The Telecom Value Fabric, what is it and how does it work?

By: Lotfi Al-Sarori

The telecommunications market is booming. According to Grand View Research, the global telecom service market was valued at 1,657.7 billion USD in 2020 and is expected to grow by a CAGR of 5.4% between 2021 and 2028 to reach 2,467.01 billion USD.

CSPs

Telecom operators are now part of a classification of service providers known as communications service providers (CSPs). According to Gartner, a CSP is a business that offers any type of service of connectivity, information, media, content, entertainment, or application over any type of telecommunication, computer, or data networks. These companies include telecom operators, content and application providers, media broadcasting providers, Cloud communications service providers, and Internet service providers (ISPs).

 

A Telecom Paradigm Shift

We have been experiencing a major paradigm shift in the field of telecommunications. Telecom operators today are delivering much more than just voice calling services, text messaging, and Internet bundles. They are offering a wide variety of services ranging from home and office Internet connectivity such as ADSL or FTTX, to software application hosting, including Cloud-based IaaS, or Cloud subscription-based software in SaaS model.

While telecom operators are capable of offering various services to their customers, offering more advanced products such as these typically requires a combination of products and services offered from numerous vendors.

 

The Value Fabric

Interwoven Fabric Image by yingyang - Freepik

This new concept of numerous businesses collaborating to offer a product made up of “interwoven” products or product components is defined by the TM Forum as a value fabric. This goes beyond the traditional concept of a value chain where every vendor may add an additional part or service to the final product. One key difference is that products in a value chain are created in a sequence until the final product is delivered. In a value fabric, however, the final product is delivered simultaneously by multiple providers. That is, the product is a combination of other products, components, or services that work together as one unit to make up the final product. This final product is delivered by combining these different parts on the spot, i.e., in real-time as explained further in the next section.

Complex Products and Partnerships

This model requires telecom operators and CSPs in general to work in tandem to be able to create such complex products. For example, offering a Cloud software service from a telecom operator may require hosting services from one partner and the software itself from another partner. This scenario would require at least three partners, the PaaS provider, the software vendor, and the telecom operator.

Taking this scenario further, imagine a combination of integrated software systems offered as one service. There could be several software systems offered from various software vendors hosted by a number of PaaS providers. These systems integrate with each other to provide a comprehensive software suite to the customer.

One such system could be a comprehensive education management software service offered by the telecom operator in a SaaS model. This software may comprise a learning management system (LSM) from one software vendor, which requires another partnership with a PaaS provider to host the system. Moreover, additional integrations with an HR system from a SaaS provider to manage payroll and personnel and a financial system to manage accounting processes from another SaaS provider could bring even more value. In addition, the software may also need to integrate with a document management system (DMS) from a third SaaS provider to manage all related documents.

Thus, we have one software vendor, one PaaS provider, and three SaaS providers for the HR, Financial, and DMS software. This means that the telecom operator would need to partner with five partners to provide the final product, an integrated and comprehensive education management system provided in SaaS model.

 

So, what does this entail?

This type of complex product offerings and involved partnership schemes requires a major update to various business workflows in the telecom enterprise. CSPs need to be able to handle the complexity of the interconnected business operations across their organizations and their partners. This requires advanced software systems that are based on standards and best business practices.

We will get into further details about what type of software is required with examples and further exploration in another article. Meanwhile, check out ESKADENIA’s telecom BSS software suite built on the TM Forum standards and providing powerful systems to handle this complexity of partnerships in the value fabric.

ESKADENIA also offers comprehensive education management systems for schools, universities, and training centres.