“Throughout the last decade, CSPs have been throwing money at network technology, hoping to cut costs,” says Kevin Dundon. “But it’s not working. Why? Because they’re ignoring innovation in voice and unified communications.”
In this interview, we have Kevin Dundon, Chief Strategy Officer at Alianza, dissecting Omdia’s research report “Reinventing Core Communications: Strategic Imperatives for Growth,” and diving into the challenges facing the telecommunications industry and how cloud transformation can be the key to unlocking a new era of growth, innovation, and customer experience. With traditional voice revenues declining, Alianza’s CSO offers insights on how CSPs can create new revenue streams, leverage AI, and prioritize customer experience in a rapidly evolving landscape.
The Omdia Research report, highlights the importance of cloud transformation for telecommunications service providers. What’s the current innovation landscape in telecom core communications, and what challenges do CSPs face?
Throughout the last decade, Communications Service Providers (CSPs) have been investing heavily in network technology in hopes of driving down operating expenses (OpEx). But it’s not working – CSPs have failed to drive down OpEx despite these investments. Why? Because they’re largely ignoring innovation in voice and unified communications.
Many telcos are still operating on legacy voice infrastructure deep in their networks. Not only is it reaching end of life, but it’s costly to maintain, lacks scalability, and the workforce skilled in voice engineering is aging out. This is where cloud transformation of core communications comes in, and at Alianza we call this era Telco 3.0. When CSPs migrate their legacy network infrastructure to the cloud, they will deliver better customer experiences, drive down OpEx, increase scalability and streamline operations. Cloud transformation of core communications also sets the stage for CSPs to bring new innovations in AI and mobile to their residential and business customers.
The report discusses the benefits of AI-driven innovation in core communications. How do you see AI technologies shaping the future of customer engagement and revenue generation for telecom companies?
Artificial Intelligence has already been game-changing for the industry but most of the focus has been on knowledge workers and large enterprises. We anticipate seeing a real difference in customer engagement when it comes to how Generative Artificial Intelligence (GenAI) will enrich communications for the small and mid-sized businesses (SMBs) across Main Street USA that still rely on voice calls to communicate with their customers every day. GenAI-driven innovation in core communications will equip SMBs with deep analytics and sentiment analysis to derive insights from their customer conversations while unlocking new revenue streams for CSPs.
Service providers are urged to rethink their go-to-market strategies to differentiate themselves effectively. What innovative go-to-market strategies could CSPs adopt to stand out?
First and foremost, CSPs should focus their go-to-market strategies on delivering a modernized, digital-first customer experience. This includes equipping their customers with dashboards and analytics for self-service and management as well as billing, payment and service status. CSPs delivering a simplified, easy to use and easy to consume customer experience will win every day over providers who fail to modernize and streamline customer interactions.
With traditional voice revenues declining, what strategies does Alianza suggest for CSPs to create new revenue streams?
As mentioned above, an easily digestible customer experience is a critical piece of the puzzle for CSPs to create new revenue streams. We also suggest product bundling. CSPs can integrate voice and UC services into their existing offerings like Wi-Fi, broadband, and security, to create a one-stop-shop for residential and business customers. Product bundling helps CSPs deliver customized experiences at a competitive price point, especially when you’re comparing to over-the-top vendors like Zoom and MSFT Teams. CSPs can sell residential customers attractively priced packages for voice and internet. And for SMBs, CSPs can package up voice and internet with critical business communication features for an incremental monthly fee.
One of the key recommendations is for telcos to prioritize customer experience and invest in digital operations. How does Alianza support CSPs in enhancing customer experience and streamlining their operations?
We recently entered a strategic collaboration with Amazon Web Services (AWS) to transform how CSPs are delivering and monetizing their cloud communications services. We work closely with our CSP customers, who we view as indispensable strategic partners, to help them migrate their core communications to the public cloud, enabling them to deliver improved customer experiences and simplify operations.
The Alianza Cloud Communications Platform leverages public cloud building blocks but packages the telco experience into easy-to-use products, integrated carrier services options, and operational tools to manage the offers, subscribers, and the connectivity. CSPs deploying their communication services on our platform can maintain their own branding across all customer interactions, improving their end-user customer experience.
Cloud migration is highlighted as a crucial step for telcos to achieve operational efficiency and scalability. Could you share some success stories or case studies where Alianza has assisted CSPs in successfully transitioning their core communications to the cloud?
One success story that comes to mind is our journey helping Lumen, a global communications services provider, transform its networks.
With approximately 500,000 route fiber miles serving customers in more than 60 countries, Lumen was seeking a modern POTS replacement solution to enhance their voice and cloud communications portfolio to meet the ever-changing needs of customers who still relied on legacy infrastructure for business-critical systems.
To accomplish this, Lumen partnered with us to transform their networks with the Alianza cloud communications platform. The partnership enabled Lumen to deliver a successful, digital-first customer experience through centralized management of their platform and customer base. Today, we continue to partner with Lumen to help them achieve strategic revenue growth goals, differentiating them from over-the-top competitors.
In light of the evolving telecommunications landscape, what are some emerging trends or technologies that you believe will have a significant impact on the future of core communications?
We briefly touched on two emerging trends that will have a significant impact on the telecommunications industry: GenAI and product bundling. And one that we’re focused on more and more is mobile convergence, which ultimately gives CSP customers the ability to communicate seamlessly in the same environment, regardless of location or device.
Lastly, what advice would you give CSPs for innovating and transforming their core communications strategies?
We’d advise CSPs to find a strong partner to help them along their transformation journey. The Omdia research suggests that CSPs should link up with cloud partners that operate on a sell-through business model, like the way we operate at Alianza. With growth from over-the-top providers (OTTs) like Zoom and MSFT Teams, service providers risk losing revenue while they continue to be disintermediated from their customers. With a sell-through business model, CSPs can resell a cloud provider’s communications services as a value-add through their own channels, continuing to maintain full-ownership of their existing customers without risk to their brand equity and pricing strategies at a much better operating cost.
