How Telcos Can Put Their Money Where Their Customers Are

How Telcos Can Put Their Money Where Their Customers Are

          
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How Telcos Can Put Their Money Where Their Customers Are

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  • For years, network operators—both fixed and mobile—have embraced a technology-driven, one-size-fits-all approach to upgrades. The idea: boost speed, boost capacity, boost them everywhere. It’s an approach that has worked well for telcos and their customers—until now.

    The problem is the soaring demand for data. In the past, the key to large-scale national rollouts was telcos’ ability to squeeze better performance out of their infrastructure without making outsize investments or significantly raising prices. They did this by exploiting a series of technical improvements. Instead of adding expensive base stations, they could add new electronics to the stations they already had. Instead of deploying costly fiber, they could increase bandwidth over existing copper wires. But these technological “boosts” no longer suffice. Global mobile data traffic increased 74% in 2015, according to Cisco, and is expected to grow eight times more by the end of the decade. Fixed traffic is on the rise, too. Meeting demand everywhere for everyone will require more base stations, more fiber, more everything.

    That’s a scenario telcos need to avoid, since it would require them to spend too much—and charge too much. The good news is, they can.

    This time, six principles hold the key. All of them require telcos to look at their customers, their network assets, and even themselves in nontraditional ways. They ask telcos to make tough choices as well: to focus on some customers and regions more than on others and to know when to opt for the latest technology and when not to. But these principles also address the very real—and increasingly problematic—limitations of the traditional approach to network rollouts. (See Exhibit 1.)

    exhibit

    While each of these principles can bring results, telcos will see the biggest benefits only by implementing them in tandem. Until recently, that would have been an onerous if not an impossible task. But advances in data modeling have eased the burden dramatically. Also facilitating the path forward are some best practices that we’ve identified in our work with telcos across the globe.

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