Meeting the revenue challenges of communication service providers

Communications Service Providers (CSPs) are facing new challenges to their traditional business models.

These CSPs need to compete effectively with traditional competitors, as well as with new and emerging players, which are entering an already saturated business environment––all while facing declining average revenue per user (ARPU).

Competitive challenges and growing demand for ever-more bandwidth are forcing CSPs to expand their network infrastructure, while revenue per Mbit is in a long-running free fall, with no parachute in sight.

CSPs revenue challenges

As service revenues shrink and demand for higher bandwidth balloons, CSPs are looking for ways to control their expenses, while meeting bandwidth demand and providing additional revenue-generating services to their customers.

OTT challenges

Over-The-Top (OTT) players (e.g., Vonage, Skype, Netflix and others) are also challenging CSPs, which are excluded from this new income “party,” even as the OTT services are delivered over the CSPs’ very own data channels. Imagine not being invited to a party that’s being held in your own home!

Even worse, the CSPs end up with the bill for costly expansion of their networks to satisfy clients’ demand for greater capacity to support better OTT service performance.

OTT players are hungrily consuming a growing share over customer communication expenses, while the revenue streams of CSPs are diluted. Services that have traditionally enjoyed high margins are now being downgraded into simple low-margin commodity services.

Cloud computing is yet another greedy bandwidth consumer: enterprises choose to “cloud” instead of buying and maintaining costly machines at their premises, a solution that is good for the enterprise, but presents another challenge for CSPs.

The need for a new revenue model

CSPs seem to be trying to climb the “down” escalator. Despite aggressively seeking new revenue growth, the investment in infrastructure to support that growth continues to grow much faster than the revenues it enables. Clearly, a new revenue model is needed.

To get back on the “up” escalator CSPs must reduce their costs for every customer service/line. Deploying multi-layer access devices that combine carrier Ethernet, MPLS, SDN and L3 services in a single device is the simplest and most cost-effective way to accomplish this.

Single multi-layer access devices offer the following benefits that can vastly improve CSP revenues:

  • Replacing multiple devices with a single device
  • Simplified deployment and maintenance
  • Reduced power and space requirements and improved reliability
  • Reduced expenses for testing, certification and training
  • Simplified and reduced costs of operational processes, management and truck rolls
  • Ability to roll out new services quickly


These benefits translate into significant cost/expenses savings.

IP-PLUS enhancement package

With deep understanding of the very real challenges CSPs face, Telco Systems has developed the IP-PLUS enhancement package.

IP-PLUS is an industry-leading solution enabling delivery of Carrier Ethernet, MPLS and IP services using a single access device via a downloadable software package with the option to purchase with “pay as you grow” on-demand licensing.

IP-PLUS enhancement package

IP-PLUS enables CPSs to provide services such as L3VPN, Dedicated Internet Access (DIA) and Managed Services to their business customers and L3 Backhauling service to mobile operators. Traditionally, this need was met with a massive and costly deployment of routers throughout the entire network – the IP-PLUS enhancement package enables CSPs to provide the same services at a fraction of the cost.

Additional resources

To learn more about IP-PLUS enhancement package download the solution data sheet


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