Editor's Note: This year on SearchTelecom.com, we will be featuring guest columns from the TM Forum, the communications industry consortium that concentrates on improving business effectiveness, or, Operations Support System and Business Support Systems for service providers. The Forum works with its communications and media industry members to provide solutions and guidance to transform the way digital services are created, delivered and charged. In the coming months, TM Forum executives will offer their opinions on how the industry can reduce the costs and risks associated with creating and delivering profitable services.
2009: A telecom odyssey
Let's face it, the party is over. The world's financial markets are experiencing the worst turmoil since the Great Depression of the 1930s, and the ripple effect across other industries is hitting hard in every sector from manufacturing and automotive to real estate, and yes, even telecommunications. The world may be in a recession, but there's more than a glimmer of hope that telecom will make it through the tough times ahead.
This is a far cry from just a year ago, when the motto of the telecom industry was -- to borrow a phrase from newly elected U.S. President Barack Obama -- "yes we can!" This mantra marked the first half of 2008, when service providers of all stripes were saying yes to everything from ad-driven services and a complex value chain to offering a full range of multimedia, IPTV, mobile TV and online gaming services across the world.
But we found that as we crossed the halfway mark of 2008, more and more the carriers were beginning to push back from this gung-ho attitude to a much more reserved, conservative one. Still, 2008 will go down as an interesting and eventful year for telecom.
2008 technology and trends
We saw a lot of different technologies emerging in 2008. We saw the rise of cloud computing, which goes along with the emerging interest in the area of centralized computing, as opposed to distributed computing, which we've been doing for a while.
Apart from that, we're also seeing a lot of hype surrounding Long Term Evolution (LTE), a fourth-generation wireless technology that's really starting to capture people's imagination in the mobile space. I would say that 2008 was the year LTE really started being taken seriously.
You tend to find something like LTE raising its profile when the previous technology it is meant to supplant -- in this case 3G -- has become passé. In 1999, 3G was supposed to be the next huge thing, but of course that didn't happen until recently. But now that 3G has really matured across the world, everyone is looking forward to the next big thing.
Given the economic state we're in, though, LTE and other new technologies may well be delayed into 2009 because providers will retrench, slow their investments and hope their strategies will pay off.
Telecom survival strategies
While the U.S. automakers and banks around the world look at their balance sheets with equal parts shock and awe, I truly believe we'll be telling a different story on the telecom side.
President and CTO
There's no doubt we're only on the cusp of very difficult times ahead. Right now, we're hearing about the recession, talking about the recession and starting to see only the beginnings of the full effects of the recession.
Things are going to get far worse before they get any better. But while the U.S. automakers and banks around the world look at their balance sheets with equal parts shock and awe, I truly believe we'll be telling a different story on the telecom side.
One of the key reasons telecom will survive is that communications services over the past few decades have become as important to most consumers as electricity. And with flat-rate plans dominating the scene, the idea of established telecoms losing tons of business is simply not realistic.
If you go back to recessions of 20 or 30 years ago, people may have made fewer phone calls in order to save money. Now, usage doesn't even matter in today's world of all-you-can-eat voice and data.
Either consumers will disconnect their service entirely, or they will find a way to scratch together enough to cover their bills. There's just no linear relationship between the recession and telecom revenues, so I imagine we'll see telecom revenues holding up disproportionately well compared with other industries.
Stick to the transformation program
But communications services providers can't just rest on their laurels and wait for the cash to flow into their coffers. If they have started transformation projects, they need to stay the course and realize their goals of reducing costs, looking for new business opportunities and improving the customer experience.
Over the next 12 months, every provider has to remain focused on those objectives and execute its technology and business strategies brilliantly or risk being just another company that couldn't make it through the recession.
But staying the course with transformation projects, cutting out the fat and once again treating the customer as king will help lay the roadwork to keep providers on the path to success.
About the author: Martin Creaner is the president and chief technical officer of the TM Forum and has worked in the communications industry for the last 18 years. Creaner held a number of executive positions with BT and with Motorola, where he led the 2.5G and 3G OSS solutions development activities. He sits on the board of a number of telecom companies and is the chairman of Selatra Ltd.