Introduction to network quality arbitrage

Every IP network will at times offer too much quality for too little money, creating an arbitrage opportunity. This presentation gives an introduction to the concept and how network operators can respond.

I have repackaged some content I produced for the CTO and Board of a global telecoms network operator. It introduces the idea of network quality arbitrage, and you can read all about it here.

What high-frequency trading did to financial services, network quality arbitrage does to telecoms. It transfers the profit pool around by engaging with the resource in a smarter and faster way than the resource owner can manage.

I and my colleagues believe that the only credible response for a large operator is to create a new business unit to address this phenomenon. You cannot address this in the present mainstream organisation, as there is a fundamental cultural and incentives misalignment.

The presentation covers:

  • Why network quality arbitrage demands a commercial and technical strategic response.
  • How quality arbitrage leads to a demand-led business model.
  • Why the best response is to create a new quality arbitrage business unit and product model.
  • How to extract the arbitrage with a “polyservice” network.

Your existing equipment vendors and strategic advisors probably aren’t talking about this issue with you. That’s because they generally don’t understand the right questions to ask, let alone have an answer to them.

If you are wondering how you might have a credible answer to this issue on your next investor call, hit ‘reply’ to get in touch.

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