07/06/10The coming era of next-generation broadband networks is bringing about the end of telecommunications operators’ traditional deployment model. A number of changes will require innovative responses: Consumers are demanding ever-greater bandwidth to support new applications and services. A larger variety of access network technology and rollout options, along with their substantial deployment costs, are forcing operators to make tough choices. And regulators and public policymakers are becoming more involved in setting expectations for broadband deployment, which calls on operators to take an active role in shaping regulatory policy.
Operators’ strategies for building next-generation broadband networks will have to be carefully tailored. They must take several factors into account, including their market position, the regulatory framework in each market, and customer expectations. No two companies will adopt the same approach to deploying technology; each plan must be specific to unique circumstances, and its implementation may vary even from street to street.
Ultimately, operators will need to take three steps adapt their deployment models. The transformation promises to be challenging. But inaction in the face of the major trends in the industry is not an option.
Define the Right Role: The initial stage in defining an NGA strategy is for operators to be aware of their current market position and where they can realistically aim to be in the future. All operators must perform a critical assessment of their ability to compete in various markets and determine whether it makes sense to strengthen their position—by building infrastructure on their own or with partners—or exit. Incumbent operators, in particular, need to recognize that the position they currently enjoy in the marketplace is tenuous. If they delay capability upgrades that are desired by the government, they may witness abrupt changes to regulatory policy.
Set Targets Appropriately: After determining which markets are worthy of additional investment, each operator must judge what technological mix will be the best fit for a market. This requires an assessment of what national governments are focused on, what competitors are doing, and what technologies are in play. The range of issues is broad: Operators will need to analyze household density, building density, competitive pressures, bandwidth demand, consumer purchasing power, the costs attached to various technologies, and the reusability of existing infrastructure (both their own and that of potential partners). Within each market, this segmentation, combined with public policies unique to each national market, will yield a specific set of targets calling for the technology mix most likely to work, the necessary speed for rollout, and the required level and reach of coverage.
Manage and Execute the Approach: Once operators decide where to compete and with what technology, and against what targets to measure future success, they will need to plan how to execute. The stakes are significant: Because of the large costs involved in a build-out over several years and the prospect of waiting before customers are fully connected and revenues begin to arrive, operators can ill afford delays and missteps. To optimize the economics of the rollout, operators can use partnerships to increase its speed, reach a greater number of customers, or lower actual deployment costs. Partnerships—whether with other operators, cable providers, municipalities, utility and sewer companies, housing cooperatives, construction companies, or private investors—are one source of efficiencies and synergies. However, although cooperation seems straightforward at first glance, the relationship has to be managed carefully in order to meet the original targets while safeguarding all parties’ interests.