Telco appears to be an increasingly tough industry. Demand for connectivity continues to soar, yet profitability and differentiation are becoming ever more difficult to achieve. The traditional telco playbook – built on infrastructure, scale, and one-size-fits-all services – is collapsing under the weight of commoditisation and digital disruption.
Telco services have never been more essential, but telco business models have never been more broken.
What if the 7-layer OSI model, long considered the backbone of network thinking, overlooked the one crucial eighth networking layer that could define the telco industry’s future? In a post-GenAI world where sales and SEO are losing their edge, it’s time to rethink telcos’ role – not just as carriers, but as catalysts.
The go-to-market (GTM) strategies that sustained telcos for decades are no longer delivering.
In the distant past, when plain old telephony (POTS) ruled, telcos owned the first 7 layers of the OSI networking stack. However, the advent of the Internet and digital transformation (of everything) democratised layers 4 to 7. Rather than telcos providing the entire value-stack of communications, they were now limited to only the bottom 3 layers carrying bits, frames and packets. The customer perception of value, and share of wallet, resides in the upper layers. It’s the application layer that allows us to communicate, purchase, be entertained and everything else online.
But this is just taking the consumer (B2C) viewpoint.
Let’s now take the business (B2B) perspective of the OSI stack as a value creator. The main value-add of comms tech for enterprises is:
However, the post-GenAI world is seeing rapid change in these value-add factors, especially lead-gen. As we recently described, the same two biggest customer acquisition techniques for OSS/BSS vendors are also deteriorating for many other enterprises too (ie the enterprise subscribers to telco services).
By those two factors, we mean cold outreach (sales) and SEO (search engine optimisation) are declining rapidly in their ability to acquire new customers.
With so much valuable information available online, cold sales outreach is increasingly ignored by prospective customers. Meanwhile, SEO (search engine optimisation) and digital content are also losing their relevance as people are increasingly bypassing the search engines (and therefore SEO as a mechanism) and searching GenAI for answers. Despite traffic and data volumes rising, revenue per user is flatlining or falling.
This presents an important opportunity for telcos that we’ll come back to shortly.
In the meantime, Telcos face a conundrum: they operate critical infrastructure in a world more reliant on connectivity than ever before, yet they struggle to monetise that relevance in new and meaningful ways because they only “own” the bottom 3 layers of OSI. To escape this trap, telcos need a different kind of value proposition – one rooted not in bits / frames / packets, but in something with greater perceived value.
For decades, the OSI model has guided how networks are built, operated, and evolved. But its focus has always been on technical enablement – how data flows from point A to point B. What it misses is how value flows between people, businesses, and ecosystems.
Layer 8, in this new context, represents the business networking layer – a conceptual extension of the OSI stack that focuses not on technology networks, but on human networks (company / people connections and referrals). This is where telcos have the potential to create extraordinary value – by helping their subscribers find new clients, partners, supply chains and collaborators. The technical connectivity of OSI7 remains the underlyiing foundation, but human and business-to-business connection is the goal of OSI8. In the business networking layer, the payload is those referrals, connections and/or opportunities rather than bits and packets.
To embrace Layer 8, telcos must reposition themselves as business enablers. This means facilitating relationships that lead to commerce, innovation, and mutual growth. In a world drowning in digital noise, relevance and trust are the new currency – and telcos are well-positioned to deliver both.
Imagine a network that doesn’t just carry data, but helps your business grow. A network that knows your business needs, understands your market, and introduces you to the right partners and clients at the right time. This is no longer science fiction – it’s a logical evolution of the assets telcos already possess. And it offers something powerful: stickiness. A customer might easily churn from a service provider of bits / frames / packets, but they won’t abandon the platform that delivers them new clients.
Two of the most important metrics to telcos, churn and net promoter score (NPS), are stickiness factors and are enhanced significantly by adding greater perceived value to customers.
I’ve only attended one BNI (Business Network International) event. Its local focus wasn’t relevant to the global, niche play of PAOSS. However, we have instilled many of the principles of the BNI playbook into our business model. That is, understanding the importance of being a connector of OSS/BSS companies the world over, and of creating value for others first before receiving value in return. These concepts have been important for PAOSS, whilst BNI has also proven that structured, trust-based networking creates real commercial value. Members refer one another, share leads, and build reciprocal relationships that drive growth.
Whilst BNI has grown to over 300,000 members in 75+ countries, it is limited by its human scale – weekly meetings, local chapters and manual processes. However, the one-on-one, human scale is also a really important element of its success.
Telcos have the infrastructure and subscriber reach to personalise and scale this model. By embedding referral logic, discovery engines, conversational AI tools and interest-based profiling into their platforms, telcos can create automated, trust-driven networks that help subscribers solve their immediate problems and help grow their businesses. Like BNI, subscriber-based events are also scalable, whilst allowing personal connections to thrive. This is an important paradigm shift – it transforms the telco from being a passive service layer to an active business partner and enabler for their subscriber-base.
Here’s the most interesting aspect of this paradigm shift. Telcos don’t need to build entirely new platforms to deliver this value. The systems a telco already relies on – OSS and BSS – are well-positioned to support the transition. Rather than just providing an internal service (ie the business operations of the telco), they also reach through to provide value to the telco’s subscribers. These platforms already manage users, services, entitlements and billing. With the right extensions, they can also manage relationships, awareness, reputation and perhaps more importantly, referrals and deals.
Imagine enriching subscriber profiles with metadata about business type, intent, interests, and industry. Add algorithms that match businesses based on complementary needs, geographic proximity, or growth stage. Expand on these insight-generation engines further to help answer questions that relate to a subscriber’s biggest bottlenecks in their business today.
In fact, it doesn’t seem much of a stretch for the OSS/BSS to introduce incentives for successful referrals or closed deals as tracked metrics. Whilst the biggest value-add for the telco is churn reduction and created value finding its way back to the telco, whereby the value is tracked through the billing engine – with the potential to not just charge for connectivity, but for commercial outcomes.
By turning OSS/BSS into the core of a business networking engine, telcos can deliver a new class of value-added service. One that builds customer loyalty, opens new revenue streams and creates a powerful moat around the network / organisation itself.
The OSI model may have stopped at seven layers, the technical parts of the network, but the true network created by telecommunications goes much further. Word-of-mouth and relationships have always driven business and are seemingly immune to any platform, method or technology changes (eg like we’re currently seeing with cold-sales and SEO techniques). Telcos might just have a once-in-a-generation opportunity to redefine their role. Layer 8 isn’t about more bandwidth – it’s about better business. But it also requires telcos (and OSS/BSS suppliers) to be outward-facing, not inward-facing – to focus on the needs of customers as a business, not just a bitstream.
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