An industry consolidating is an industry commoditizing at the product/service level, and that’s obviously happening in telecom. The AT&T bid for T-Mobile has now been followed by a Level 3 bid for Global Crossing; both are subject to regulatory approval, of course.
The simple reason for all of this is disintermediation, the fact that operators have become disconnected from mounting service revenues generated by advanced services while still committed to carrying traffic and supporting connectivity. If you go back to the old days of Custom Local Access Special Services (CLASS), you may recall that even in the 90s it was this group of services (which included Call Forwarding, Voicemail, etc.) that generated the highest ROI, and you may also recall that it was this class of services that gave rise to what became known as the Advanced Intelligent Network (AIN) architecture for voice services.
For the past four or five years, operators have been groping for an architecture for the Next-Generation Advanced Intelligent Network (NGAIN). We’ve had a chance to review the approaches taken by operators in three major global regions, and there’s a significant amount of commonality in the ideas presented.
What’s also interesting is that all of the players seem to be basing their next-generation plans on cloud computing principles and software technology frameworks rather than on network equipment. IBM and Microsoft seem to be more an inspiration than Alcatel-Lucent or Cisco or Juniper.
In a related move, Verizon’s Digital Media Services group announced its bid for an in-house NGAIN-like approach focused on digital video. The company wants to offer everything from transcoding and content delivery network management to rights management and (of course) wireline and mobile multi-screen delivery. By grabbing all of these elements, Verizon raises the bar for competitors like (you guessed it) Level 3, that must now capitalize its own comparable approaches. The question that Verizon isn’t answering is whether the elements of its media architecture will be componentized and flexible enough to serve related applications that need information coding, rights management, location-based services and more.