Complexity at all layers will force service providers to restructure their business.

Globally, the telecom market has entered a disruptive phase. It is moving from a highly regulated market with some competition toward a market with many competitors coming from the Internet, other media, and new providers in the mobile and residential broadband areas. Web services, fixed/mobile convergence, regulatory changes and strong demand from businesses and consumers for wireless broadband communication services will drive investments for more innovative services in the future telecom market.

Many economic factors are contributing to the demand for telecom services. The trend toward bundled services is influencing the consumer market, as more customers have a preference for getting multiple services from one provider. Pricing pressure for landline voice and basic wireless services is putting pressure on providers to seek new sources of revenue and at the same time continue to sweat the cost of the public switched network. As this decade comes to a close, consumers can expect to get more flexibility in using media and content services as access bandwidth increases and service providers are exposed to third-party application developers and partners.

Eventually the mobile, residential and business markets will converge onto a common network, giving subscribers more personalized services. Some service providers are aggressively implementing a transformation to swiftly meet their goal of an all-IP network. BT and Telstra are most notably pursuing this strategy. Others, such as AT&T, KPN and Telecom Italia are selectively targeting parts of their business to enter new markets and evolve to avoid becoming a telco utility — a.k.a a bit provider.

In the 1990s, service provider development teams were unencumbered by intense competition in their home markets and had a greater understanding of how to manage technology that delivered a consistent experience with much less complexity in the network and service layer. In many cases, these teams developed customized billing, customer care and operational software systems to support fixed and mobile services in the belief that these systems were a competitive differentiator. In many cases, these software systems were tightly coupled with the network technologies provided to the wholesale, business and consumer markets.

But the disruptive force of over-the-top providers and new marketplace entrants today has created more demand for software automation that can manage next-generation services. And this time, service providers don't have the time or expertise to build it in-house. To meet the competition head-on, providers must open up their networks to third-party developers, which can create new revenue streams for content and application services. The level of complexity in the network, service and application layers combined with a multilayer ecosystem of content, media and telcos will force service providers to restructure their businesses to adapt to market changes.

Networks and services today are well-defined and controlled by a single operator, and capacity and network delivery are well-understood. The networks of the future will be more complex. Services will be provided not just by one operator but by many third-party providers. In many cases, consumers will be able to access multiple services on a single device.

As services converge onto that device, each application will require a different quality of service, and services will cross more than one access network. A traditional single service management approach won't work.

Service providers will need a multidimensional view, both in terms of how the network delivers a service and in the context of who is using it. This information will be important not only to operations and engineering but also to customer care, quality control and product management groups.

Business processes and infrastructure investments are changing the way service providers design, deploy, test and manage new services to quickly meet demand. But the legacy network will be around for at least another decade, so new applications must be capable of leveraging the cost into the legacy network.

So how do service providers invest in new services while sweating existing assets? They must focus on a more flexible software platform that promotes service innovation while controlling cost. Far too much is being spent to manage legacy services, and this is why consolidation projects are becoming more important. This includes consolidation of both network operations centers and software.

What is different now is that advancements in IT software development and Web services are influencing how businesses and consumers communicate, conduct business and purchase entertainment services. The intelligence is moving out of the network and into the application server, and the industry is moving away from proprietary software built into the network toward more flexible services running on gateways and servers, and supported via open interfaces based on industry standards.

The service delivery platform (SDP) provides the service creation and execution environment, but it abstracts the complexities of telecommunication signaling and infrastructure away from the application programmer. This brings with it new IT infrastructure components and the need to manage services with the same quality and reliability of SS7 and switched networks, which offer five-nines availability.

As the SDP becomes central to generating new services and extending support for legacy voice, the service creation environment must be capable of exposing and reusing existing service capabilities. It also must assemble components developed internally by the service provider and its content partners.

The trend away from proprietary, network-specific services toward Web services has produced a need for a service development environment to create, deliver and manage these new offerings. A development software environment that provides business modeling, design verification, code control and access to external components for software reuse is needed to deliver high-quality combination services in current market time frames.

An SDP must facilitate introducing services into the market quickly and efficiently. The ability to share data across many existing operations support and business support systems (OSS/BSS) seamlessly enables new service introductions without disrupting existing business activities.

Most service providers have accepted the value of a component-based software architecture because it gives them flexibility and minimizes the impact on the total system if changes need to be made.

Another concern for service providers is the high cost of integration with existing billing, care and OSS systems. A notable shift away from point-to-point integration, which contributes to high integration cost and opex expansion, is leading to growth in the middleware market.

An SDP in combination with an IP multimedia subsystem-enabled network provides rapid deployment of new IP services. In some cases, service uptake can be rapid — almost viral. This will have an unpredictable impact on traffic patterns and volumes on the IP network. Real-time event and performance monitoring solutions will be essential to warn of problems and to support network planning.

Service providers serving corporate customers are demanding solutions that measure end-to-end data application performance and more precise information about the business impact some parts of the network have on their most valuable customers. Previous investments were driven by network uptime and availability. But this approach only looked at issues related to how the network was performing. Now service providers are demanding more information related to service availability and how it is affecting the customer experience.

What we are seeing in the mobile market is that service providers target their most profitable corporate customers. Information is collected on voice or data transactions from the network and linked to individual employees via their handsets. In UMTS networks, the individual identity is associated with the international mobile subscriber identity, which then can be associated to individuals' employers. This allows service providers to get a multidimensional view of the network, service and customer, and start to prioritize trouble tickets. Better business decisions can be made. For example, cell site optimization will be tracked more closely in areas with high usage for key corporate accounts. It's a different approach that grooms data about the customer instead of just looking at raw data about the number of dropped or blocked calls.

In order to be successful in adopting a multimedia-convergent, services-led organization, full support is required from each stakeholder. The SDP has more moving parts that require the attention of the entire organization to ensure product quality in the design-to-deployment life cycle. Attempting to preserve the silo organization for anything more than minimizing disruptions to the customer will stall service innovation, drive up cost and compromise quality.

Start with a proof of concept for a simple service. Evaluate the effectiveness in collaboration among the business analyst, architect and development organizations, and consider the flexibility to change or add new service capabilities in the future. This approach is useful to gain credibility and gain the resources and funding necessary to develop more advanced services.

End-to-end service quality management will require business realignment. Service providers can start to extend management capabilities by acquiring signaling and data transactions using existing network monitoring systems. Monitoring application and Web service transactions combined with object-oriented modeling will provide more robust management to represent the new services created from the SDP. As new services gain adoption, older systems can be retired as the customer base moves over to the new service.

This will require some level of software consolidation to streamline the operation. It also will require a wide assortment of interface adapters to support complex service modeling. This phase of the project will be time-consuming, but the benefits gained will enable specific reporting capabilities relevant to each business manager in the service provider based on their role in the organization.