Managed Services

Telcos Go Pro? No!

4:10 PM -- The race to add value to IP-based data services is taking telecom service providers in some interesting directions.

Industry-specific services attacking vertical markets are becoming more common, while managed services -- especially in key areas such as security -- are almost table stakes. Service providers are adding IT and industry expertise to their service rosters as a matter of course.

One key growth area for the near future is in helping enterprises make the transition to IPv6, by offering consulting services that identify where changes need to be made, what equipment needs to be purchased or upgraded, and how to best handle existing applications into which IPv4 addresses have been embedded.

When going this deep into an organization, don't telecom service providers begin to compete with systems integrators, consultants, and other professional services personnel?

According to Ron Spears, president and CEO of AT&T Inc. (NYSE: T)'s Business Solutions group, there's a not-so-fine line that companies such as his have to avoid crossing... for their own sake.

The problem is that, while enterprises are used to hiring consultants or others and paying them rates of $250 an hour for their expertise, when that consulting expertise is embedded within a telecom service provider, many companies expect to get it for free. (See AT&T: Mobility, Network Capacity & Fun.)

So while AT&T has acquired some companies -- USI, for example, and the security services business of VeriSign -- for the expertise of their employees, it only does so in specific areas where that expertise is a billable quality, as it is in the security realm where companies pay for professional assessments.

"You are not going to see a 'Let's go buy a big professional services company' from us," Spears assures. "I would lose the value of whatever talent I bought."

Telecom service providers are thus challenged to bring in industry-specific expertise and make sure they know exactly how they will monetize those efforts. Going beyond the fat pipe isn't just a matter of adding value, but adding value for which businesses will pay.

— Carol Wilson, Chief Editor, Events, Light Reading

shygye75 12/5/2012 | 4:30:57 PM
re: Telcos Go Pro? No!

Are telcos putting themselves at long-term risk if they don't pursue opportunities in tangential areas like professional services? Or can they be confident that their customers will continue to perceive barriers between different types of services (consulting vs. managed services, for instance)?

cnwedit 12/5/2012 | 4:30:56 PM
re: Telcos Go Pro? No!

I think the telecom service providers are getting into tangential services, the point of this blog is that they have to do that carefully, because many businesses won't pay their telecom SPs for consulting services they think the telcos should provide for free.

shygye75 12/5/2012 | 4:30:56 PM
re: Telcos Go Pro? No!

Therein sits one of the huge challenges underlying telco transformation -- getting customers to change their perception of who you are and what you do. It ain't easy, and it ain't avoidable.

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