Customer-centricity for Telco growth
The global 5G services market grew from $40 billion in 2021 to $95 billion in 2022 with 137.5% CAGR. The global eSIM market is expected to see a 21.41% CAGR from 2022-2027. All this combines to incentivise telcos to build a digital brand aligned with their target customer.
We’ll explore how big and small telcos typically differ in their approach to building digital brands, when a greenfield or legacy approach is most appropriate, and why leveraging a SaaS cloud-based solution can help them quickly and efficiently launch a digital brand.
Let’s start out by looking at some of the market forces taking shape in a couple evolving regions and how this can affect the digital brand strategies of both the incumbent large telco players and their smaller, more nimble rivals.
The Asia-Pacific (APAC) consumer market is seeing an increase in the consumer segment's mobile data demand due to the rise in video consumption, the proliferation of mobile gaming, and increased usage of high-bandwidth applications. This is causing Big Telcos to focus on 5G infrastructure upgrades and developing gaming industry partnerships to retain market share in the consumer market.
Meanwhile, Big Telco sees growth potential on the enterprise side as businesses embrace 5G technology advances that can improve their operating models and drive better ROIs in industries like mining, warehousing and Industry 4.0 manufacturing. With an expected 83% increase in enterprise service growth by 2025, this is the area legacy carriers are most likely to marshal their resources.
For the Innovators there is heavy competition, but with the larger entities focused on areas other than their core mobile service offerings, there may be more of a chance for newcomers to develop targeted consumer niches with a digital branding scheme.
In Europe recent discussions have been around industry consolidation. Given the significant infrastructure development costs required to roll out 5G, there may be too many players to support that kind of investment commitment.
As a result, this market could be ripe for smaller entrants to launch their digital brands to capture market share from the major telcos focused on M&A activity.
Let’s now look at the different approaches Big Telcos take and how that differs from their Innovator competitors.
The big, incumbent telecommunications companies have a long operating history, where they are the dominant player in the market. Their brand is well-known. Their infrastructure, systems, and operating models often influence the direction they take with future initiatives.
Because they’ve been in existence for decades, physical equipment often requires upgrade. But while replacing older infrastructure with newer is standard operating procedure, shifting to outsourced systems and quickly embracing cutting-edge digital technologies is not typically in their corporate DNA. They tend to take a more methodical approach.
To make their biggest market share gains, they often acquire technologies and new customers through company acquisitions and influencing governmental regulations with targeted lobbying. On the customer side they’ll look to bundle services like cell service, home internet, and TV services to make it harder for customers to switch.
Because they have a successful ongoing operation they don’t wish to risk, they are unlikely to choose a greenfield system upgrade or replacement. They often implement incremental upgrades to their legacy technologies and systems. To drive customer connection, they’ll optimize their website presence and related apps for improved ease of use, leverage their customer service center for personalized when-you-need it support, deliver a network with seamless coverage, so their customers don’t have to worry about where they will or will not have service, and upgrade their technology (5G), so their customers can get the fastest, most useable experience with their wireless device.
If a big telco company wants to launch a new digital brand separate from their core brand, the most likely route for them to take is an outsourced, greenfield approach. Then they get the benefit of both the latest technology untethered from their core systems and infrastructure, and a way to beta test an opportunity with low risk. An outsourced cloud SaaS solution is often the best approach.
While the Big Telco players often dominate the telecommunications landscape, smaller, innovative companies are always looking for an edge to chip away at the Big Telco market share.
The Innovator must do what Big Telco players cannot, because these smaller companies can’t play the same game. The new market entrants have to find ways to quickly scale a business that doesn’t require the billions of dollars Big Telco companies have at their disposal to build their networks over a long period of time.
The Innovator will not be looking at incremental upgrades to an existing telecommunications infrastructure. They’ll be outsourcing as much as possible so they can put their efforts into marketing to deliver a differentiated brand offering to their target customer.
This means their only real option is to outsource much of the infrastructure and operational elements in order to focus on brand-building marketing efforts. Utilizing outsourced digital SaaS systems allow for a more tailored customer experience without requiring a heavy up-front investment. With a lower overhead structure, the Innovator can deliver more value at a more competitive price point.
Many of these companies invest heavily in the marketing of their digital offering. They tie their business to more current trends and areas of affinity and then align their brands with that.
While the telecom market worldwide is ever-changing, the trend of more customer-centric offerings will drive telco growth in the near future.
Whether it’s a Big Telco company looking to solidify their digital brand, or test out a new target market by launching a digital brand off of an acquisition, or a savvy newcomer looking to capitalize on a gap in the market through a rapid digital brand launch, all will require some level of flexibility by leveraging the latest technology tools in order to succeed. Cloud-based SaaS solutions will increasingly play a key role in allowing these companies to launch new digital brand initiatives that align with customer interests and affinity.
triPica’s BSS Solution can help any telecom service provider deliver a digital brand quickly and effectively, without major physical infrastructure upgrades. As a cloud-native system, it can incorporate eSIM and deliver a customer-friendly interface, all *at a reduced cost-to-acquire and cost-to-serve.