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Telcos Soften Up

Carriers make the case for software-centric strategies at London event, but at least one says the whole Web 2.0 movement is over-hyped

May 1, 2008

4 Min Read
Telcos Soften Up

LONDON -– Sofnet -– "With the current process and systems landscape, future plans will fail."

So said Helmut Leopold, managing director of platform and technology at Telekom Austria AG (NYSE: TKA; Vienna: TKA), and arguably the most interesting and provocative speaker here at the Sofnet event in London.

His message is that carriers need to completely rethink their technical and working process strategies if they're to stand any chance of competing in the new-fangled communications services world, where the likes of Amazon.com Inc. (Nasdaq: AMZN), Facebook , and Google (Nasdaq: GOOG) are leading the way in new applications development.

He believes the way forward for operators that need to reinvent themselves as modern day service providers is to focus less on the hardware -- "It's not about who has the best router," stated Leopold -- and more on the business and operational processes, and base their technology transformation on a software foundation.

And that's by far the toughest thing to do, said Leopold. "Like other incumbents, we have had no single view of our products, and that has made it very difficult to create triple-play and quad-play services," he noted.

So Telekom Austria is introducing a new concept of modular "basic products" (software modules) that can be used as service building blocks, and it's that approach to creating new service products, rather than focusing on the hardware platforms, that's underpinning the Central European carrier's strategy as it migrates to a new all-IP network.

It's also an approach that is finding favour with other operators and which has been the focus of much project activity, and even a recent acquisition, in the OSS sector. (See Comptel Snaps Up Axiom, PSA Wins OSS Catalyst Award, and EuroBites: OSS Matters.)

"A centralized product lifecycle management tool, as well as service and inventory management, are the architectural cornerstones of our transformation project. This will enable greater productivity and efficiencies in networks, services, products and processes," concluded Leopold.

BT Group plc (NYSE: BT; London: BTA) CTO Matt Bross was also chanting the new software mantra as he explained why carriers need to transform themselves from telcos to softcos and embrace the Web 2.0 world of collaboration and new service creation.

For BT, the first step of that transformation is its Web21C project, whereby applications developers can use a BT software development kit (SDK) to create new services that can run over BT's existing infrastructure and, eventually, its 21CN next-generation network. (See BT Inches Toward Telco 2.0 and BT Touts 21CN Progress, New Service.)

As part of that shift, carriers in general need to change the way they think about their customers, noted Bross. "We need to do business with people, not addresses," he noted.

Dissenting voice
But not everyone's gung ho about Web 2.0, which is a hot topic just now. (See Web 2.0 Debrief, TV & Storage Play Web 2.0, Web 2.0 Expo Photos, Part I, and Web 2.0 Expo Photos, Part II.)

Hugh Bradlow, CTO at Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), is mid-way through a five-year plan to transform the Australian incumbent's network to an all-IP fixed and mobile infrastructure, and started the OSS transformation part of the project back in mid-2006. (See Telstra Outlines Massive OSS Project and Telstra Unveils Switch to IP.)

In a briefing with Light Reading at the Sofnet event, Bradlow said the IT transformation part of the project was "always going to be the toughest part... I have never known an industry like the IT industry to over-promise and under-perform."

As a result, he's somewhat skeptical about the claims made by the Web 2.0 camp in terms of what it might do for carriers. "It's over-hyped," he stated, though he is very interested in being able to tap the capabilities of people from outside his company. "The interesting part [of Web 2.0] is the collective intelligence -- the crowd-sourcing."

But while Bradlow is dismissive of some of the revolutionary claims made for Web 2.0, he is already seeing the benefit of allowing applications developers to have access to Telstra's service-creation platforms: third-party developers are creating bespoke bulk SMS services for individual customers and marketing campaigns that use Telstra's messaging platforms; and South Korean online services firm Thinkfree has collaborated with the carrier's ISP, BigPond, to make its productivity tools available to BigPond business users, who can access the ThinkFree services portal using their BigPond email addresses for authentication purposes.

That particular collaboration, though, has attracted criticism, as Telstra struck an exclusive deal with ThinkFree that means anyone in Australia or neighboring New Zealand who wants to use ThinkFree's applications has to sign up as a BigPond customer.

— Ray Le Maistre, International News Editor, Light Reading

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