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Delayering in Telcos: A Path to Agility and Efficiency

The telecommunications sector is undergoing a significant transformation driven by the need for cost optimization, operational efficiency, and rising capital costs. As telecom markets mature and service saturation halts revenue growth, CSPs are grappling with underperforming capital assets in their infrastructure. This situation has prompted the industry to question whether vertically integrated telcos remain the most effective model for delivering communication services.

Delayering is now crucial as telecom businesses reassess their organizational structures, focusing on separating passive and active network infrastructure into distinct entities. Telcos must navigate this major transition by moving away from the integrated model and embracing new, de-layered strategies to ensure future growth and efficiency.

This approach not only streamlines operations but also boosts agility, reduces capital expenditures (CAPEX), and enhances the overall customer experience. In this blog, we will explore the significance of the presentation layer within the context of delayering and analyse how Microsoft Azure Programmable Connectivity (APC) and the presentation layer can collaborate to deliver transformative benefits to telcos.

The NetCo vs. ServCo Approach

With the concept of delayering unfolding across the telecom sector, vertically integrated businesses are being divided into separate divisions: Service companies (ServCos) and Network companies (NetCos). This separation allows each layer to operate more efficiently and adapt more swiftly to changes. It also creates opportunities for telcos to partner with other companies and leverage specialized expertise to enhance service delivery and customer satisfaction.

ServCos concentrate on customer-facing operations, including customer experience, marketing, and service delivery. Additionally, industry specific MVNOs are emerging in sectors like Healthcare, BFSI, and IoT. Conversely, NetCos are tasked with managing and optimizing network infrastructure MVNOs must be agile enough to respond to these market changes rapidly.

Innovative business models for ServCo, are increasing productivity and optimizing processes. A more flexible and economical operating framework is produced by the deliberate division of network components that occurs throughout this delayering process. Telcos are therefore able to maximise their capital investments in addition to improving their operational efficiency. These segmented infrastructure assets are attracting the attention of investors. A growing inflow of money into delayered companies reinforce the trend, as separate enterprises attract higher investments than integrated entities.

Telcos are embracing the process of delayering as key elements of its development. It is anticipated that this trend will continue to gain momentum as businesses strive to achieve a careful balance between capital optimisation and efficient operations. In this era of rapid technological innovation, telecom operators will probably continue to experiment and refine the NetCo vs. ServeCo models in an effort to find the most sustainable and effective course of action.

As telcos adopt a delayered structure, two key components become increasingly critical to their success: Azure Programmable Connectivity and the presentation layer. These components not only facilitate the technical and operational aspects of delayering but also enable telcos to deliver high-quality, personalized customer experiences.

Importance of Delayering, the Role of Presentation Layer and Relationship with Azure Programmable Connectivity

By grouping associated operations together, delayering entails rearranging activities to maximise growth. It is possible to reorganise depending on capabilities, business models, products, or customers. For instance, a business may include divisions dedicated to infrastructural and wholesale services, as well as B2C and B2B services. This reorganisation improves the identification of growth opportunities by helping to concentrate management focus and expertise.

Delayered units support multiple modes of operation. A network unit will probably need a more organised model based on internal resources, whereas B2C and B2B units might need an agile operating model that relies on collaborations with third parties. Delayering also increases transparency by exposing the true performance of each entity. A set of unique KPIs for every unit makes it possible to monitor growth in great detail. With the help of AI Enterprises will be able to partner with CSPs better by understanding what APIs can be bundled with their offerings in order to improve a specific set of enterprise goals like higher GMV, conversions etc.

With its ability to create a more focused talent strategy with unique retention, advancement, and incentive plans, a delayered unit may also help in attracting talent. It can provide a more compelling growth story to investors and may create opportunities for partnerships that would not have been possible in an integrated business.

Role of Presentation Layer:

The presentation layer plays a crucial role in the delayered architecture of telcos. It serves as the interface between the service provider and the end users, handling tasks such as:

  • User Interface (UI) Design: Ensuring a seamless and intuitive experience for customers.

  • Personalization: Tailoring services and interactions based on user preferences and behavior.

  • Data Presentation: Displaying relevant information to users in a clear and accessible manner.

In a delayered setup, the presentation layer can be more agile and responsive, allowing telcos to quickly implement changes and improvements based on user feedback and market trends.

Collaboration with Azure Programmable Connectivity:

Azure Programmable Connectivity (APC) offers a robust platform for telcos to enhance their network capabilities through programmability and automation. When integrated with the presentation layer, APC significantly improves the overall user experience and operational efficiency in several ways:

Improved Customer Experience: Integrating APC with the presentation layer allows telcos to offer personalized and dynamic services. For example, real-time network adjustments can be made based on user behaviour and demand, ensuring optimal performance and satisfaction.

Reduced CAPEX: APC enables efficient use of network resources through automation and intelligent management, reducing the need for costly hardware investments and minimizing operational expenses.

Enhanced Agility: The combination of APC and a flexible presentation layer allows telcos to quickly adapt to new market demands and technological advancements. This agility is crucial for staying ahead of the competition and meeting the evolving needs of customers.

Simplifying Network Integration and Delayering with Azure Programmable Connectivity & Tecnotree Moments Presentation Layer

As networks and applications converge, there are never-before-seen potential for mobile application developers. For example, Microsoft Azure Programmable Connectivity (APC) provides a robust framework that makes it easier to incorporate network functionality into mobile applications. With robust features and expanding global network ecosystem, APC & Tecnotree Moments presentation Layer signifies the future of mobile applications. It enables developers to explore new frontiers of innovation and functionality and overcome the limitations of traditional app development.

A practical use case of collaboration can be seen in an API Marketplace, which provides a platform where developers and businesses can access and integrate various APIs offered by the telco. Here’s how it works:

  1. Journey Management Process: The presentation layer offers a user-friendly interface for browsing and selecting APIs, while APC ensures that the selected APIs are seamlessly integrated into the network.

2.Journey Orchestration: APC automates the provisioning and management of APIs, ensuring they are always available and performing optimally. This orchestration reduces manual intervention and accelerates the deployment process.

  1. Personalization: The presentation layer can use data analytics to recommend APIs based on the user’s specific needs and past behavior. This personalized approach enhances the user experience and drives engagement with the marketplace.

To sum up, there are many strong dependencies between NetCo and ServCo, indicating the strength of their integration. Network and service delayering represents a major turning point in telcos. Delayering, combined with the power of APC and a robust presentation layer, provides telcos with a clear path to greater agility, reduced CAPEX, and superior customer experiences. By breaking down traditional barriers and leveraging advanced technologies, telcos can stay ahead in the competitive telecom landscape and continue to deliver exceptional value to their customers. Embracing these strategies allows telcos to transform their operations, drive innovation, and secure a prosperous future in the ever-evolving digital age. A clear vision and strong governance will be essential in navigating the changing landscape and guaranteeing the success of these transformations.

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