& cplSiteName &

Making the Move to Multiple Platforms

Francesco Venturini
11/13/2017
50%
50%

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
Why it makes sense for cable operators to distribute coherent packet-optical technology to the cable network edge.
How subscription streaming video downloads will keep mobile video viewers even more engaged.
5G's speed, latency and improved connectivity will bring a quantum leap to enterprise cloud capabilities for mobile users.
As healthcare, financial services, and education move to multicloud they face different security requirements.
Donald Trump's administration is denying China Mobile a US comms license on security grounds, but there's a much better reason to deny the giant Chinese operator access to the US market.
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Telecom Jargonosaurus Part 1: Repeat Offenders
Iain Morris, News Editor, 7/13/2018
Verizon Taps Malady as Acting CTO
Dan Jones, Mobile Editor, 7/12/2018
Get Off My Wireline Lawn!
Carol Wilson, Editor-at-large, 7/17/2018
Eurobites: EU Socks Google With $5B Monster-Fine for Android Control-Freakery
Paul Rainford, Assistant Editor, Europe, 7/18/2018
Netflix Is Growing, but Don't Ask by How Much
Phil Harvey, US News Editor, 7/16/2018
Animals with Phones
Casual Tuesday Takes On New Meaning Click Here
When you forget your pants.
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