The downturn in the economy has shed more light on the idea of sharing costs to improve bottom lines, particularly among industries where the respective core business model is in transition. A recent Washington Post article highlights this trend for the broadcast industry — some local Washington D.C. television broadcasters have decided to share news gathering costs, including the cost of a helicopter. Turns out this trend is on the rise among local broadcasters, who see declines in local news viewership and the advertising dollars it generates putting significant financial pressure on their industry. In other words, their core business is in transition. The same could be said for telecom.

Many telcos, particularly small rural carriers, have looked at and implemented cost sharing models. They are sharing everything from switching costs to headend facilities, and even management teams. It’s a smart strategy, especially as regulated revenues continue to come under pressure. That pressure will only intensify in the future as consumer behavior shifts away from regulated services. Sharing costs wherever possible should be explored. “It’s never made a great deal of sense to have 15 cameras at some scheduled news event or ribbon-cutting. This is a good place to start making some [cost cutting] inroads,” the general manger of one of the broadcasters tells the Washington Post. Putting this thought process in a telecom context, couldn’t you replace ‘cameras’ with ‘softswitches’ or ‘VOD servers?’ The reality is among regulated carriers, cost sharing may evolve towards more of a necessity than a choice.

What do you think? Offer some insight into cost sharing scenarios using the comments tool below.

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One thought on “Cost Sharing Shouldn’t Be Ignored

  1. It’s already happening on several levels — at the state level with SDN, INS, WIN, etc. And on regional levels with fiber consortiums that literally scatter the state. You would be hard-pressed to find a midwest telco that isn’t tied into a regional network or is cooperating with neighbor.

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