In order to succeed in today’s troubled economy, telcos need to navigate a series of challenges and emerging trends, while being open to revisiting their business approach.
If navigated properly, these changes impacting telcos can represent an opportunity to generate new revenue streams.
Last week we gave you 3 major issues impacting telcos; this week, here are two more.
1. Accelerating delayering trend, leading to the end of the "integrated telco" era1
Telcos have spent decades building an integrated model that delivers highly reliable end-to-end services.
The integrated era is over. Whilst there lies various untapped value at the core of an integrated telco’s operations, it’s unlikely that it will prove to be sufficient.
For that reason, many executives are considering delayering - an organizational overhaul that separates certain activities into independent units2.
Technology is enabling integrated telcos to delayer into infrastructure and services businesses giving rise to new models. Four distinct arenas are emerging, each with its own playbook: infrastructure, services, platforms and specific industry needs3.
Delayering helps management focus their attention and expertise on growth opportunities that are easy to capture. It involves the careful organization of activities to maximize the chances of growth by clustering together those that have similarities.
2. Telcos forced to evolve business models4 in response to other external forces
Even though big tech has taken a large bite of telco’s potential markets and revenues have stagnated, there is still enormous value for telcos to leverage. This requires evolving and adopting new business models to put their companies in a strong position for the future.
Telcos are now focusing on offering a diverse range of product bundles and third-party services that meet various customer needs, as opposed to offering only speed and network coverage5.
With customers wanting to spend as little as possible, value-driven telcos compete on low prices, offering concentrated coverage, narrow product lines, and self-service options6.
Providing highly efficient connectivity, telecom infrastructure companies are able to resell their assets freely and raise the utilization rate of their networks, creating value to all parties involved.
Many telcos are held back by their costly infrastructure, giving rise to asset-light telcos that are able to earn profits through various services that cover the costs of network rents, experiencing a substantial reduction in costs and overheads7.
With digital economies on the rise, telcos have an opportunity to configure their capabilities to be better suited for digital companies, and this will involve forging strong partnerships with digital leaders.
The movement towards a digital-first future has lowered barriers to entry, allowing telcos to immerse themselves in new technologies such as IoT, edge and cloud computing becoming digital players.
Telco One
There are a number of strategies that MSPs are starting to adopt in order to tackle these rising external factors. Streamlining processes through automation is becoming a clear tactic when looking to reduce costs and improve operational efficiency.
With MSPs under pressure to optimize their business models. CloudSense looks to address these challenges with Telco One. As an end-to-end solution that optimizes and future-proofs every stage of the concept-to-cash lifecycle, CloudSense makes selling quick and easy, with an implementation that is faster, lower risk and less costly than ever before.
Sources: 1, Bain & Co; 2, McKinsey, 2023; 3, Bain &Co; 4, Telecoms Tech News, 2021; 5, McKinsey, 2022; 6, Telecoms Tech News, 2021; 7, Gamma Unify
