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A high score on ‘Connectivity 2.0’ will hinge on choices

In a world where the availability and free flow of information stimulates productivity, growth and economic prosperity, Canada is remarkably well poised to benefit from the global rush to connectivity...


November 1, 2008  


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In a world where the availability and free flow of information stimulates productivity, growth and economic prosperity, Canada is remarkably well poised to benefit from the global rush to connectivity.

Yet seizing the opportunity will require that Communications Service Providers (CSPs) make some strategic choices.

Canada’s opportunity is supported by two recent indicators: one is Canada’s strong performance on the Connectivity Scorecard, a global ranking of nations based on their use of Information and Communications Technology (ICT) for social and economic progress. The second is Industry Canada’s recent and very successful spectrum auction. Both indicate that there is demand for business innovation, and particularly ‘services’ innovation in the near future, yet there is also a call for focus.

The Connectivity Scorecard, architected by Dr. Leonard Waverman, professor of economics at the London Business School and Dean at Haskayne School of Business at the University of Calgary, analyzes the extent to which governments, businesses and consumers leverage ICT for economic and social benefit.

Canada ranked fourth in the world, trailing only the United States, Sweden and Japan. But the Canadian score tells us there are still significant gaps in the use of ICT compared to best practice nations, especially as it relates to mobile and 3G penetration, next-generation broadband deployment, and consumer usage and skills.

In essence, this means that we have the opportunity to do a lot more, to realize the true potential of Connectivity and move to Connectivity 2.0 where broadband has no boundaries or limitations.

The recent Industry Canada auction of 282 licenses for an additional 105 megahertz of wireless spectrum to existing Communication Service Providers (CSPs), as well as new players such as Videotron, indicates that Canada is on its way to improving connectivity based on an increase in spectrum and potential subscribers.

For CSPs though, the solution is not as simple as acquiring more spectrum to introduce more services and adding more subscribers. To fully exploit the connectivity opportunity, they must transform themselves through technology and business process innovation to better identify the right opportunities, create the right offerings, and all the while keep pace with very aggressive competitors.

Of course, all of this must be done while ensuring that existing services are improved and supply is uninterrupted, so that existing customers remain satisfied.

After all, the industry also needs to recoup at least the $4.3 billion payment it has committed to the federal government just for the spectrum.

In a nutshell, the key challenge for CSPs will be to step back and evaluate their strategic business priorities.

On one hand, having a sound reliable network to meet the ever increasing demand for fixed broadband and high speed wireless connectivity for existing users, and address the connectivity needs of new geographic areas — including remote and rural locations — is critical.

For this to occur, operators need a convergent and scalable architecture that can support a multitude of bandwidth-hungry Internet applications and data gobbling powerful devices, while handling the exponential growth in traffic.

Leveraging global standards, such as WCDMA/HSPA, is a way Canadian operators can ensure they tap the cost savings of global production and scale as the world evolves to the next generation technologies.

They also need to give 24X7 attention to that network, to ensure that it is always on, and always connected. Managing a core infrastructure for a relentless, smooth and efficient operation however, is an intensive task.

It needs expert attention and relies on constant technological improvement and investment. Like any other service offering, it is dependent on specialized and sometimes expensive people capabilities, innovative technical skills and clear performance indicators.

On the other, there is the need for innovative ideas, business models, and strategies to win more customers, and greater market share. With increased competition, CSPs are under incredible pressure to move quickly.

There are new markets they need to think of, new offerings they need to design, and new partnerships that they need to strike.

These competing pressures leave CSPs with two strategic approaches. They make an upfront investment and scale up internally to ensure they have the requisite resources to effectively tackle each requirement. Or, they can adopt a more measured approach — partner with experts, and rely on them for some important strategic levers, while they retain precious internal resources to focus on what’s most important to them.

At Nokia Siemens Networks we believe that a more strategic collaboration leveraging a managed services model can convert infrastructure into a tool for growth and productivity rather than drain on capital that endlessly absorbs management time and attention.

Managed services partners can bring to the CSP many advantages including improved process excellence, reduction in operational expenditure, and higher usability and serviceability of the network.

Managed services partners can also help a CSP move their own resources toward the ‘important’ over the ‘urgent.’ While CSPs focus on important business issues such as responding to competition by developing innovative revenue streams and managing their bottom line, the managed services partner can focus on the more fundamental yet replicable needs, such as keeping ensuring uninterrupted service supply to their customers.

Needless to say this option of ‘renting’ vs. ‘buying’ also helps CSPs realize huge cost savings.

The benefits of managed services have caught the attention of communication service providers worldwide, and the concept is being adopted globally. Various CSPs in markets such as Asia Pacific, Latin America, the Middle East & Africa, North East Europe and West South Europe have already opted for managed services for the end-to-end management of their communication infrastructure.

For Canada, during this phase of immense opportunity, characterized by increasing telecom penetration and rising consumer demand for new data-intensive applications, the benefits of managed services are just as real.

Converting these opportunities into success, however, can only happen if communication service providers stay focused on customer needs, and transform their businesses to address those needs.

Sue Spradley is president of Nokia Siemens Networks, North America.