Carriers have a long history of partnering to route traffic across the globe. Operators work with local providers to terminate rural calls. Organizations maintain multiple partnerships to manage mobile roaming and drive revenue. Today we are seeing a new breed of partnership based not on extending regional coverage, but instead on improving technical capabilities.
Consider the recent agreement between Telefonica Germany and Deutsche Telekom. Telefonica is basically offering its fixed broadband customers an upgrade from slower ADSL to 100 mps connection speeds simply by wholesaling Deutsche Telekom network services. This is extremely fortuitous, as Deutsche Telekom just announced a massive €30 billion, three-year network investment plan, €6 billion of which was earmarked for fiber to cabinet and vectored VDSL in Germany.
The benefits to both are clear – mitigated investment risk for Deutsche Telekom and faster performance upgrades for Telefonica customers.
Although the BT and O2 organizations are more closely related, their recent partnering reveals another twist to this trend. Competition is fierce for LTE customers in the UK and operators are moving as quickly as possible to deploy LTE service and sign new users. O2 hopes to gain an advantage in this race by having BT build a high capacity transmission network it can utilize to meet the tremendous demand for data-intensive 4G and mobile internet services. Alas, BT is not doing this out of fondness for its one-time fledgling enterprise – the deal will reportedly generate £500 million in revenue for the company over the next decade.
Inter-Carrier Technology Exchange
The inter-carrier “technology exchange” idea bodes well for consumers and business alike. Rather than having to be first to deploy every new technology, operators today can strategically leverage their expertise, business savvy and infrastructure strengths. Consumers gain faster access to better service, without having to continuously shop around. Naturally, it does create additional internetworking complexities and carriers will have to keep a close eye on potential service delays. Transparency on customer experience issues will become a key element to a successful working relationship.
It will be interesting to see how this idea plays out as evolving conditions reveal new opportunities for profitable relationships.