Vendors to Partners – Future of telecom enablers

5G will change the telecom landscape in several ways. One of the interesting implications of 5G would be that the traditional relation-equation of a vendor and operator will vanish, and they will act more as partners to co-create the value for a customer.

It’s not that this would be for the first time happening when operators and the vendors shall work together. But, in context of Indian telecom ecosystem, where the operators don’t have adequate money to invest and vendors see it as among largest potential markets, the business models could get disrupted so that typical value chain.

Telcom could be seen as a traditional infrastructure industry, where business models like BOOT, BOT, etc., have been successfully implemented. The PPP mode saw unprecedented growth in the infrastructure development in India where the private resources were utilised for capital investments in the infrastructure and the returns are accrued over a period time, eventually leading to the transfer of ownership. In a similar fashion, there is all possibility, to expedite the uptake of 5G in India, the vendors might go extra mile and create networks by investing in them and then building a business case where the cost of infrastructure would be recovered over a period of time, and finally the ownership handed over to the operator. It could be a Build-Operate-Transfer (BOT) model or anything similar to this.

Network vendors are already working closely right from planning, design, implementation and management of the services for operators. Operators at the moment are only into customer management, marketing and brand, and above all the investment and risk. However, as the scenario builds, especially for the incumbent operators, the network vendors and other enablers might get into other activities of the operators as well to expedite the development of networks and roll out of new age services like IoT, M2M and other services that could be leveraged from 5G deployments.

This would also be beneficial from positioning the 5G correctly among users. If the 5G is not introduced with its use cases and operators rush to offer it as the next evolution to LTE technology, users will end to see only the low-level benefits of the service, which is faster speeds and GB capabilities of throughput.

As the operator side of the equation shall emerge stronger post consolidation, the potential number of engagements for vendors also gets reduced and it would be the first priority of every vendor to forge long term alliances with the operators to create entry barriers for the competition. Both, business requirements and market needs will bring operators and the vendors closer to participate in the growth rather than passing on the buck to the other side, as has been the approach in traditional business practices.