It can be hard to keep up with the fast-growing, fast-moving, and highly competitive telecom industry. The industry's global nature, encompassing players located in every market and region around the world, makes it difficult to compare and contrast operators. That's where tiers come in. Grouping operators by tiers provides a useful framework for understanding the complex and dynamic telecom landscape and helps stakeholders make informed decisions about which operators to engage with and invest in.
While there are no "rules" or official guidelines when it comes to tier groupings, telecom operators are usually categorized into three main tiers –Tier 1, Tier 2, and Tier 3 – based on their revenue, number of subscribers, network coverage, capabilities, and the region in which they operate.
Here's a quick run-down:
Tier 1 Operators: These are the largest telecom operators with a global presence and a vast network infrastructure. They usually offer a wide range of services, including voice, data, and multimedia services, and are most likely to provide government, enterprise, and B2B (business to business) global services. Tier 1 operators typically build and maintain network infrastructure and often have their own undersea cables and satellite links, allowing them to work as galaxy operators with operations in multiple countries. Some examples of Tier 1 operators include AT&T, Claro, Vodafone, and nbn.
Tier 2 Operators: These are regional operators with a more limited network coverage than Tier 1 operators. They typically serve specific geographic areas or markets and may specialize in certain types of services, such as broadband and/or mobile. Tier 2 operators may also offer wholesale services to other telecom providers. Examples of Tier 2 operators include Breezeline and TELUS.
Tier 3 Operators: These are small or local operators with limited network coverage and may offer a narrower range of services than Tier 1 and Tier 2 operators. They may also focus on serving niche markets or providing specialized services. Tier 3 operators often rely on other telecom providers for network connectivity and may lease access from wholesale operators. Examples of Tier 3 operators include regional Internet service providers (ISPs) and community-based telecom providers.
No matter which tier an operator is grouped into, today's hyper-connected world means service providers are under increasing pressure to manage complex networks, address performance issues, and ensure customer satisfaction.
That's where Incognito's automated broadband orchestration and management solutions come in. By providing carrier-grade solutions that span device management, intent-based service provisioning, IP (Internet Protocol) address management, DHCP (Dynamic Host Configuration Protocol), DOCSIS provisioning, and network intelligence, we can help any tier of service provider deliver a next-generation broadband experience that exceeds customer expectations.
Let's add a little more detail to the tier breakdown:
Tier 1 Challenges and Needs
For Tier 1 operators, the challenge lies in managing vast networks that span multiple regions, business models, network technology, and services. To continue to thrive, they must address the following challenges:
Ensuring interoperability across networks and devices
Adopting standards-based solutions will help Tier 1 operators provide seamless connectivity and compatibility even as the number of connected devices continues to grow and multi-vendor environments become more prevalent. In addition, these solutions can help reduce costs and improve efficiency in network management.
Scaling infrastructure to support ever-growing demands
To manage today's millions of subscribers and devices – and to keep up with future needs – Tier 1 operators must be vigilant in identifying and adopting innovative solutions to help them scale and support network growth while avoiding negative impacts on solution performance. This will give them the advantage they need to meet customer needs and stay ahead of the competition. Network virtualization, allowing providers to deploy new network services and features quickly and cost-effectively without installing new hardware, is one way providers can be more agile and responsive to changing market conditions and customer needs while also reducing costs and improving network efficiency.
Managing multiple networks, vendors, and device types
A centralized OSS (operational support system) can not only help improve operational efficiency by simplifying network management, but it can also provide real-time analytics, insights, and support to identify new revenue streams, reduce costs, onboard new subscribers, and increase ARPU (average revenue per user). These are all ingredients in a healthy bottom line, which is especially important for large, public companies.
Network convergence can provide significant benefits to telecom operators, including reduced costs, increased efficiency, improved customer experience, enhanced network performance, increased revenue opportunities, and improved competitiveness. By investing in converged network infrastructure, operators can position themselves for long-term success in an increasingly competitive telecommunications market.
Tier 1 Opportunities
Adopting New Technologies
Tier 1 operators often lead the charge when it comes to deploying new technologies (e.g., DOCSIS 4.0, User Services Platform TR-369). However, being a market leader comes with a host of challenges, including:
- High costs – investments in research and development, infrastructure, and equipment are considerable.
- Uncertainty – it's hard to predict the return on investment of an untested technology.
- Regulatory challenges – regulatory approvals take time which can delay service and product launches.
