Category: Revenue Enhancement

The Massive Enterprise Opportunity For The Telecom Sector

The telecom industry has historically been focused on individual consumers who consume a bunch of services including voice, video, Internet, and other communication services. But almost every telecom company now finds the B2C market saturated, with little or no scope for differentiation or driving long-term innovation. The current challenges of the B2C market are a great driver to turn towards the B2B landscape to target large-scale enterprise customers to capture a bigger market share and achieve higher revenue.

The enterprise opportunity

Most global telecommunication carriers are largely focused on capturing growth in the consumer segment. But increasingly saturating mobile markets, the constant disruption from OTT providers, and growing price wars have put the B2C market under immense pressure.

Although large enterprise customers already have established, long-term contracts with Cisco, AT&T, Dell, and others for wired connectivity and Microsoft, AWS, Google, and others for cloud connectivity, there is sufficient room for a telecom service provider to provide the backbone for these solutions. This is in addition to the increasing demand for robust connectivity by the small and medium enterprise clients that presents a massive growth opportunity for telecom providers. This is especially evident in today’s post-pandemic age, where almost every business is looking to go digital.

But it’s not just higher growth rates that are enticing; along with growth, telcos also stand the chance of improving their profit margins, especially as digitally-savvy, new-age companies are willing to pay more for modern and differentiated services. As data services act as the foundation on which a broader Information and Communications Technology portfolio can be built, they present a great starting point for telcos to venture into the B2B world via the delivery of Managed, IoT, and unified communications and security services.

The benefits for enterprise customers

In the extremely crowded and competitive telecom market, enterprise customers offer a huge opportunity to drive business-wide transformation. As revenues across the B2C segment slowly stagnate, the B2B market acts as a treasure trove of opportunities, especially in today’s age of hybrid work.

As a massive number of enterprises across the world now leverage the hybrid workplace model to run their business, they find themselves struggling to keep up with the pace of modernization. The presence of outdated legacy systems and siloed tools restrict them from efficiently running their operations, while also hampering the experience employees and customers have with the business.

Although telecom providers have always been laser-focused on consumers to grow revenue through individual and residential services, as the pressure to digitalize intensifies post-pandemic, telecom companies can drive exceptional growth and success by targeting the enterprise customer, allowing them to:

  • Re-architect, refactor or replace complex legacy communications networks and systems
  • Move away from wired networks toward more efficient and scalable wireless options
  • Reduce the cost and complexity of managing rigid systems and bring innovations into the market
  • Enhance the ability of the enterprise network to combat threats while protecting the business, employees, and customers from cyberattacks
  • Improve the speed and efficiency with which enterprises within the business as well as with customers and partners
  • Meet service delivery requests in a way that best meets end-user expectations
The benefits for telcos

Telcos seeking to establish direct and strong relationships with enterprise customers have several reasons to now venture into the B2B market to sell modern and innovative services and fundamentally disrupt existing offerings. Leveraging agile and digital savvy tools can aid in creating new kinds of customer-centric solutions and bring them to market at an unprecedented pace.

Migrating to the B2B space is not only a good way to expand the footprint and enhance digital connectivity; it is also becoming a crucial element of business strategy and operations. Here are 3 reasons why it’s time for telecom companies to leverage the massive enterprise opportunity:

  • Drive innovation across industries: Unlike with individual customers where opportunities for innovation and scalability are limited, with enterprise customers, telcos can drive innovation that scales across industries. Telcos that capitalize on trends like 5G can enable manufacturers to more efficiently support critical applications, energy companies to remotely monitor their grids, healthcare agencies to deliver intelligent healthcare, and more. Other options include seamlessly bringing together M2M, Big Data, and AI to create a new world of business messaging. The ability to scale innovation across industries is a great way to seamlessly expand its footprint in the B2B space and boost revenue.
  • Exploit the as-a-service model: With the demand for SaaS-based offerings constantly surging, the enterprise market offers a great chance for telecom companies to keep up with the demand. As companies across manufacturing, retail, education etc. seek greater connectivity, speed, and efficiency, the as-a-service model is a great way to deliver top-notch cloud, IoT, edge computing, Unified Communications, and other advanced communications services to take the business to the next level.
  • Offer better platforms and bundles: The enterprise market also allows telecom companies to enhance their reach through the delivery of better platforms and bundles. For instance, telecom companies that offer connectivity services to a car manufacturer can also provide bundled services for consumers’ personal devices such as their phones and tablets. These bundled services can not only improve compatibility; they can also streamline the end-user experience.

