& cplSiteName &

Making the Move to Multiple Platforms

Francesco Venturini

Communications service providers (CSPs) are struggling to generate the revenues and growth that have made them successful in the past. Three major factors are converging to create a volatile industry landscape.

First, their core business has become commoditized and is no longer profitable. The traditional sale of data plans, pay-TV packages and/or call minutes is no longer a viable way to make money and foster growth in the long term. A CSP may choose to become a low-cost provider selling plans and packages at the lowest price, but a race to the bottom is a dangerous one to join. And, even if won, there is no assurance it will be a profitable option. Given the uncertainty of success, this choice is not the path that many CSPs should consider when making strategic decisions about the direction of their company.

Second, the barriers to entry have shifted. Businesses today don't need to own their own networks to offer digital services, as shown by the digital native platforms. This has created a new, more diverse competitive playing field. We have seen the digital disruptors change the game and put increasing pressure on CSPs, and this competition is likely to intensify in the future. This leads directly to the third challenge.

This last challenge is the rise of the increasingly demanding customer. Consumers do not behave in the way to which CSPs are accustomed. No longer loyal to brands, consumers have become highly demanding, creating new challenges for the incumbent providers.

Consumers have also become more fluid, moving from service provider to service provider. It doesn't matter to them where they get a service or product from, it is simply about where they get the best experience and value. Consequently, having a true omni-channel offering is a requirement to compete for customers today.

A strategic change of direction
With traditional growth eroding at an alarming rate, CSPs urgently need to reinvent themselves, their business models and the way they operate if they wish to be profitable in the years to come.

Providers are likely to move in one of three different directions: become a low-cost provider, integrate vertically or pursue the model that has the most chance of long-term success -- become a multi-sided platform provider. Choosing the third strategy means moving away from the traditional linear relationship models with suppliers and customers. And it means moving toward a more dynamic one that easily connects an entire value chain through the ability to launch new digital products and services quickly, leveraging open, multi-speed technology architectures.

Such an approach will enable new operating and revenue models across a more diverse and flexible ecosystem, even across industries. That's because the CSPs' goal is to aggregate all the services, such as home security, energy management and video, among others. When done well, these services aren't just taken by existing customers but the ecosystem members will bring their own customers too.

The challenge is, many CSPs don't have the capital available to quickly and dramatically transform their businesses. It is a huge undertaking and one that must be done in the right way, and importantly, at the right time. The journey will be different for each CSP, based on its current business and infrastructure, available capital, talent skill set and business goals.

This change is not just about transforming the back office, but rather a move to digitally enable workforces using analytics, mobility and other modern technologies supported by the cloud, which has a major impact on the front end so that the customer will see dramatic changes. Such a fundamental transformation requires a phased approach.

Taking the right steps to build for future success
The transformation requires a phased approach over four stages:

  • First, transform the core business.
    CSPs must review their existing technology landscape and understand how changes to the operating model can be put into place to generate funding for investment in future growth. For example, there may be processes that can be automated easily, such as billing or within the call center, therefore freeing up cash for the new platform-business.

  • Second, grow the core business.
    CSPs should adopt an analytics approach to better understand their current business. Data will provide the insights to understand how to monetize underutilized assets and, critically, help retain and acquire new customers.

  • Third, start to scale the new business.
    Once these initial steps are in place, the CSP will be operating more efficiently and will have more funds available to invest in the new business model they have bet on. At this stage, they should start scaling their new business and invest by building highly scalable platforms and develop a new ecosystem that will support the platform business of the future.

  • Fourth, find the right time to move.
    Moving to the new business model at the right time is critical. Market conditions and stakeholder expectations fluctuate so it is important that decisions and changes are made at the optimum time.

Ultimately, CSPs should be prepared to sacrifice some profitability in the short term to ensure they are creating a more sustainable business for the future. This requires planning as well as transparency with investors and employees. The successful businesses in the long term will be those that build a model around the customer experience and keep control of the access to it.

— Francesco Venturini, Global Industry Managing Director for Communications & Media Accenture

This is the first in a series of blog posts that will cover the transition to becoming a platform provider.

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from Column
Riverbed's Phil Harris explains how service providers are well positioned to help enterprises discover new business opportunities in IoT and throughout their cloud migration.
With the traditional operator business dying, CSPs must adopt new operating models to deliver digital services.
Protecting the web-scale content user experience lies in utilizing emerging analytics and automation technologies.
Achieving the world's first interoperable 5G New Radio (NR) data connections at 3.5GHz and 28GHz.
As networks extend into the cloud, security and monitoring need to step up their games accordingly, writes Jeff Harris of Ixia.
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
March 22, 2018, Denver, Colorado | Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-16, 2018, Austin Convention Center
All Upcoming Live Events
Hot Topics
MWC 2018 Threatens to Be 5G New Radio Bore
Iain Morris, News Editor, 1/10/2018
Sprint Says No to mmWave, Yes to Mobile 5G
Dan Jones, Mobile Editor, 1/11/2018
Altice USA Embraces Home-Alone Strategy
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/11/2018
Huawei Still Knocking on US Door – but AT&T Deal Thwarted
Ray Le Maistre, International Group Editor, 1/9/2018
Animals with Phones
Customer Support Done Right Click Here
"You've reached 'Who's a Good Boy?' How can I direct your call?"
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed