In this age of digital disruption, it’s easy to write off communications service providers (CSPs), aka telcos as aging dinosaurs, slowly being eaten (fork by fork) by agile mobile operators and over the top (OTT) players like Microsoft (Skype), Google and Facebook (WhatsApp).
These new competitors are encroaching on their customers and markets. But the death knoll may be ringing a bit early, as the traditional carriers can’t be beat when it comes to size and scale. When the Pope comes to town and you need capacity for an anticipated 1.5 million people gathered along a single thoroughfare in downtown Philadelphia, it’s up to CSPs to provide the infrastructure that keeps the photos, videos, messages and connections flowing.
Pope Francis has been causing a stir on the internet ever since he was elected by the papal conclave in March 2013. In case you’ve forgotten, announcing the new Pope is wonderfully dramatic. The cardinals sequester themselves in the Vatican, and the rest of us on the outside are only allowed to view the color of the smoke coming from a special chimney. The smoke is essentially an early version of text messaging, or maybe Internet of Things (internet of fire, anyone?). The black smoke is similar to a sensor telling us “waiting for data”. Once the pope is chosen, the signal goes out in the form of white smoke. And that’s the signal to supercharge your network – because 1.2 billion Catholics are waiting to see who the white-robed person stepping out onto the balcony will be.
Pope Francis’ 2013 election by the conclave – the first in the digital era – caused a noticeable spike in internet usage. Equipment provider Akamai reported that its servers delivered showed a four-fold spike in live streaming traffic between 2:10 pm ET (when the white smoke appeared) and 3:15 pm, when the new pope’s name was announced. Twitter usage spiked as well, hitting a high of 130,000 tweets per minute. While sports events (the Super Bowl hit 150,000 tweets per minute, for example) hold the all-time records for usage spikes, the Pope creates his own internet vortex as he travels the globe.
Given that history, it’s no surprise that carriers take the impending arrival of the Pope seriously. For example, Pope Francis will be visiting Philadelphia, Pennsylvania on September 26, 2015 as part of his North American tour. City planners are expecting more than 1.5 million people to come out to see him, and telcos are expecting all of those people will want to share their experiences over their networks. By way of comparison, just 70,000 attendees at the 2015 Super Bowl used more than 6 terabytes of data over wireless networks in just a few hours. More than 21 times that number of people are expected to turn out when the Pope celebrates Mass on September 27.
As a result, carriers are using Pope Francis’ visit as an opportunity to provide some serious network upgrades. AT&T is investing $23 million and Verizon is investing $20 million in infrastructure improvements, most of which will be permanent upgrades for the city’s network. Improvements include additional cell towers, added capacity underground for subway riders, indoor cell sites and additional antennas, all of which are expected to increase capacity by four to five-fold over what exists today.
Why build out the extra capacity? The Pope’s visit is just one day – is it really worth tens of millions in infrastructure investment? If CSPs want to retain customers (and believe me, they do), network upgrades are vital. In a recent JD Powers study of customer satisfaction among US carriers, “performance and reliability” was deemed the most important factor in determining customer happiness. The same survey showed a strong relationship between customer satisfaction and loyalty. In other words, having a reliable and fast network is important to not just making customers happy, but also for keeping them. This is especially true in mature markets, where the battle for customers is a zero sum game.
As we move towards a digital economy, we’ve come to expect constant and reliable connectivity, no matter the time or place. The challenge for carriers is in building new revenue streams and improving operational efficiency at the same time that they are building out infrastructure in order to keep pace with customer demands for bandwidth.
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