Is the Telecom industry finally surging ahead for growth in 2017?

Is the Telecom industry finally surging ahead for growth in 2017?

Is the Telecom industry finally surging ahead for growth in 2017?

1st of June 2017

The telecommunications market is in a period of transition—with years of declining traditional revenue, dipping average revenue per user, and loss of growth in the B2C sector, many operators are finding themselves wondering where the emerging business opportunities lie. Are there signs of business opportunities on the horizon for Telcos to step up their business growth in 2017?

telecom industry

B2B

The consumer market is growing just at 0.6%; in comparison, the B2B market has been growing at 2.6% annually. For Telcos, B2B services seem to be the ray of hope to propel their growth in 2017.  Just like consumers, businesses have come to expect fine-grained services, unique to their needs. However, while operators have focused their innovations on direct-to-consumer offerings, the needs of enterprise accounts have evolved, and a market opportunity has emerged to cater to these requirements. By re-positioning their offerings, operators can sell more effectively to this growing market, presenting businesses with telecom plans that also encompass workflow management, security, or CRM. By offering these more robust, enterprise-specific plans, operators are assured to distinguish themselves in the B2B growth market.

telecom industry

The Threat of OTT

Operators have also seen revenues plateau or drop because of the proliferation of OTT players. Companies like Google, Skype, and Netflix are increasingly taking market share from more traditional telecom providers, making competing with traditional services impossible.

telecom industry

While a select few telecoms have entered the OTT marketplace through large acquisitions of media companies (such as AT&T’s acquisition of DirecTV), this is not a viable strategy for most telecom companies. Instead, the threat of OTT challenges telecoms to differentiate their services according to their unique tech and market advantages. By offering services more easily bundled into traditional telecom offerings, such as cloud storage, enhanced security, workflow management, or CRM, telecoms can find themselves increasing market share without attempting to compete directly with OTT providers. Additionally, by pivoting instead of competing, telecoms still win—after all, OTT use boosts internet and data usage.

The Rise of 5G

5G is the new trend expected to get off the ground in 2017. The potential of 5G to revolutionize business functions is not lost upon industries like transportation and energy. Moreover, 5G is predicted as the key to the rise of M2M and IoT applications like augmented or virtual reality and autonomous vehicles. Cellular-connected IoT devices alone are expected to create 1.2 billion lines by the year 2020, the equivalent of 15% of global mobile subscriptions! The rise of 5G will enable such data-hungry technologies to thrive, creating a whole new market segment for telecoms. Exploiting the potentials of new technologies could well be the new line of attack for the telecom companies. Vehicle connectivity, for instance, proves this point. In the US from January to March of 2016, connected cars were accountable for 32% of mobile connection net-adds, outpacing tablets (23%) and phones (31%). While telcos set their eyes on exploring new revenue-earning opportunities, collaborations established with these emerging technology players will prove to be viable to make this happen.

References:

http://www.bain.com/publications/articles/how-to-capture-the-b2b-growth-opportunity-in-telecom.aspx
https://www.telco2research.com/articles/EB_growth-strategies-68-operators
http://pages.eiu.com/rs/783-XMC-194/images/Telecoms_in_2017.pdf
http://www.bain.com/publications/articles/how-to-capture-the-b2b-growth-opportunity-in-telecom.aspx
http://www.strategyand.pwc.com/trend/2017-telecommunications-industry-trends
http://www.information-age.com/top-3-telecom-trends-2017-123463558/
http://www.marketsandmarkets.com/PressReleases/over-the-top-ott.asp
http://www.computerweekly.com/opinion/Telecoms-Opportunities-and-challenges-in-2017
https://www.zacks.com/commentary/98170/us-telecom-industry-momentum-to-continue-in-2017
http://www.bmiresearch.com/articles/global-telecoms-key-themes-for-2017
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/overwhelming-ott-telcos-growth-strategy-in-a-digital-world

Rohit Srivastav

Rohit Srivastav

Content Strategist - Manager

Facts aren’t enough, a brand needs to tell stories. Stories that people want to read, share and read again. Stories that deliver on business goals. I am the guy who turns facts into stories.

