Telcos still innovate… but more by proxy now

CSPs globally are trying to be innovative, and being heavily involved in tech since their earliest days, always perceive themselves to be innovative to their core (yes, bad pun).

There’s no doubt that there is a lot of innovation happening in large CSPs, but I wonder how much of it is really attributable to the CSP? Much of the change swirling through our organisations (or customer organisations) has been designed elsewhere. SDx (Software Defined Everything) was invented elsewhere (as were IP networks prior), IoT, CI / CD, Agile, Design Thinking, User Experience (UI/UX), AR/VR, AI/ML, open-source and all the other modern buzz-words.

Telcos do come from innovative roots when you look back at what Bell Labs, BT Research, Telstra Research Labs, or most other major telcos were doing globally in the early-mid 1900s. They defined not just telco but developed ground-breaking primary research into transistors, microwaves, satellites, lasers, communications theory, etc. Since this golden era, they’ve increasingly delegated the innovation process to suppliers. The same is true in our OSS. OSS were originally invented by telcos, but suppliers largely frame the story now.

In many recent blogs, including yesterday’s on network vs digital variants, we’ve discussed ways to invent new, more profitable revenue streams… revenue streams that will in turn fund exciting new OSS projects.

But I also wonder whether the reverse is true? If a telco was to discard the addiction to innovation and take on the utility mindset – providing ubiquitous, bullet-proof, regulated supply of long-haul and wide-spread access networks – would that be a better fit for these large, highly regulated enterprises?

They tend to have the natural moat in their networks – the cables and spectrum that require too much capital for others to easily replicate and compete, but whose physical assets have long useful lives. If they remove the constant need to constantly invest in change then their cost structures will arguably reduce more quickly than their revenues are dipping (yes, that means profitability increases). That gives the opportunity to focus on doing things simpler and better rather than doing things newer.

Have many CSPs long since lost the innovation war? Is their innovation primarily by proxy (through partners and suppliers), acquired rather than earned? Many factors work against them ever recapturing the innovative lead that they once held. So why not just admit it and let the innovators innovate, incubating partnerships rather than competing?
The answer is because that’s anathema to these organisations (and the people who drive them), which still perceive themselves to be innovators, perhaps akin to the aging Lothario with the comb-over and expanding waistline dreaming of his younger days.

Would the OSS market look much differently if CSPs were to all “age gracefully” with respect to innovation and take a different approach to the inventiveness that still surrounds them?

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