The telecom sector is facing a paradoxical mix of circumstances. On one hand it provides the mission-critical technology platform for innovation, growth and disruption across nearly every industry; whilst on the other hand, it faces enormous changes and disruptions to its own traditional business model and revenue streams, more so than perhaps any other sector.
Furthermore, the average revenue per user, across the entire global telecom industry, is falling every year.
The telecom sector provides the platform for innovation and disruption across nearly every industry, yet faces the challenge of innovation and disruption itself, perhaps more so than any other sector.
Incumbent telecom providers need not be the victims of disruption and reducing revenues in their own industry; they can be the agents of change and disruption, by recognizing (or even creating) shifts in the market, differentiation and moving faster than their competitors to meet the new market dynamics.
Recognition of new trends, agility and speed of execution are critical factors. Reinventing business models, bringing new offerings and services to market must be done in quick time. A major factor, once new offerings are selected, is how quickly billing systems can be adapted to facilitate new offerings, bundles with new services and pricing plans. Billing is so often the Achilles heel in the telecom world.
Differentiation between Telecom providers can be achieved by bundling complementary or value-adding services or offerings with standard telecom services. This can often be achieved through partnerships with service providers outside the traditional telecom sector.
A significant disruption (or opportunity) for the telecoms sector is its convergence with other on-line service providers. Telecom services are now being successfully integrated and sold by the I.T. industry, managed service providers (MSPs) and other service sales businesses. Electricity companies are bundling telecom services such as broadband with their offerings. Cloud software businesses are also selling and bundling telecom services. Phones and computers are now one and the same.
Billing is so often the Achilles heal in the telecom world.
Bundling different yet complementary service types under a single pricing plan, on a single invoice makes it more difficult for competitors to undercut pricing with only a single service type. Service bundling is said to make telecom customers more “sticky” and provide differentiation.
Rather than competing with and resisting new convergent players in the sector, some telecom providers are actively embracing and pro-actively driving this convergence. A prime example in New Zealand, is Spark Wholesale that offers a range of telecom services to its clients, to enable them to sell telecom services under their own branding, giving Spark access to more customers and markets that it might not otherwise be able to reach.
Wholesale telecom providers enable service businesses, such as Managed Service Providers (MSPs) – who have trusted adviser status with their customers, to market and sell telecom services such as broadband, SIP, VoIP and mobile offerings to predominantly business customers.
Telecom resellers require specialized automated usage-billing solutions. Datagate is an agile, white-label, cloud-based billing solution which partners with Wholesale Telcos to get new telecom re-sellers up and running quickly, with billing functionality that integrates with the Telco’s usage data to rate, produce and distribute invoices to their end customers. Datagate can connect to and bill most usage-based services and make it easy for convergent bundling of service types, where multiple service types are combined on a single invoice.
Embracing new business models, new offerings, partnerships, agility and speed to market are the key requirements for success in the telecom sector of this new disruptive, paradoxical world.
Mark Loveys 