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CSP to DSP: A Journey of Transformation

CSP to DSP: A Journey of Transformation

CSP to DSP: A Journey of Transformation

9th of March 2017
As mobile technologies have evolved, so has the telecommunications customer base. While ten years ago, customers were looking for little more than access, the ubiquity of smartphones and tablets has created new demands and opportunities that expand the role of the service provider.

Simple one-fits-all service worked in the past, but as technology has evolved, so have customer needs and expectations. A recent IBM study on Generation Z showed that 75 percent of respondents picked a mobile phone or smartphone as their device of choice, and 47 percent said they use their smartphones when shopping in a store. Further, prior to making any purchasing decisions, Generation Z uses their phones to research products and services to compare prices and discounts.

So, as technologies and consumers evolve, CSPs can find themselves left behind, crippled by their legacy systems into offering impersonal plans, leaving current and potential customers unsatisfied.

It is, therefore, becoming increasingly clear that CSPs should strongly consider transforming into DSPs (Digital Service Providers). What distinguishes DSPs is precisely this fine-grained service, and ability to bundle several offerings, such as broadband access, content, and mobile apps.

A DSP is a service provider which has evolved from offering just the core telecom services, to providing broadband access, content, services and mobile apps to its customers.

While this evolution can be challenging, it is a necessity for providers who wish to remain competitive. In order to fully monetize their networks, it is imperative that they offer bundled and nuanced plans to a customer base ready to pay for these features.

But what exactly does it take to transform from a CSP to DSP?

How to evolve from a CSP to a DSP?

Becoming a DSP is about becoming more responsive and adaptable to consumers’ wants and needs around mobile data services. A stellar customer experience – complete with personalized and contextual mobile data offers, real-time usage alerts, unique roaming offers, and everything digital – is central to being successful as a DSP.

The core ingredients of a successful DSP:

  • Subscriber Segmentation Capabilities: A CSP needs to have granular segmentation capabilities based on parameters such as location, age, gender, consumption, device type, and many more. Mobile data needs for each subscriber varies greatly and requires this segmentation for smart offers that increase ARPU. A recent study by The Manifest reveals that of the 511 smartphone users surveyed, almost 40 percent use social media apps frequently – almost four times more than any gaming, communication or messaging apps. However, if we were to consider another context – enterprise customers – we’d find that their aim is to limit their employees’ use on certain social websites while at work and instead promote other services. To cater to these two different segments, an operator must create a customized offer for each.
  • Rich Contextual Data Offer Creation:  CSPs should be able to create offers based on multiple parameters: QoS, apps and content, time, device type, data usage, and subscriber profile, as well as network-centric parameters like congestion, access network, and location.
  • Sponsored Apps and Offers: CSPs can partner with other ecosystem players, like OTT apps or digital services, to offer special promotions or plans that are subsidized by the partner. For example, an operator may offer a plan where video streaming is free from one of their local video partners, to drive consumption of that content.
  • CSPs Own App: A lot of CSPs are choosing this option and urging users to install their native app. Using the app, subscribers can instantly purchase a data pass, or even create their own, based on how much data and validity they want to buy. In addition, users can subscribe to personalized data usage alerts. Subscribers can also elect to set their own bandwidth speeds for data, to manage and even “stretch” their usage.

The transformation of a CSP into a DSP is indeed disruptive, but it is the need of the hour. CSPs need to evolve their legacy systems, molding their business models to stay relevant and profitable in the market.

In the coming times, consumers and their needs will be the driving force of the market. CSPs need to understand this and create valuable offerings and business processes that put consumers at the center. CSPs need to plan ahead of the changing market requirements to beat the curve and relevant to their customers at all times.

Click here to read how Green Com modernizes its mobile network with an Alepo BSS Transformation solution, resulting in 10% higher revenues within just two months of deployment.

Pankaj Garg

Pankaj Garg

Product Owner, Digital BSS

Pankaj Garg is a telecom and FinTech expert with over 14 years of experience in the software industry. Handling digital BSS offerings is among the many hats he wears at Alepo. Always up to speed with the newest advancements in the products he handles, he takes it slow only when he’s road-tripping across India to discover new places.

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