Telcos plan to host fully functional business solutions

It's no secret that data traffic has become more important to the telecommunications business over the last 10 years. Thanks to the smartphone and all its associated data-driven applications, operators are benefiting from tremendous growth in a part of their business that was miniscule a decade ago.

What's more is that, according to Randall Stephenson, CEO of AT&T, data volumes are only going to get bigger. In a forum discussion at the Mobile World Congress in February 2013 with the heads of Telefonica, Vodafone, and China Mobile, Stephenson predicted that data traffic volumes in the US would increase by 30,000 per cent between 2012 and 2017.

This huge growth, which will be brought on by cloud-based applications over high-speed, low‑latency networks, is actually small compared to the 75,000 per cent increase that has already occurred between 2000 and 2006, a boost driven by the advent of the smartphone.

As if this stellar growth in data usage weren't enough, telcos also have ambitions of becoming integral parts of value-added solutions, turnkey applications that help companies improve some of their core business processes. Solutions range from supporting platforms such as mobile device management, to automation of business processes specific to industries, such as utilities.

But this idea of operators going to market with hosted enterprise applications has been around as long as data services have been delivered over mobile telephone networks. An early version of cloud-based software as a service (SaaS), operator-hosted applications never got off the ground in a substantial way.

However, much has changed since the early forays into mobile solutions, and today telcos can stake a more credible claim on the market for full mobile solutions. For example, the demand for context-aware applications is growing, and this hungry market could be fed by mobile operators, who have for a long time tracked the positions of phones. Telcos also know when handsets are turned on and are reachable, and they can identify and authenticate users.

"It is true that telcos have seen the opportunity for extending their business model and growing from the core of communication services for a long time," says Phil Jordan, Group CIO of Telefonica.

"I think the key difference today, is that now its more about survival than strategy. The traditional business model is commoditising and the regulatory and competitive pressure is unrelenting. So now is the time for change."

CIO Profile - Telefonica CIO Phil Jordan - UK leader with global vision

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