No “Dumb Pipe” for these Carriers

The Next Wave of Service Provider Mergers

Service Providers

The recently announced acquisition of Time Warner by AT&T speaks to both the fear of service providers becoming relegated to “dumb pipe” or more simply just communication transport providers and to the importance of content to their subscribers and business. Even with the ever increasing bandwidth of mobile and fixed-line networks to deliver more content, subscribers can’t seem to get enough. With this deal AT&T would add Time Warner's rich content properties including HBO, TNT, TBS, CNN, Turner Sports, Warner Bros. Entertainment, DC Entertainment, and more to its mobile, fixed-line, and video-provider holdings including AT&T Wireless, DirecTV, and U-Verse. Tweet This

This past spring Verizon announced the acquisition of Yahoo which gives it access to valuable advertising technology and sports, news and financial content. These acquisitions, by two of the world’s largest service providers, clearly signal that becoming a “dumb pipe” is not an acceptable fate for them. Indeed, it would be surprising if these moves by AT&T and Verizon were ignored by other service providers. It will be interesting to see what happens with other content providers such as 21 Century Fox, NewsCorp, CBS, Viacom and especially with the next generation of media telecoms like Google, Amazon and Netflix.

While the latest news on the AT&T acquisition of Time Warner is negative in terms of Wall Street reaction by punishing those company stocks and the expected opposition from the US government’s antitrust division (See Wall Street Journal article, “AT&T’s Deal for Time Warner Faces Tough Climate,” 10/24/16), there is no doubt that the announcement has spurred more merger discussions and activity with other industry players to create such powerful, synergistic combinations of media and telecommunications.

With this (pending) acquisition AT&T can better enable its subscribers to have access to premium content literally anytime, anywhere and over any medium (mobile, satellite and fixed line connections). Given the focus on accessibility and delivery of premium content to subscribers we should see a renewed focus on business analytics as well as to assure connectivity and high-quality user experience.

Ultimately, AT&T and Verizon and other service providers want to provide the right services, at the right place, at the right time, with the right experience to their customers.  At the same time, Amazon, Google and Netflix are pushing traditional service providers to perform at web scale. The connected world is evolving at an ever increasing pace with new services, new devices, and new technologies to serve demanding customers who have alternative choices for service providers.  Accordingly, AT&T and Verizon and other service providers are aggressively pursuing virtualization to transform their networks and operations to become more agile and move at the speed of the web.

Service providers are also looking to big data analytics to provide insights into things like subscriber devices and behavior, to understand how their experience effects churn or increases business, into network usage to understand how over-the-top (OTT) services are utilizing network resources, and combining network traffic meta data with billing information and psychographic buying algorithms to understand how subscriber tendencies can be exploited with new service offerings.  They will need high-velocity data to evolve towards the proactive operation of their networks, facilitating on demand services, agile creation and implementation of services, and self-optimizing networks.

To accomplish these goals service providers are looking for answers to these questions:

  • Who is the customer?
  • Where is the customer?
  • What is the customer consuming?
  • How much bandwidth do they need?
  • What is the customer experience?
  • Where will they be next?
  • What will they be doing?


Real-time, carrier-scale data that provides location, device, network, service and experience is the foundation for the big data analytics that service providers like AT&T and Verizon will need to operate at web scale and compete not only with other traditional mobile, fixed line and video but with next-generation providers like Amazon Prime, Google and Netflix. As service providers want to be a one-stop shop for telecommunications carriage, content and intelligence they will need business assurance solutions that provide seamless (and non-disruptive) visibility, insight and security for their networks, services and subscribers.