Client Challenge: Retaining Customers through SDH Network Platform Transition
By Vito Morawetz
The past five years have seen a dramatic transformation in how business and enterprise customers meet their network access requirements. Until a few years ago, the default access technology for B2B customers was based on Synchronous Digital Hierarchy (“SDH” or “SONET” for Synchronous Optical Networking), ensuring dedicated, stable, resilient transmission bearers to support most business-critical applications. However, the development of Ethernet standards has meant that the same quality parameters and business-critical applications can be supported on Ethernet bearers at much higher bandwidth and lower cost per Mbps compared to SDH lines.
As a consequence, carriers are witnessing high churn rate and declining revenues for SDH services of up to 40% p.a. while at the same time they are still required to maintain ubiquitous and costly platforms in support of a rapidly shrinking customer base.
A holistic approach to SDH/SONET platform retirement
While carriers would prefer to deploy scarce resources in support of fast-growing Ethernet-based services, they find that tackling the challenge of SDH obsolescence and transitioning to new platforms is riddled with uncertainty and complexity:
- Is the data used to identify the SDH access services and network components available and accurate?
- Will customers faced with platform transition stay loyal to their existing carrier, or take the opportunity to move?
- What would replacement product propositions look like? Would they emulate services previously available on SDH or provide new capabilities and features?
- What is the impact of transitioning from SDH to Ethernet platforms on access and interconnect facilities? What is the cost of leased lines supporting replacement services? Is the existing Ethernet interconnect footprint optimized to support increased Ethernet volumes?
- What is the overall business case, i.e. the revenue, cost and savings impacts of platform migration and decommissioning? And how can such a complex transition be efficiently managed?
At Cartesian, we have been helping carriers through this complex technology transition. In our experience, the best approach is a holistic one, which involves:
- Data reconciliation that cleanses and transforms billing, provisioning, and network inventory data to deliver a comprehensive and multi-faceted view of your legacy platform estate;
- Advanced analytics for an end-to-end approach to churn management, looking at customer characteristics and segmentation, as well as customer behaviors and impacting events to develop strategies to proactively increase customer retention during platform transition;
- Product lifecycle management to retire legacy products and migrate customers to new offers, including mapping legacy products to appropriate substitutes while minimizing the impact on customers;
- Access and interconnect planning to support clients as they acquire new access services, including managing supplier carriers during the transition and evaluating the optimal “future state” interconnect footprint, and;
- Customer migration strategy to build and manage comprehensive plans to migrate customers away from legacy infrastructure, with minimal disruption to customers and operations. This includes cost, benefit, and timeline evaluation and all aspects of the implementation, from customer notification arrangements to replacement agreements, network rationalization, and legacy assets decommissioning.<>
With this comprehensive approach, Cartesian has helped clients reduce OPEX by recognizing where, when, and how to decommission assets and migrate from legacy platforms. Contact us.