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How a telecom company can succeed in the era of globalization and conglomeration

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Contrary to popular belief, telecommunication did not actually begin when Alexander Bell invented of the telephone. Credit is due to our earliest ancestors on the savannah of Africa, who used smoke signals and drum beats to convey information to people often dozens of miles away (after all, ‘telecommunication’ is any communication that takes place at a distance).

Nonetheless, both the telephone the telegraph made communication far more precise and achievable at greater distances — not to mention more accessible to the masses — than ever imagined. These technologies are the progenitors of our current telecommunication paradigm that allows us to communicate with anyone on the planet instantaneously.

The modern telecom landscape has come to be defined by conglomeration and globalization. In 2017 alone, global merger & acquisition activity in the technology, media, and telecom industry totaled nearly half a trillion dollars. Telecom giants are absorbing other giants, rendering the whole landscape as being dominated by only a handful of behemoths with broad influence.

Not only does this make it nearly impossible for new players to emerge, it also creates an “illiquidity” problem when it comes to customers shifting loyalties. This means the only option companies have for achieving growth is to provide new or enhanced value.

The result is further rampant merger and acquisition activity and a crucial need to globalize media delivery systems. While M&As offer companies numerous strategic advantages, the burden they create on development and back-end teams to normalize and unify systems and processes is enormous. Worse, there’s no way to guarantee that globalization efforts will give any company a competitive advantage.

Nonetheless, there are few steps telecom companies can take to succeed in the era of conglomeration and globalization.

Optimize Delivery and Reduce Time-to-Market

Perhaps the word ‘globalization’ conjures the image of legions of people descending upon the remotest reaches of the planet: to set up the infrastructure, to develop software, to provide customer service support, etc. Most telecom companies probably assume they need to make massive amounts of hires in order to execute this.

But while it may seem like globalization requires a great deal of investment on new personnel and new resources, this is a fallacy. It may seem counterintuitive, but the right approach to globalization is likely to enable your team to run more efficiently — all while achieving a much broader reach.

No matter how globally a company’s plans to expand, reducing the time it takes to bring new products to market should always be at the top of the mind. When it comes to digital products, one approach is to invest in middleware or SDK solutions. Middleware acts as a sort of bridge between disparate systems, networks, or applications.

The level of efficiency this brings to a project means that a new product makes it market sooner, thanks to data and communication sharing between a company and the partners it works with on developing and deploying a new product.

The most ambitious time-to-market benchmarks may require new software to be developed. In these situations, development teams are aided greatly by solutions that leverage SDKs. Rather than building from scratch, SDKs give developing teams all the tools they need to create software-related solutions that could cut the time it takes to get a new digital product considerably.

It goes without saying, but setting ambitious deadlines and sticking to them will ensure that there are limited wasted resources when rolling out a new digital product. Unexpected challenges do arise that complicate the launch of a product, but if the team is committed to sticking to set deadlines, potentially delaying challenges are far easier overcome.

Find New Streams of Income and Ways to Drive Down Costs

When two telecom companies make the decision to merge into one, among the most attractive results is having access to a larger pool of customers that can help bring more revenue into the company. But what is often overlooked is the fact that there is new value created by two (or more) companies coming together. The resulting enhanced capabilities and added value are often potent enough to draw customers from another telecom giant.

Consider, for example, that company A has an outstanding sales approach and customer service record, while company B has developed the most cutting edge fiber optic technology. A merger between the two companies creates a top tier organization that not only knows how to acquire and retain customers, but also deliver an unparalleled product.

Perhaps there is a company C that also has a competitive fiber optic network — but the customer service is absolutely abysmal; in fact, many of its customers are just waiting for a new player to emerge that can deliver topline technology while also treating them well. It’s very likely, then, that the merger between companies A and B will result in a new wave of customers coming from company C.

But apart from attracting new customers, mergers and acquisitions provide other opportunities for a healthier balance sheet. It makes sense to leverage machine learning and artificial intelligence to seek out inefficiencies as well as new opportunities when a company finds itself in a new territory or with the enhanced capabilities that come with bringing two companies together.

Machine learning can be used to perform predictive maintenance on the technical components within a service area — especially cell phone towers — and companies like Verizon and AT&T are already finding considerable success with these capabilities. To identify and resolve mechanical problems within a telecom infrastructure without human intervention has enormous savings potential for any telecom company.

Predictive systems can be used to manage customer retention, which is of critical concern as telecom companies in developed countries struggle to grow their customer base. With a scarcity of new consumers entering the market (and with existing ones passing away) among the few things companies do have control over are the factors that would drive a person to cancel a subscription and sign on with a competitor. That’s where cognitive sciences and behavioral analysis come into play.

It’s a bit controversial — and perhaps now even more so in the age of GDPR — but if telecom companies have a way of identifying which behaviors signal a customer might be thinking about leaving the company, they would have a much better chance of keeping that customer on board.

Be Ready for 5G and the Era of ‘Everything Mobile’

It may seem like 4G (and even 4.5G) just got here, but 5G has already arrived in countries like Finland and Estonia. This matters because it creates new possibilities in terms of additional value and enhanced services telecom companies and their partners can provide telecom customers. In fact, the emergence of 5G will bring us into a new era: the “Everything Mobile” era.

Read More: How we got to 5G and what it means

With “Everything Mobile,” requirements for mobile networks become more diverse than ever. While latency in a 4G network is about half that of a 3G network, it’s still not low enough to accommodate such things as self-driving cars. It’s exciting to think about the way such emerging technologies could change our world for the better, but these kind of developments would require a 5G network.

By early 2019, 5G technology will be commercially available to a much broader swath of telecom consumers, and it will deliver internet browsing speeds that are remarkably faster than what most people currently experience. In fact, recent tests by Qualcomm suggest that median browsing speeds for a 5G user could be as much as 10 times faster than the median browsing speeds for a 4G user.

For a company expanding its global reach or merging with another, the emergence of 5G has to be at the top of the mind. Even if we are a few years out from 5G being the standard everywhere in the developed world, telecom consumers will quickly become wise to this technology and will demand that their provider offers it. If not, they will likely shift their loyalties to a telecom provider who can. Time is of the essence.

We’ve come a long way since Alexander Graham Bell told Mr. Watson that he wanted to see him on the world’s first telephone call. We’ve come even further from conveying simple messages using smoke signals on the plains of Africa.

Surely our ancestors would be amazed by the capabilities of our modern telecommunications paradigm — one, to be sure, that is incredibly competitive and consolidated. Nonetheless, any telecom company will find success in this environment by making these points a priority.

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Mateusz Przepiórkowski
Mateusz Przepiórkowski is the VP, Head of Media and Communications at intive. He is an entrepreneurial executive with 10+ years of international sales and business development experience across media, telecom, finance and high-tech/IoT industries.