Eroding profitability

We need to dedicate fewer of our resources to our traditional and core products as their profitability erodes and be ready to compete hard against an unprecedented number of new competitors and disruptive elements. They face none of the infrastructure, cost and regulatory pressure we do.”
Phil Jordan
, Group CIO of Telefónica.

The statement above is so obvious, yet I’d only ever thought of it by implication. As certain products / services in a CSP’s catalogue show reduced opportunities for revenue growth (as a result of the law of diminishing returns), they will seek to maintain profitability via a reduction of resources / expenses. It’s implied that these resources, if retained, will be shifted onto more innovative and profitable opportunities.

So, where do the opportunities lie for your OSS?

  • Reduction of resources means a need for streamlining and automation. That’s a tick for increased smarts in your OSS and analytics.
  • Competing hard against disruptive elements. That’s also a tick for OSS via more rapid speed-to-market for new services and innovations.
  • Infrastructure, cost and regulatory pressures are a fact of life for a CSP. OSS are a means of managing these issues, but also a contributor to these issues in many cases.

All is not lost as the CSPs still hold some valuable cards, as described by Phil Jordan as, “the customer relationships, technology assets, partnerships and experience to succeed.” They also have the real-estate assets (ie duct networks, exchange sites, tower placements, wireless spectrum, etc), the implementation workforce / processes and local market knowledge (ie available for advanced analytics). Can your OSS help to leverage these assets for your customers and provide them with a protective moat from the “unprecedented number of new competitors and disruptive elements“?

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