Future Scenario Planning: The “Open Tech Frontiers” Scenario (part 4)

We’ve embarked on a journey of trying to plan for the future of OSS/BSS, not by predicting the future, but by seeking ways to be ready for possible future situations by using Peter Schwartz’s scenario planning technique.

Using this technique, we’ve identified four possible future scenarios for telco based on two high-impact variables (tech growth and regulatory control) as well as high-impact certainties (geopolitical influence and climate change pressures).

The next step is to now drill down into how these scenarios could impact telco business models and changes to the OSS/BSS industry in turn.

In today’s article, we take a closer look at #2 – Open Tech Frontiers:

We’ll start with a recap of the features of this scenario:

1. The market operates with minimal regulatory intervention, allowing for unfettered innovation and competition. This hands-off approach, combined with rapid technological advancement, encourages a proliferation of new entrants and disruptive business models, drastically changing the telco landscape
2. Segregated global markets lead to “innovation islands” where certain regions advance rapidly, leveraging local supplier networks and home-grown technologies due to restrictions on global trade
3. Telcos would aggressively invest in new technologies and business models, focusing on innovation and rapid market penetration to leverage first-mover advantages
4. Rapid technological adoption includes innovations aimed at climate mitigation, such as smart energy grids managed by telecom networks and adaptive infrastructure designed for extreme weather events

Possible impacts to Telco Business Models

Under this scenario, telco business models would likely transform in response to a challenging mix of:

• Telcos would aggressively invest in new technologies and business models, focusing on innovation and rapid market penetration
• Revenue could be driven by a ‘first-mover’ advantage in emerging tech and services
• Costs may be variable, with potential savings from global trade restrictions offset by the need to innovate continuously.

If today’s telco business model was already under pressure to innovate then this “Open Tech Frontiers” scenario will only exacerbate the tension on CAPEX.  But how is the business model likely to change under this scenario:

1. Emphasis on Innovation and Speed to Market: In a rapidly changing tech estate, telcos would need to cultivate a culture of rapid innovation, focusing on the speedy deployment of new technologies and services. Due to the speed of tech innovation, opportunity arbitrage would only exist for fleeting periods. This would make it vital to have the ability to either bring novel services to market quickly (proactive) or respond to competitors that innovate before they establish a strong foothold (reactive). The ability to quickly move from concept to commercialisation (proactively or responsively) would be critical to capturing (or limiting) first-mover advantages and capturing market share from competitors
2. Diversification of Revenue Streams: Due to rapid change and short arbitrage periods, telcos may look to diversify their revenue streams beyond traditional telecommunication services. This could include new areas like IoT connectivity, cloud computing services, customer-centric services or even telecommunication companies operating their own energy grids and/or community batteries as part of smart city initiatives. It is likely that energy grids will see significant investment in the next 10 years as they need to re-profile from centralised power generation (coal, gas, nuclear plants, etc) to edge generation (wind, solar, etc) and communications to the edge and beyond will be essential. Micro-grid and/or community batteries have many other related opportunities suited to comms infrastructure operators (drop us a note if you’d like to hear more about what we’ve been working on in this space)
3. Dynamic Pricing Models: With continuous innovation, telcos will almost certainly need to adopt dynamic and flexible pricing models that reflect the rapid pace of technology development and market demand. These models could include usage-based pricing, premium pricing for cutting-edge / premium services, or subscription models for ongoing service enhancements
4. Investment in Sustainable Technologies: Depending on the importance of energy-based revenues described above, telcos could potentially invest in sustainable and adaptive infrastructure, including green data centres and energy-efficient network equipment, to align with global climate mitigation efforts. This would not only serve regulatory demands but also cater to the growing consumer preference for sustainable practices and reduce burgeoning energy costs (one of telco’s larger OPEX lines)
5. Localised Service Offerings: Due to trade restrictions and regional market segmentation, telcos could focus on hyper-localised services, tailoring their offerings to the unique demands, collaboration on local standards and regulatory environments of each innovation island. This local focus could drive up costs but also allows for bespoke solutions that could command premium pricing
6. Strategic Alliances and Partnerships: To navigate the complex landscape of segregated markets, localised strategic alliances / partnerships would become more prevalent. This potentially leads to telcos playing a key part in bringing local suppliers together to form supply chains
7. Cost Management Strategies: While first-mover advantage can drive revenues, telcos would also need sophisticated cost management strategies to offset the expanding CAPEX investments required for innovation. This could involve leveraging economies of scale, adopting lean operational methodologies, and outsourcing non-core functions to manage and align costs with revenue potentials. The delayering or structural separation discussed in the previous article would also apply here. Only the most nimble, software-centric telcos will be able to thrive in this innovation-at-speed environment, eschewing CAPEX-heavy infrastructure builds wherever possible

