Guest Column

Getting Back to Basics  (continued)

Today is a different environment.  Capital expense can be controlled, and rather than the old credo of  “build it and they will come”, carriers now need to sell in front of their delivery platforms. Allegiance Telecom has proven this model effectively with its smart build strategy.  It has shown the ability to control costs and quickly enter new revenue opportunities, without the cost associated with modifying large network infrastructures.

The lesson is easy to see.  The choice of equipment and technology is an important factor. Initial costs of installation need to be kept to a minimum, and ongoing costs for management of equipment must be controlled. Costs for technology upgrades have to be justified, at the same time upgrades must not disrupt the current network environment.

The reality has been that many carriers never had any choice in equipment purchases or configurations, because the bulk of financing new equipment was coming from vendors. This presents an interesting situation since the vendor’s key objective is to sell as much equipment as possible. So, the vendor provided the initial engineering, as well as the installation, network deployment and management services, and since this cost was all wrapped in as part of the financing, the carrier never saw or completely grasped all the hidden cost.

Hiring operations and engineering teams and retaining them is an expensive proposition. Recruiting has been, and still is, a high-ticket cost of doing business in the industry. Supply dried up as the “perceived” talent went to the highest bidder. With exponential growth in the industry, ongoing costs for training have raged out of control as carriers struggle to keep up with the latest in technologies.

One answer to all these issues is for carriers to become less reliant on the vendors for their total solution.  There are many WAN hardware, software and integration experts that are already helping carriers call the shots in their own networks.

Without an outside agent, there is little hope of keeping the vendor out of the "hen house." There is another option to staff an internal engineering team, but to keep costs down, carriers are using outside labs and professional services companies for testing and proof of concept. Going to a third party gives them a two-fold advantage. First, they do not need to make the large capital investments in lab space and equipment to operate a lab. Second, they do not need the large ongoing costs of recruiting and maintaining high-level engineering talent internally.

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