a likelihood. For large telcos, subscriber addition, especially at the lower-end of the socioeconomic pyramid, is a priority of the bygone era. Instead, they would need to focus on adjacencies like cloud and MS, and in this light they would be more keen on cross-industry M&As.
As of now, they risk losing the natural cloud service provider advantage to SIs as the later is moving faster to gain the early mover advantages. This could also lead to telco-SI M&A activities for a more wholesome cloud play.
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