If you have been in the connectivity services business long enough, you are aware of the frustrating inability to grow profit margins for the core business or sustain average revenue per unit sold.
You have learned to navigate a business whose primary profit generators and business context have changed dramatically over the last quarter century. By any estimate, global industry revenue sources have changed drastically over the last two decades or so.
So have profit drivers. Mobility now represents something on the order of 70 percent of all industry profits, while all fixed services together represent about 30 percent. Where voice once represented half of profits in 2000, in 2023 voice represents perhaps 10 percent of profits.
Consumer services still drive a majority of profits, but there has been a shift to business drivers since 2000.
The other big change has been the evolution of revenue sources since the internet era began, about the mid-1990s, most notably the emergence of home broadband as a consumer revenue driver and business revenues as a bigger source of total revenues.
In substantial part, business revenues have grown because of the importance of mobility and remote computing, cloud computing and internet access and transport.
At the same time, network architectures for most networks have changed as well. The single-purpose and application-specific networks (broadcast TV, broadcast radio, cable TV, mobile voice, fixed voice have given way to multimedia (text, image, video) networks.
That, in turn, has enabled a huge transformation of business models, revenue sources and use cases. Underlying the internet service provider angst about data consumption growth is the shift of entertainment video from linear to on-demand, for example.
But application-agnostic networks also tend to favor symmetrical bandwidth, as demand sources and sinks become more dynamic. Content delivery networks could assume that almost all bandwidth was in the downstream direction, as content consumers were on one end, content deliverers on the other end.
Multimedia networks can make fewer such assumptions. Voice traffic is mostly assumed to be symmetrical while much business “data traffic” can take many patterns.
Among the other key changes, movement of data between data centers and within data centers now dominates most core network traffic, even when all that activity supports data demand by end users at the network edges.
People might complain that connectivity services are not "agile" enough, but the charge is only partly correct. Perhaps few industries have experienced as much fundamental change in products and revenue drivers over the past couple of decades.
The industry might not be especially "culturally agile" but it has successfully become product lifecycle agile.
