Re-thinking the Service Provider

originally written in October 2012 – updated in April 2015 due to the development of a dynamic industry
At a recent presentation to telcos in Asia I asked them the question, “are you a carrier, an operator or a service provider?”

It was a naive question but with a mixed audience it seemed to strike a nerve. Perhaps they were just being polite and in a public forum it was difficult to explore the question to any depth. So let’s tackle it now …

The challenge that I see for many telecom companies is that they have been used to relatively stable profit levels whilst maintaining good growth. Whilst growth is definitely slowing across the industry the predictable and stable profit level acts as a deterrent to new business models. However many of them have understood the burning platform and are rapidly moving to do something about it. [since I originally wrote this article the trend towards telcos building digital businesses has accelerated] This article discusses one potential response.

What was once a strength in telecom companies, the vertical integration of the network, its operations and the products it sells to end customers, now seems less of a compelling argument for success than it once was.

The customer in 2012 is much more knowledgeable and more demanding. They have more sophisticated tastes in digital products (not all of them perhaps but eventually they will all get to be digital sophisticates). Supermarket chains and post office monopolies are exploiting their brands and supply chains to make incursions into telco (MVNO) territory, so where does this leave the telcos?

I’d suggest one approach is the “digital supermarket”. You have no idea what product is going to be a big seller (perhaps advanced analytics can tell you, but predicting sales has never been an exact science) so why not “stock” a little bit of everything and aim to make a little bit from everything in terms of profit. After all “stocking” digital products may not be as onerous or as expensive as the physical goods …

How about selling a digital concierge service – sounds great. I call my telco and they provide me with a personal assistant for some small monthly sum that books movie tickets, dinners, travel, etc. This is (perhaps) a flippant example but the thinking around delivering exceptional digital service is an idea that many telcos are now embracing [re-wrote this based on recent customer experience focus I have seen].

Re-think every interaction as an opportunity to be of service. One example [from 2012] is that my telco offers me a voice mail service where a real person answers the phone and takes down a message. I suspect that the cost is significant and they might like to scrap it. Don’t scrap it – turn it into that concierge service I mentioned before. Ask “and is there anything else you’d like?”

A million ideas and not all of them are great ideas – but the key is the ability to experiment quickly and cheaply to make mistakes fast but also make success happen fast.

Re-stack the shelves … every day … twice a day … every hour … every minute.

Advertisements

2 Comments

  1. interesting take on the telco model. Being in sales in the telco industry – sometimes us insiders say it is a race to zero. Soon we will be paying our customers to use our services (sarcasim). What percentage of the marketplace do you think would want a PA for $20 per month?

    Like

    1. @Sasha – it is to avoid the “race to zero” that (I believe) we need to re-think. The PA example was simply that, an example. Another way to look at it is through the eyes of the credit card model – Visa and MC take a small % of each transaction just for using their network, their goal is to open their network up to more transactions. Telcos have a network and can do micro transactions but they currently struggle with balancing volume versus profit per transaction to make the service pay.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s