For an industry that has largely targeted only individual consumers, the enterprise market offers a great opportunity for telcos to expand market share, reach new customers, and drive higher revenue. Although the concept is relatively new, prioritizing digital connectivity to conduct business operations should be a top priority for telecom companies in the coming years, especially as robust connectivity infrastructure has now become the backbone for smooth, resilient, and efficient business execution. Moving to the enterprise can not only aid in maximizing profits; it can also empower telcos to capture the low-hanging fruit and build a framework for continuous evolution and transformation.

 

A Look At Network Virtualization And The Impact On The Telecom Sector

There is intense competition in the telecom sector. Customer expectations have increased.

That’s why telecom operators can no longer afford to use legacy network infrastructure. They are not built for the current type of services. Network infrastructure modernization has become so important in this context. The modern network infrastructure is more resilient and scalable than the legacy infrastructure. It helps prepare telecom operators to thrive in a hyper-competitive space. One way to modernize the network infrastructure is through network virtualization.

Unlike the traditional networks dependent on physical hardware, the virtualized ones deliver the network resources through software. So, operators are able to respond to market changes quickly and with more agility.

In fact, Network Function Virtualization (a kind of network virtualization that allows operators to virtualize specific network resources) is growing so significantly that a study predicts its market size to grow at a CAGR of 22.9% by 2024.

Let’s delve further to understand the impact it could have on the telecom sector.

Impact Of Network Virtualization On The Telecom Sector
  1. Prepares for 5G

There will be 3 billion active 5G subscriptions in Asia and North America by 2024. 5G is expected to be a boon for the connected world we live in right now as it lowers the latency, reduces costs, accelerates the data speed, and reduces battery consumption. Considering that 5G will become a mainstay in the future, operators need to be prepared for it. However, 5G requires flexible and scalable infrastructure, which the monolithic architecture of the legacy network cannot promise. Operators need to virtualize their network architecture to support 5G capabilities. 5G works on the foundational idea of delivering all types of telecom service from anywhere, so it cannot work well with proprietary infrastructure. It works well with a service-based architecture in which multiple software networks are supported. Network virtualization can offer that flexibility. Network slicing is another 5G feature that virtualization could support, i.e., the physical network could be sliced into different virtualized networks to exchange resources efficiently.

  1. Reduces costs

Network virtualization could reduce operation costs by 60%. Legacy network architecture required heavy investments in physical hardware. Operators had to also provision for more hardware investments in the future. Network virtualization is software-based and could potentially solve some of these issues. Operators can save costs on different network resources such as switching, routing, firewalling, etc. They are pooled and delivered through software and only require an IP packet forwarding from the physical network. Operators don’t have to worry about future scalability. The network resources can be scaled up if the demand grows and the capacity to scale up is available.

  1. Provides more agility

Telecom operators can no longer rest on their past innovations for years to generate revenue. They have to innovate to stay agile and meet customer demands. Unfortunately, legacy network architecture cannot support such quick changes. Network virtualization provides that agility. The scalable and elastic nature of network virtualization allows operators to virtualize their hardware resource pool, improve their workflows, and support a range of applications. It helps the operators to launch services quickly and respond to the market changes by reducing the time-to-market.

  1. Improves network security

Network virtualization enables telecom operators to support complex network security needs. As connected devices and data exchanges increase, the need for network security has increased. Legacy networks lack the capability to secure the increasing workload. Network virtualization enables operators to improve network security to safeguard data centres across the world and thus secure the data. Also, considering that technologies such as 5G require network slicing, there’s more network security guarantee. Network slicing separates the network resources. Each of these slices has its own authentication process. So, it’s easier to detect changes in behaviour patterns and traffic and mitigate the security risks accordingly.

  1. Enhances operational efficiency

Network virtualization has become a necessity for operators to enhance their operational efficiency. First, the operators can save time on deploying hardware and other support systems. They also don’t have to follow the legacy processes that, by design, function in silos or rely on the IT team to configure each hardware system manually. Virtualization enables operators to automate the processes, so the teams can quickly deploy solutions to the increasing customer demands and achieve operational efficiency.

Conclusion

Network virtualization is changing the way operators consider business. It has opened more opportunities for operators to keep pace with emerging technologies like 5G and IoT and open a new revenue stream. However, mobile operators need to rethink the network architecture. They need to move away from using monolithic architecture and plan how to deploy it in their organization. A partial or complex overhaul of the network architecture could get complicated. That’s why operators need to work with experts who understand the virtualization model thoroughly and can help them with the transition and leverage the full potential of network virtualization.

 

 

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