- Competition – an operator may do the heavy lifting to adopt new technology, only to find the competition rushing in behind them.
- Technological challenges – new technologies require new skills, expertise, training, and development.
- Customer adoption – offerings that are complex and/or require changes to existing infrastructure may slow customer uptake.
While being first-to-market can provide a competitive advantage, it also requires careful planning and execution. This is something Incognito, as a trusted and experienced advisor, can help with.
DOCSIS 4.0 is a technology advance that merits a mention of its own. Its fast speeds, improved reliability, more efficient use of spectrum, and better support for low-latency applications make it extremely appealing to customers, giving operators who offer it a competitive advantage. Of course, a move to DOCSIS 4.0 comes with many of the challenges identified above (cost, complexity, etc.), but that's where Incognito can help ease the transition and lay the groundwork for continued growth.
Neutral Networks and Wholesale Open Access
With Tier 1 operators being the most likely to offer wholesale services, they need to stay ahead of service delivery and assurance issues that arise in a shared infrastructure scenario. This includes leveraging multi-tenancy capabilities to serve multiple customers from a single-shared infrastructure, allowing a lower cost point while still providing a secure, customized experience. Having a solution to onboard customers quickly, backed up by systematic support to solve problems, is essential, and it's something Incognito can help with.
Scaling to Support Network Growth
More customers, with more devices, wanting more services means an ever-growing need for unique IP addresses. With the growing scarcity of IPv4 addresses, operators wanting to meet demands and stay competitive need to plan their move to IPv6. MAP-T (Mapping of Address and Port using Translation), a software-based alternative to CG-NAT (carrier grade network address translation), is the answer for a seamless, scalable, efficient transition, and one Incognito can help operators implement.
Devliering B2B2X Services
When you're already big (and Tier 1s are), it's important to look for new ways to grow and build new revenues. Some great paths to monetizing connectivity include leveraging the ever-expanding reach of IoT (Internet of Things) and working with non-traditional players to introduce new business models. Telco cloud is also increasingly impactful – allowing telcos to offer highly customized enterprise solutions and compete with the likes of AWS and Microsoft – by quickly adding services and responding to changes in network demand, as well as managing central and decentralized resources more efficiently. With our embrace of innovation – demonstrated by our participation in TM Forum catalysts – Incognito is well positioned to support Tier 1 operators as they reach for new markets.
Tier 2 Challenges and Needs
Tier 2 operators must compete with larger players while operating on a smaller budget – this means finding cost-effective solutions for managing network performance and customer experience. If Tier 2 operators want to deliver a broadband experience that rivals that of Tier 1 operators at a competitive price point, they need to automate processes and leverage analytics to lower OPEX (operating expenses) and optimize network traffic, with specific challenges including:
Keeping Pace with Network Growth
While Tier 2 operators share many challenges with their Tier 1 counterparts, growth is arguably more of a concern for these (relatively) smaller operators. As they look to scale their networks, it's important to find solutions to get new service offerings up and running quickly and easily while avoiding problems, including installation delays which cause lags in payment for service, slow service changes/moves/adds, and inconsistent customer support experience. It's also important to consider a multi-access future. While multi-access offerings enable operators to provide a diverse range of connectivity options to their customers, improve network reliability and coverage, and offer a more flexible and targeted service offering, they also present a learning and operations curve with challenges, including adapting existing operational systems to new technologies and delivering services consistently across different platforms and access technologies.
Limited Financial and Operational Resources
Because Tier 2 operators are more likely to offer their services at a lower price, their margins will be thinner than those at the Tier 1 level, making task simplification/automation tools vital. Competition is also intense in the Tier 2 world, meaning QoE (Quality of Experience) is important to ensure customer retention.
Satisfying Regulatory Requirements
Operators in this tier are often subject to regulatory requirements, which can take many forms, including network/security privacy legislation or government subsidy programs that involve broadband network performance measurements, and Tier 2 operators must ensure they're complying.
Because network security lapses lead to revenue losses, fraud detection and mitigation are vital parts of any plan. Automated cable modem firmware management and central lease management can secure networks from these vulnerabilities.
Tier 2 Opportunities
Competing in the Connected Home
Consumers want new and novel services, and they want them at good prices. In a competitive market, Tier 2 operators can grow their existing business and win new business from competitors by meeting these consumer demands. Incognito's solutions can help by providing tools to support operators in expanding their service offerings and improving operational efficiency to reduce costs and protect their profit margin.
