Telecom companies continue to be under tremendous pressure. Wireline operators are losing margins and face increasingly fierce competition from new entrants on their turf. With a continued loss of voice revenues, they are moving towards broadband infrastructures at full steam. Wireless operators appear to be more and more threatened by extinction as well. In spite of growing markets, voice ARPUs are declining and the only way to fill the gap is to introduce operationally costly data services. All in all, it has become imperative for telecom companies to reinvent themselves and adopt the nimbleness that makes their new competitors so successful. A very tangible path in this direction is a radical farewell to rigid product development processes, replacing them with much more agile, exploratory and entrepreneurial approaches to materialize innovation.

Innovation is no easy task. It requires embracing a new way of doing business, where spotting and cultivating new technology is fundamental. This includes the systematic identification of new technologies and business models, detailed evaluation, aggressive prototyping and, last not least, implementation and operations. These are key differentiators where tomorrow’s successful telecom leaders need to succeed.




The pressure points


Both wireline and wireless telecom companies are being increasingly pressured by market saturation, new competitors, eroding margins and technological disruptions. The pace of change in each of these areas is significantly more intense than in other industries. Keeping up with this acceleration is a challenge.

The pressure on wireline telcos intensifies with continued price erosion, mainly driven by new entrants that attack the incumbents on their home turf – voice communications. As voice becomes just another application which can be delivered over an IP environment, the potential for new competition is enormous. This is happening globally. The following graph illustrates this trend for the western European markets: 


> Market liberalization, new technologies such as VoIP and new competitors are all shaping a potentially lethal environment for traditional landline operators. 
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