Uncommon Wisdom

Jun 12 2009   1:42PM GMT

Networks are essential, but higher-layer services are the focus

Tom Nolle Tom Nolle Profile: Tom Nolle

The head of Verizon Business says that the company is battling the perception that it’s a network player, a statement that shows just how much service providers like Verizon are focusing on above-the-network revenue for growth.

Its “strategic services” are growing, according to Verizon, and that’s also what we found in our spring review of service provider spending plans. There was an enormous focus on higher-layer opportunity for enterprise services simply because there was a universal reduction in profit for connection/transport services to enterprises.

Companies like Verizon are realizing that while networks are going to be essential to them forever, they’re not going to be profitable enough. In wireline, in fact, there is no hope of profit anywhere, which is why capex will be shifting more to mobile/wireless over the next three plus years.

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