Mobile operators are under pressure to meet capacity demand while containing costs and launching new offerings in mobile services markets.
They now compete with web-scale companies like Amazon, Facebook, and Google that offer similar, even more innovative services at a far lower cost base with agile development environments that speed time to market. Web-scale model companies, like Facebook, have the ability to innovate through continuous development and integration, creating a “fail fast” culture. They have a global reach with minimal infrastructure, and massive scale with little overhead, resulting in very high revenue per employee. Case in point: Netflix has an average revenue per employee of $1.9M compared to AT&T’s $638K. Operators can’t carry on business as usual and expect to compete with web-scale rivals, while preparing for a 5G future. Besides not having the speed and agility of their web-scale competitors, operators are watching OTT services steal the majority of subscribers’ mobile engagement.