Cologne, Germany, 12 June 2018 – As operators look to cut their costs, Iskratel’s Strategy and Business Development Director has today cautioned them against simply looking at the price tag of equipment, warning that cheaper items could end up costing between 300% and 800% more than the initial capex saving.
Speaking on the opening day of ANGA COM, Janez Öri highlighted how operators could find themselves locked-in and left behind with inferior, non-upgradable technology if they buy cheap, thus missing out on introducing new revenue-generating services. Instead, he recommended investing in software programmable hardware.
“To remain competitive with their Tier-1 rivals, Tier-2 operators are continuously forced to upgrade their equipment and vendors are exploiting this by offering initial capex discounts as a way to make a profit off the back of operators,” said Öri. “This is what we call the ‘low-capex trap’ which sees operators stuck in a cycle of buying cheap ACIS-based, non-upgradable hardware before seeing a return on their previous investment – barely keeping them afloat, let alone positioning them to outperform their Tier-1 rivals.
“While operators may save an initial 10% when buying cheap, this will soon back fire as increased OpEx and rising TCO decreases operators’ ability to keep up with demand.”
According to Öri, operators can avoid the trap by adopting an approach which considers their TCO throughout the expected lifecycle of the equipment, avoiding vendor lock-in, maintaining a fixed cost structure for a five-year period and allowing them to easily introduce new services across generations of equipment – making them consistently profitable and competitive.
“By investing in programmable hardware, which is easily software-upgradable for future needs, services and protocols, operators can reduce 70% of operational and maintenance costs throughout the prolonged lifecycle of their equipment, positioning them to outperform their competitors in service, quality and price,” added Öri.
The themes raised by Öri during ANGA COM are also the subject of a new white paper ‘Low-Capex Trap: Save 10% Now – Pay Double in Five Years’, released today by Iskratel.
The paper explores the different routes operators can take to prolong their assets as they age and maintain a fixed cost-structure, allowing them to painlessly introduce new services as consumer demand grows, while stabilising their long-term TCO.
Iskratel’s own solutions against the ‘low-capex trap’, which are based on programmable network processors and upgradable equipment, will be showcased at ANGA COM 2018, in Cologne, Germany, at stand N60, Hall 8, from Tuesday, June 12 to Thursday, June 14.
For more information, please visit: https://www.iskratel.com/en/company/events/anga-com-2018.
To read the white paper in full and to find out more about Iskratel’s journey to network transformation, please visit: https://www.iskratel.com/en/whitepaper/lowcapextrap.