Omdia on why telcos are increasingly fixated on reducing opex

Omdia's Adam Mackenzie joins the podcast to dig into the causes of rising opex and explain how service providers can manage it.

Kelsey Ziser, Phil Harvey

February 14, 2024

At a Glance

  • Areas where opex is increasing for service providers (03:34)
  • Economic factors contributing to higher opex (08:21)
  • Shutting down legacy networks is an effective but challenging way to reduce opex (10:39)

Inflation, rising energy costs, tighter consumer budgets and higher salary expectations are among the factors increasing service providers' operating expenses (opex). On top of the reverberating financial impact of inflation, 5G hasn't lived up to revenue expectations.

Adam Mackenzie, senior analyst with Omdia, joins the podcast to dig into the causes of rising opex and explain how service providers can manage it. This is the focus of his recent report: An Analysis of Telco Opex: Minimizing Costs and Maximizing Efficiency.

Mackenzie explains how service providers can reduce opex by shutting down legacy networks, through mergers and acquisitions (M&A) and other more unpopular methods such as layoffs. 

Click on the caption button for a lightly edited transcript.

Here are a few topics we cover:

  • Overview of Omdia's new report on telco opex (01:51)

  • Areas where opex is increasing for service providers (03:34)

  • A look at the broader impact of rising opex on the telecom market (04:45)

  • Economic factors contributing to higher opex (08:21)

  • Shutting down legacy networks is an effective but challenging way to reduce opex (10:39)

  • M&A, labor reductions and other methods to reduce opex (13:19)

  • Italian operator TIM reduces opex through voluntary employee exits (14:36)

About the Authors

Kelsey Ziser

Senior Editor, Light Reading

Kelsey is a senior editor at Light Reading, co-host of the Light Reading podcast, and host of the "What's the story?" podcast.

Her interest in the telecom world started with a PR position at Connect2 Communications, which led to a communications role at the FREEDM Systems Center, a smart grid research lab at N.C. State University. There, she orchestrated their webinar program across college campuses and covered research projects such as the center's smart solid-state transformer.

Kelsey enjoys reading four (or 12) books at once, watching movies about space travel, crafting and (hoarding) houseplants.

Kelsey is based in Raleigh, N.C.

Phil Harvey

Editor-in-Chief, Light Reading

Phil Harvey has been a Light Reading writer and editor for more than 18 years combined. He began his second tour as the site's chief editor in April 2020.

His interest in speed and scale means he often covers optical networking and the foundational technologies powering the modern Internet.

Harvey covered networking, Internet infrastructure and dot-com mania in the late 90s for Silicon Valley magazines like UPSIDE and Red Herring before joining Light Reading (for the first time) in late 2000.

After moving to the Republic of Texas, Harvey spent eight years as a contributing tech writer for D CEO magazine, producing columns about tech advances in everything from supercomputing to cellphone recycling.

Harvey is an avid photographer and camera collector – if you accept that compulsive shopping and "collecting" are the same.

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