Decrease in tech competencies at operators is “serious problem”

The move from a technology to a marketing focus at major operators is becoming problematic, according to the COO of Austria-based vendor Kapsch CarrierCom.

Thomas Schöpf told European Communications that a decrease in technology competencies at operators was a continuing trend over the last few years.

While operators have traditionally been bastions of engineering prowess, they are increasingly focusing on customer experience as the network becomes less of a differentiator.

“It is a serious problem – not in the top two most critical challenges, perhaps, but from an efficiency point of view it is very important,” Schöpf said in an interview.

In part, the COO said it was due to operators' focus on driving down costs by getting more out of existing infrastructure.

Milan Sallaba, a partner at KPMG’s Telecoms, Media and Technology practice, agrees that the industry’s focus is changing.

“The industry is maturing and shifting its primary focus from the technology,” he confirmed.

However, Sallaba does not agree that it is a serious problem.

“It is a reflection of the telecom industry’s natural evolution, where access is increasingly being commoditised and differentiation moves to managing the customer relationship to extract maximum value over the customer lifetime,” he commented.

In doing so, outsourcing of network management is increasing as many operators decide that third parties are better placed to manage many of the technical infrastructure components.

According to Schöpf, Kapsch’s operator customers realise that ownership of their customers is key to their future success, but are grappling with exactly how to position themselves moving forward.

While they do so, the complexity of managing their infrastructure is increasing.

“Operator networks are filled with lots of different vendor products which all have different upgrade cycles,” said Schöpf.

“Such frequent upgrades of the various network elements cause compatibility problems, which are often not evident at first glance. This also complicates the configuration of the network elements.”

As data traffic continues to increase, smart devices in particular are causing some specific problems, according to Schöpf.

“Many of the upgrades and updates that are not directly requested by the customer are causing unnecessary signaling traffic,” said the COO.

Sallaba agrees: “The explosion in signalling traffic is a huge problem to operators who face issues in managing related costs effectively.

“Over the past 18 months or so, the problem has been well recognised and operators, who largely set handset requirements after all, have made the reduction in signalling traffic a key issue," he added.

However, Schöpf believes device manufacturers “don’t care” and says collaboration, while clearly of interest, is unlikely to happen.

This is a view Sallaba refutes.

“[Device manufacturers] may not have paid a lot of attention initially, that may be true, but they should going forward now that the problem is recognised: better network resource management will be a significant competitive advantage for them,” he said.

Indeed, the KPMG partner says collaboration is already happening, although more can be done.

Clearly the genie is out of the bottle when it comes to the shifting focus of operators.

Apart from those who are happy to become a “dumb” pipe, many operators will continue to see their workforces evolve towards those expert in marketing, data, health and all the other specialist areas that will drive future revenues.

Getting the balance right will be key; it is not a case of technology experts becoming second-class citizens and it is imperative that the network and technology remain best-in-class.

However, we will increasingly see an alignment of inhouse skills and future strategic goals.


Photo © Albert Lozano-Nieto -

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