Service provider executives surveyed by Metaswitch Networks say uncertainty about new services and revenues, plus competition, remain the top concerns over the next decade. That has been true for most of the past decade, and the survey results confirm that the search for new revenue sources and the pressure of competition remain dominant facts of life in competitive and changing marketplaces.
The significant new difference is that telecom regulators—and what they might do—now are among the top three concerns. Of the three top concerns, though, only service innovation and the organizational response to competition are under direct control. See http://www.carrierevolution.com/articles/74971/what-keeps-service-provider-executives-awake-at-ni/.
About 34 percent of survey respondents indicated regulators were the single biggest threat they face, but competition from other cable companies or telcos also were at the top of respondent lists. And in a sign of where new threats are perceived,Google (News - Alert) is seen as a challenge as big as competition from “other telcos,” the survey of 165 companies found.
About 27 percent of respondents indicated cable companies were the single biggest threat. Some 20 percent of respondents indicated “other telcos” were the second-biggest threat.
But Google is not far behind cable or telco competition as a perceived threat for all contestants, the Metaswitch survey of service provider executives found. Some 17 percent of respondents said Google posed the single greatest threat to business success over the next decade.
Apple and Microsoft (News - Alert) are viewed as the least threatening of seven potential sources of competition, while Skype and other telcos are seen as mid-level threats.
The sobering findings indicate that executives now correctly understand that regulatory risk must be added to the list of top commercial risks for the next decade, even though the search for new revenues, the business models that underlie new services, and staying abreast of competitors remain top issues.
New service creation, especially uncertainty about potential demand, was cited as a huge issue. Some 45 percent of respondents indicated such uncertainty was the greatest of five challenges they face, vastly greater than ability to innovate, regulatory impact, risk of technology failure or brand exposure.
The second-greatest barrier is innovation skill, followed very closely—nearly identically—by regulatory impact. It is worth noting that demand uncertainty was deemed more than twice as big an obstacle as innovation ability or regulatory uncertainty.
On a five-point scale where “1” is the most significant danger, technology failure got a 2.87 average score, while regulatory impact got a 3.02 score. Demand uncertainty got a 1.95 score.
Risks that company brands could suffer, and innovation prowess, were issues of lesser concern to respondents.
The clear implication is that obstacles can be overcome if customer demand is known. However, respondents suggested that technology failure was the single most worrisome issue, once demand is understood.
Everyone might agree that innovation is a huge issue over the next decade, for firms in virtually every part of the business ecosystem. Business model, service and organizational innovation are on the list of subjects studied by Metaswitch. But one issue vastly outweighs the others.
Fully 71 percent of respondents indicated that business model innovation, including new revenue models, delivery and production models, were the top concern. By way of comparison, just 18 percent consider service innovation (marketing and partnerships) the top issue, while just 10 percent believe organizational innovation (people and structure) is the most-important issue.
Business risk from competition and the need to discover new revenue models and services are key concerns of executives running today’s communications businesses. But regulation also is among the biggest risks executives say will affect them most over the next decade, the Metaswitch survey finds.
Overall, it is uncertainty itself which seems to dominate executive thinking about their challenges over the next 10 years. Service providers seem confident of their ability to execute, to handle technology changes and protect good brand images.
But the unsettled and unproven customer demand for particular new services, and the creation of viable revenue models to serve that demand, while ensuring that competitors do not get ahead, are the issues that executives seem most concerned with.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Marisa Torrieri