Re-framing OSS/BSS Design to Accommodate this Scenario

In light of the diversity of possible business model transformations under this scenario, the design of OSS and BSS would be re-framed for new operational realities and strategic directions. Here’s how these considerations might shape the future design of OSS/BSS:

1. Adaptable, Agile and Scalable Infrastructure – OSS/BSS architectures must be highly adaptable, supporting the rapid deployment of new services and the ability to quickly upscale or downscale operations in response to market demands and emerging technologies. Not only should it handle new services, but entirely new types of services (eg energy offerings, loyalty programmes, etc)
2. Real-Time Data Processing – Whilst many aspects of OSS/BSS are near-real-time today, this will need to speed up even more under this scenario. Real-time capabilities are critical for dynamic pricing models and usage-based billing, as well as adjusting to changing data baselines. As networks / service / data baselines change, this will impact any operational tools that rely on AI/ML algorithms with large training models. These next-generation OSS/BSS will need to ensure that telcos can adjust offers and operations models / algos instantaneously to respond to changing market and network conditions
3. Enhanced Integration – OSS/BSS should be designed for enhanced integration, seamlessly interfacing with diverse systems from innovative technology partners, local suppliers and supply-chain partners to support the collaboration required in segmented markets
4. Customer-Centric Services – OSS/BSS platforms need to pivot towards customer-centric services, supporting personalisation, customer engagement and experience management to differentiate telcos in this adaptive, competitive landscape. Note that the previous sentence should be read in terms of B2B services, not just B2C services. Not only should the telco be customer-centric in this environment, but it has the potential to be the conduit to helping their clients thrive by connecting enterprise customers. Buyer/telco relationships and trust become increasingly important if constant change abounds, otherwise the telco will be chasing diminishing returns on commodity offerings
5. Support for Diversified Services – next-gen solutions must accommodate a broader range of services than today’s traditional connectivity offerings. These may include IoT, energy management, e-business, supply-chain and many others that haven’t even been envisaged yet. Many of these services are likely to be delivered for machine-to-machine consumption, so API management will be fundamental, as will frameworks that allow any service or data-stream to be easily published as an API (with related contracts, collateral, etc)
6. Energy and Cost-Efficiency – OSS/BSS solutions must embody energy and cost-efficiency across all dimensions. Not just in their operation – their ability to optimise their networks, services and algorithms for energy minimisation and net-zero objectives – but also to accommodate decarbonisation methods as a service, whether in the form of carbon credits, green energy grids, positive energy usage incentivisation, and much more
7. Enhanced Customer Insights – OSS/BSS should harness advanced analytics and AI to provide deep insights into customer behaviour, network performance, and service usage patterns at rapid speed. Telcos will need to learn from hyperscalers how important data is for informing strategic decisions and innovation initiatives at speed
8. Infrastructure Light Models (aligned with structural separation) – A reduced reliance on CAPEX-intensive builds and transitioning towards software-centric networks will be essential, both from a cost perspective, but also from the perspective of speed-to-market. The trend towards leveraging cloud infrastructure and virtualised network functions is already well underway, but OSS/BSS solutions that aren’t able to leverage these technologies will be left behind under this scenario
9. Exponential Technologies –  As described in the previous article / scenario, under this scenario where technology proliferates without regulatory constraints, we’re likely to see a rapid impact of exponential technologies (eg AI, Augmented Reality, quantum computing, etc). Each one of these technologies has the potential to impact OSS/BSS (eg immersive presentation of telco data by AR, design of OSS/BSS user interfaces that leverage generative AI, etc), but also impact the networks managed by OSS/BSS (eg immersive data generation has large bandwidth requirements, but also potentially needs low-latencies offered by edge compute). Perhaps the more stark aspect of exponential technologies is that legacy enterprises (telcos, OSS/BSS suppliers) may be unable to build necessary / critical capabilities and will be usurped by exponential start-ups, changing the markets into which we operate

What do you think? What considerations did we miss from this scenario (and we’re in no doubt that we missed lots of possible considerations)? Leave us a comment below with the ideas you have that would enrich this second scenario of four.