The changing face of the 21st century carrier

Deregulation, competition and the relentless technology revolution are redefining the telecommunications environment, changing everything from players to services to pricing. To exploit these changes, you'll need careful planning, flexibility and the willingness to take risks.

Ten to 15 years ago (the "Paleolithic Era" in Internet time), the key characteristic of the telecommunications landscape was regulation. A limited selection of providers offered a limited range of services. You could choose switched services or leased lines. Innovative companies opted for the stunning novelty of X.25 packet services.

This lack of complexity had upsides. Because carriers were de facto monopolies, picking the right player was a no-brainer. Prices were high, but changed so slowly and predictably you could get away with inking five- to seven-year deals. And quality was equally predictable (if mediocre), making service-level agreements virtually irrelevant.

The 1990s was a decade of transition. Gradual deregulation led to the proliferation of new players: incumbent interexchange carriers began facing competition from upstarts, and the former regional Bell operating companies became incumbent local exchange carriers and grappled with the emergence of competitive local exchange carriers. New services emerged, such as frame relay, ATM, and later, IP and Internet services.

These changes required adjustments in user behavior. Greater choice led to decreasing prices, which meant more frequent and aggressive contract negotiations. The plethora of new services meant you had to break out the crystal ball and start placing bets on the most promising technologies, with considerable downside if you guessed wrong (pity the manager who bet on Switched Multimegabit Data Service).

So what does the next decade hold?

You ain't seen nothing yet. The rate of change is accelerating. The biggest trend for the next decade is redefinition: of service providers, service offerings and even business models.

Metropolitan-area providers like Yipes, Telseon, Cogent and Sigma are competing for control of the cities, while broadband interconnect players like Global Crossing and Level 3 Communications are reshaping the long-haul landscape. Offerings range from pure bandwidth (or optical Lambdas) through protocol services such as Ethernet and IP to Layer 7 services such as storage and security management. And pricing models are migrating away from the pay-per-call model that dominated the last century's voice networks to a mix of flat-rate, subscription and usage-based services.

A telecom manager should first, plan carefully. If you understand what's going on in the marketplace, you can make more informed decisions. Second, be flexible. Don't assume that strategies that worked last year will necessarily work again. And finally, take calculated risks. Things are changing so fast that you can gain a real competitive advantage by discovering an emerging player or service.

Johnson is senior vice president and CTO for Greenwich Technology Partners, a network consulting and engineering firm. Her column appears biweekly beginning with this issue. She can be reached at johna@greenwichtech.com.