Moving Beyond Residential Services
One way Tier 2 operators can expand their customer reach is by moving into the B2B arena – but serving businesses comes with heightened expectations and requirements in the form of SLAs (service level agreements). Tier 2s in the process of scaling may still rely on many manual processes. With growing demand, they may face increased service outages. Incognito's expertise and solutions can introduce the automation operators need to level up and successfully deliver SLA-intensive enterprise services.
While fiber-based services offer many monetization opportunities for Tier 2 operators, moving into fiber is also a big – and complex – investment to make. Fortunately, Incognito's Network Monetization and Analytics Platform centralized approach to fiber and cable network data collection automates processes, mitigates network congestion, and augments capacity planning to ensure subscriber service quality and help service providers quickly monetize fiber investments.
Expanding Access Networks
The ability of 5G FWA (fixed wireless access) to reach a wide range of customers in a variety of settings also provides great opportunities for Tier 2 operators who would like to serve those customers. To succeed in delivering 5G FWA, operators need to eliminate manual processes and technology silos through strategies including automation, adoption of unified operations platforms, and end-to-end orchestration. Incognito solutions can help implement these strategies and more to reduce complexity, improve efficiency, and enable faster innovation and service delivery.
Tier 3 Challenges and Needs
Many Tier 3 operators take on the role of providing connectivity to specialized or niche markets. To be profitable, they must leverage existing infrastructure and resources to deliver reliable, high-speed internet access which meets customer expectations while overcoming challenges such as:
Many Tier 3 operators are still using manual, in-house OSS (operational support system) processes leading to three main problems:
- Inefficiency and poor customer experience.
- Reactive approach rather than automated service/device management and assurance.
- Siloed operations resulting from non-standardized processes, solutions, and integrations.
Increasing Customer Demands
Today's customers want a great digital experience that, ideally, works seamlessly whenever they need it. When common network issues do arise – the need to change passwords or Wi-Fi settings, or to check speed – they want to have a quick and easy process to follow. And in the case of connectivity issues, customers want good communication and speedy resolution.
While operators at every tier would welcome more resources, Tier 3s are more likely to operate with very tight margins and to need to do more with less. A lack of automation – for example, manual tracking of IP resources and configurations, can keep network personnel from focusing on more important tasks. Also, accessing capital from government subsidy programs may be of particular interest to Tier 3s, making regulatory compliance a must.
Tier 3 Opportunities
Understand Network Usage Beyond Billing
Of course, it's important to get billing right – and Incognito can help with that – however, for Tier 3 operators looking to increase their business, sustainable growth is built on sound business decisions. We can support service providers in moving beyond billing to track usage and consumption, giving operators insights into their traffic and subscriber behavior so they can drive new models and growth opportunities, improve the customer experience, and maximize offerings to reduce churn.
Achieving Fiber Growth
It can be hard to capitalize on the growth offered by fiber if your legacy systems are holding you back. Tier 3 operators may be hobbled by swivel chair operations between access provisioning and device management. They may not have the generic provisioning process they need to introduce ONT (optical network terminal) diversity needed for true fiber interoperability, which can offer tremendous cost savings to operators by shaking up the sole-source network supplier model. That's where Incognito can come in, with the expertise and solutions to help Tier 3 operators achieve centralized, automated FTTx operations.
Expanding network coverage is the key to growth for Tier 3 operators, however, infrastructure and spectrum are expensive. An MVNO (mobile virtual network operator) model can let providers that don't have their own RAN (radio access network) offer new services to more customers without the cost-prohibitive overhead. Of course, MVNOs must stay abreast of developing challenges and needs, including strategies to address IPv4/IPv6 addressing, IoT connectivity, and more. A trusted advisor like Incognito can help with this.
Incognito has current customers in all different stages of their journeys and in every tier, and what they all have in common is using our solution sets to optimize their business. Our experience with this wide range of operators means we can help you wherever you are – whether it's growing within your current tier or looking to move to an entirely new level.
Whether you're a Tier 1, Tier 2, or Tier 3 operator, our solutions can play a critical role in helping you achieve your goals and stay ahead of the competition. By providing a centralized platform for managing and optimizing network performance, we'll support you in meeting the growing demand for high-bandwidth and low-latency broadband access and delivering a superior customer experience.
Contact us today for a conversation about your specific needs.
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