Growth Opportunities for Telcos in the New Normal
A couple of weeks ago, we at LHBS, held a one hour webinar outlining what we think are the most interesting opportunities for telco innovation in the New Normal.
This article lists our top 3. Want to know more about these, and other areas of opportunity? Watch the webinar on Telco here:
SOME BACKGROUND
Since the beginning of the pandemic, I and the team at LHBS have been focusing on ‘what happens after’ and have adopted the thought; ‘opening the economy is not the same as restarting the economy.’ Many businesses are focusing on cost cutting and trying to ‘live to fight another day’ in the hopes that demand, curtailed for so many industries, bounces back to normal. In the meantime, operational efficiencies have been the focus for many business leaders.
It has been our belief at LHBS that this is the time to embrace innovation and experimentation as a critical element of business survival and make a choice to invest.
One industry that can benefit from this thinking is telcos. While largely insulated from declining demand, in fact just the opposite, the industry has emerged from the crisis as a lifeline and managed to shed the image of being a ‘dumb pipe’.
It's now the opportunity to ride a very positive wave of a new purpose, not just as a utility, but a valued provider of meaningful services for enterprise and consumers on the go, in the home and in the office.
SOME IDEAS
Here are our top 3 signs of inspiration and opportunities stemming from new demand where mobile providers can innovate and provide new value beyond just the network.
#1: Carefulness in discretionary spending, value and price consciousness, is going to be around for a while. No brand wants the customer to think at the purchase moment of truth, ‘do I really need this right now?’
Inspired by insights: Apple. The luxury brand has not only released a new value segment smartphone but also for the 1st time introduced installment payment plans for purchased devices. ‘Do I really need this right now’ is a valid question when contemplating a 1000 euro + phone when a less expensive alternative will do. ‘Do I really need face recognition and more than one camera?’ Apple has also alleviated a strong barrier to purchase in tough economic times.
Inspiration for telcos: Consider launching or supporting a new value segment tariff and accompanying hardware. Brands that consider themselves as premium might reconsider that positioning and ask themselves ‘at what cost’. Most importantly, value does not have to seem cheap. It’s just an answer to reality.
#2. Cocooning became the new normal for work, entertainment, shopping, education, health and so much more. As inflated anxiety about physical and financial health persists, people will continue to do more things at home, providing a wealth of potential services within the home.
Inspired by insights: Interest in and adoption of smart health has increased during the pandemic and will most likely remain as a valuable service offered potentially by providers. Additionally, according to an EY (1) study, 47% of US consumers claim that educational platforms and services would be attractive and welcome from their providers.
Inspiration for telcos: While mobility has been the backbone of the industry, the home has proven to be an important and emerging market for anything ‘smart’. How might we better service and therefore monetize the home is a question all telcos should be asking themselves and creating new offerings.
#3. 5G and IoT present new opportunities to capitalize on the new technology not in terms of premium bundles for mobile consumers but 5G and IoT enabled rich services for enterprise.
Inspired by insights: Businesses are prioritizing IoT, 5G enabled solutions yet telcos lag in being considered and commissioned as a primary partner. A study by Omdia (2) found that globally, only 21% of enterprise 5G solutions are led by the company's communication service provider (CSP) while in 40% of the projects, enterprise includes their CSP as a secondary supplier, meaning just for providing connectivity.
Inspiration for telcos: This cannot be the second lost opportunity. For years, OTT’s have been leveraging the network to create experiences and companies with multi billion market valuations. While many companies in the industry are focusing on cost cutting and operational efficiencies, 5G enabled services, on a level of sophistication not usually seen, are the opportunity to capture new value, create new revenue streams and new customer segments. The key to success is; an innovation mindset, investment vs. cost thinking, agility and experimentation.
IN CONCLUSION
Economic history has shown that brands and companies that invest and build momentum in a downturn, come out better on the other side. Yes, efficiency and budgetary considerations. Yet often there are opportunities to be found right in the middle of a disruptive crisis.
It's time to combine solving problems with sensing, shaping and seizing opportunities.
(2) Source: https://www.bearingpointbeyond.com/en/industries/5g/5g-enterprise/