In February, we’ll be attending the Mobile World Congress, discussing “The future of telco”. In the lead up to the event, our experts have put together a series of articles touching on four key aspects: B2B market potential, new operating models, growth through talent, and the role of AI. In Part 1, Ravi Jayanthi explains how telcos can best monetize emerging growth opportunities in the enterprise segment to remain competitive.    

Companies looking to operate normally today are facing insurmountable obstacles. High geopolitical risks, economic uncertainty, labor shortages, and the realignment of supply chains have forced industries to adapt and readjust almost immediately post-pandemic.

The digital transformation and workforce reinvention required are reshaping demand for information and communications technology (ICT) solutions and are utilizing the rapid evolution of advanced technologies. According to Ericsson and Arthur D. Little, these new digitalization opportunities are providing telecom companies with a significant opportunity in the B2B market to capitalize on the 35% topline growth potential.

But what is needed to grow the B2B telecommunication market and what hurdles do telcos need to overcome to grasp this potential?

Understanding the telecommunications B2B market potential

Before outlining how telcos can succeed in the B2B market, it’s important to understand where the opportunity is coming from.

Due to turbulent market forces, many organizations are already at various stages of:

  • Developing new technological solutions
  • Improving service delivery
  • Increasing operational efficiency
  • Reducing cost
  • Gaining competitive advantage
  • Meeting rising customer expectations

Such digital transformations require ICT solutions that provide integrated connectivity, security for digitally connected devices, data, and applications.

In addition, the rapid evolution of cloud, artificial intelligence (AI), machine learning (ML), and automation technologies are bringing incredible value to businesses. Companies can now aim to provide employees and customers with secure, high speed, reliable, low latency mobile networks with edge computing capabilities.

However, many telecom companies are failing to seize the opportunity presented before them. They’re losing out to forward thinking hyperscale cloud providers (HCP) by relying on outdated systems, processes, and operating models.

What hurdles will telecom companies need to overcome?

To ensure future growth, leaders will need to repackage the intrinsic value of the network with innovative ways to bring extrinsic value to customers. As such, organizations must expand the communication service providers (CSP) operating model from a network to a flexible end-to-end business platform provider. This will expand their role in the value-chain.

But to do that, telecom companies will need to must overcome several obstacles:

  • The lack of industry domain knowledge that’s essential for innovation at the edge and value-based selling
  • The lack of necessary relationships to influence enterprises on their digitalization journey. Many telcos are, therefore, missing out on business-level (vs. connectivity-level) conversations to create relevancy
  • The absence of skills necessary to implement and adopt use cases for enterprises. Adoption is made more complex as there’s a lack of subject matter experts focused on domains and customer ecosystems
  • Many telcos aren’t replicating use cases across enterprises, and therefore fail to amortize the transformation investment
  • There’s an uneven distribution of spectrum assets among CSPs that is hindering large-scale deployment of 5G, and thereby hampering use case adoption
  • Competition from hyperscalers. Their ability to spend the same on telecom infrastructure services as Tier-1 CSPs has enabled them to expand their involvement in the telecom industry/value chain. This includes edge computing and private wireless networks

How can telecoms capitalize on the B2B market opportunity and overcome these challenges?

To cater to new segments and opportunity areas telcos must expand their role. Organizations must transform from simply being a network provider to becoming a service enabler and creator.

This is a complex undertaking to do alone. To be successful, CSPs need to show considerable flexibility in how they deploy innovative business models. This includes working with HCPs and service integrators (SIs) to secure a stake in the B2B market.

Technology works better when it’s built together with partners. Especially, when dealing with a complex ecosystem across a gamut of customer segments, as well as growth areas with varying business outcomes, capabilities, and systems of differentiation. Establishing a rich partnership ecosystem will help both market leaders and aspirants to build a complete portfolio and confidently embark on a journey of scale.

Go-to-market playbook for telecoms to capitalize on the B2B market opportunity

Overcoming the various challenges to transform current ways of working isn’t an easy undertaking. But there are four crucial factors that should be considered in your service strategy and go-to-market (GTM) playbook to help. These are:

  1. B2B2X revenue: Create extrinsic value with an outside-in approach to enterprise customers.
  2. Innovation/GTM: Build a strong partner ecosystem and focus on value-based selling.
  3. Adoption: Simplify use cases for customer adoption and integrate (E2E) their ecosystem within your business.
  4. Scale: Industrialize network engineering and operations – essential to scale at large.

Key takeaways

Telcos can no longer justify network investments for cost efficiency and competitive parity alone. They must focus on creating a path for growth, leveraging technology to shape problems that drive innovation and differentiation.

They need to bring what’s next to life and start thinking outside of the box, building a marketplace that will serve growth. That’s the story of scale that telecom companies need to prioritize in partnership with SIs and HCPs. With boots on the ground, such partners are key to driving growth both through GTM and building out intellectual property.

This will be a significant undertaking. As such, it must be executed in waves to align with market readiness. It will require CXOs to commit to innovation, industry collaboration, and long-term investments. With a growth potential of 35% to the topline through network enabled digitalization, the potential returns are worth the risk.

In Part 2 we go into more detail as to how telecom companies can shift from a CSP to a digital service provider (DSP) operating model.

Get in touch with our experts for more information on how to realize your B2B vision and goals.


Read more from this series

Part 2 – The new telecom operating model: Limitless revenue growth opportunities

Part 3 – Telecoms: Why talent is the next frontier for competitive advantage

Part 4 – Getting value from AI&A in the telecom industry

Ravi Jayanthi

Ravi Jayanthi

Associate Partner

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