The more challenging a job, the more satisfying. If that adage is true, Bo Parker must be thrilled.
As managing director of PricewaterhouseCoopers’ Global Technology Center,
Parker helps telecoms navigate a swiftly changing industry.
Once unchallenged, carriers must now answer threats from cable operators,
Voice over IP
Parker isn’t pessimistic about the carriers’ fate, but says they need to
embrace “IP transformation” to succeed. He recently spoke with
internetnews.com about these issues.
Q: Your group recently wrote a white paper outlining the IP
transformation. What do you mean by that?
Unlike other changes in the history of telecom, this one is very fundamental
. . . It’s a complete re-work of the technology and the market. It’s really
the first time there’s been a shift from vertical to more of a platform
approach.
Q: How far along are carriers in laying the groundwork for this
shift?
The reconstruction of the basic network infrastructure is just getting
started. Very few phone calls are being routed entirely over IP networks. IP
[requires] a re-think around how carriers deploy services. Heretofore,
there’s been a silo approach . . . As they move to [services like] IPTV,
they will have to re-think those silos and focus on a more efficient use of
common delivery elements.
Q: Verizon and SBC are investing billions in fiber deployment to deliver
IP services. Is that wise?
There’s a political element to it that has to be considered. Carriers and
cable companies need to, and are, acting with an understanding that the
government will find some way to do it if they don’t, if for no other reason
because of competition. Japan and Korea have [regulatory structures or
incentives for high-speed broadband deployments].
As much as I believe [that fiber] is a great opportunity for [carriers] to
enhance the speed of networks, they have to do it anyway. Lack of activity
is just fodder for those people who say they need to be returned to a
stricter regulatory environment.
Q: With eBay, Microsoft and Google incorporating voice into their
offerings, how important is it that telecoms partner with more nimble firms
to spur innovation and reduce R&D cycles?
It’s fundamental. Most [carriers] would agree that their DNA is around
engineering five 9s perfect networks that never fail and deliver what
they’re supposed to.
That necessitates a certain level of caution in terms
of how soon to roll out new product. But you can treat new ideas, ones without
technological and cultural heritage, differently. For example, Google put
out maps and people love it. Now they’re getting a little feedback about it.
[The carriers] need to change organizationally. I think they will be making
some acquisitions, although you get into some very interesting regulatory
issues. What part of the business is regulated and what part isn’t? It’s
not a slam dunk to go out and buy, but the concept of our paper is to assure
a healthy and wealthy future [telecoms] need to develop this platform.
Q: We’ve talked mostly about the carriers. Can you compare their
situations with those of cable operators?
The difference between cable and the carriers right now is that the cable
guys are not at risk, at this point, of the video market becoming
marginalized [the way telecoms’ landlines are]. Nobody’s saying video is
just another software application. The carriers’ fixed-line voice revenues
are definitely at risk. They need to upgrade infrastructure to support video
and then come up with a value proposition.
But carriers have a large enterprise base and most of them are full or
partial owners of still-growing wireless businesses. I wouldn’t want to
paint a picture that carriers are doomed. Quad-play [voice, video, data,
wireless] — to an extent consumers think of it that way — could be important,
and mobility drives a large part of those decisions.
If in the future it
unfolds that way, these carriers are potentially in a better position than
cable. The cable guys show every indication of being on their toes and
rethinking the cable business around on-demand capabilities and becoming
more intelligent around advertising and programming.
