Motivating Investment from Carriers and Policy Makers
15th August 2017
There are two key stakeholders that can assist in motivating investment in fiber infrastructure and they are the carriers and the policy makers.
Without significant investment there could be three consequences facing consumers; no network densification to support 5G, lack of choice of isps and widening of the digital divide.
Simplicity and capital productivity is what is required to motivate wireline carrier fiber upgrades, starting with the migration from Time Division Multiplexing (TDM) to an all IP Network. This migration can improve carrier cost structure by rationalizing product iterations, simplifying processes and drastically reducing IT costs.
However, failure rates are an issue if IP products don’t interact with legacy IT systems. They can complicate selling, provisioning and billing processes which generates failure rates and fall out resulting in increased costs in dealing with customer complaints.
Operating an all IP network enables more efficient sales, service delivery and service assurance through digital channels. Order to cash processes are no longer burdened by inflexible and dated systems that give inaccurate information which leads to a plethora of issues that costs money to rectify. These are all linked to the TDM network and inhibit the opportunities for wireline carriers to realize the cost savings and customer benefits. Also the capital required to maintain these issues leave minimal ability to fund new IP fiber builds and other innovations.
A study by Nemertes Research shows a move to an all IP network provides a reduction from 21 to 5 hours on repair time, increased availability on replacement parts, 34% reduction for equipment maintenance and 31% lower costs related to moves, adds and changes.
Carriers can realize cost savings by adhering to a transformation program that creates industry standards for IP product mapping, invests in digital processes and reinvests savings into deep fiber/wireless broadband.
Carriers that take these actions quickly will be able to realize the benefits of growth and innovation.
It’s not only carriers that can be held responsible for motivation of fiber infrastructure.
A policy environment more favorable to IP migration will motivate deep fiber investment. In the states, as well as other countries ubiquitous affordable broadband is a policy objective. Many countries have had significant government intervention responding to perceived market failure, however much of this focus has been on customer segments and geographies where the market would have likely deployed broadband regardless of government subsidy.
Removing or reducing legacy regulations that restrict competition and investment, could enable market forces to solve many deep fiber and broadband coverage challenges in the US.
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