In recent years, telecom companies launching value-added services took somewhat a center stage be it selling music or personalized caller tones, cloud services, or turning themselves into digital solutions and managed service providers. Many of them globally monetized their customer base and launched a full-fledged ICT business. Off late I have also witnessed that ICT service providers started making decisions by considering the value they are going to deliver in stead of just aiming for an increase in ARPU or LTV.
The cloud computing wave worked in telco’s favor to sell core services like connectivity and managed services offerings. Over a decade, I interacted with close to 40 telecom companies globally about launching ‘Telco B2B Marketplace’ to establish a self-service marketplace model as a new channel to sell and support cloud services, and manage services. Today they can be easily classified into three.
- Launched and Committed – Successfully running white label fully automated platform
- Launched and Winded-up – Got the courage to do but showed less commitment and exited due to various reasons
- Fence Sitters – Interested but not prioritized. The major reason given was regional competition is not doing
Until 2020, the Telco B2B Marketplace was a kind of choice to make, however with the introduction of 5G, maturing edge gateway technologies, and significant adoption of cloud and cloud-based IoT applications, it’s not a choice anymore. Global cloud and edge computing companies like Microsoft Azure, Amazon AWS, Google Cloud, Cisco, and IBM, et cetera, have rolled out specialized related services or platforms.
The first wave was due to cloud and now the second wave of 5G+EDGE computing is providing additional ways to realize new revenue streams. Let’s have a look at KPMG research, ‘KPMG research has identified more than US$4.3 Trillion of unlocked value across a number of industries.’ Analysis from KPMG and IDC estimates the combined market across these five sectors (Industrial Manufacturing, Connected Healthcare, Intelligent Transportation, Environmental Monitoring, and Gaming) for 4 defined pillars of 5G + Edge ecosystem Connectivity, Software, Hardware, and Services to be worth more than US$500 billion by 2023. The research shows that Software and Services across 5 industry segments will cater to around 70% of total revenue. That means monetization alone out of connectivity that also with the B2C segment is not enough. KPMG says “The business case for 5G is far stronger in B2B than in B2C.”
The prime reason to emphasize the B2B marketplace platform as the additional channel is to lock new revenue streams for Software & Services business which is a significantly addressable market. Let’s look at the addressable opportunities these two pillars bring in and this will justify the need itself.
- Software – Telcos to provide software licenses to customers, as well as embedded analytics capabilities as analytics for many IoT and other hardware components. As per KPMG, Key Players in this segment are Cloud providers, ERP, and software vendors, remote monitoring solution providers, and specialists in analytics and Big Data.
- Services – KPMG quotes that Managed Services and subscription-based offerings, to businesses and consumers, is a significant and growing market, as organizations digitize and technologies converge. Key players in this segment are System integrators, streaming, and cloud services providers.
Telcos and their ICTs have unique opportunities to accelerate in those areas with blended offerings. Certain keywords like license sales, subscriptions, managed services, software products, cloud, and Edge computing requires many agile systems to support IT & business to march towards commercial success.
Building Blocks for It’s Commercial Success
A sustainable business is all about seeing Commercial Success. KPIs of commercial success changes at different stages of business. Let’s look at what it takes to see commercial success. How Telcos should set-up, organize, and run for commercial success.
- Define Value Proposition and Develop Continuously – Conduct market assessment, create customer focus groups to refine value propositions. Identify the scope of new services and extend service development support to the team.
- Ecosystem Development – Global services are hot selling and always with low margin business. Develop an ecosystem of regional, local application, platform, service developers, and partners to build specialized services.
- GTM Preparation & Execution – Prepare and review GTM elements like Go-to-Market Plan for Launch, Commercial Readiness plan for services and platform, GTM Support and execution strategy, and most important Business KPIs/Metrics for every stage of business.
- Marketing and Communication – Engage with specialized skills in Market Communications Planning, Design & Support execution of Integrated Multi-Media Campaign, Support to conduct customer events for the demo of services and benefits.
- Pre-Sales & Demand Generation – Prepare Marketing Collateral, Provide Specialist Pre-Sales and subject matter expertise, Conduct sales enablement program.
- Services Onboarding – Create testing and integration of ecosystem partners, developers, and their services. Launch at least 2 new services per quarter. Refresh services catalog every 12 to 18 months by retiring services that are not scaling. You may continue to support subscribers and plan for migration.
- Customer Onboarding and Support – Prepare Customer onboarding plan, first focus implementation will be with mid-large scale target segment. Prepare end-user training/support material and conduct training in partnership. While Telcos must leverage the existing L1 support team but L2 support should function with specialized skills in partnership.
- B2B Marketplace Technology Platform – Carefully select marketplace platform technology. A platform is a must for better ROI and TCO for conducting business is significantly optimized. Evaluate platform on four key parameters – Simplified way of services catalog creation and management, comprehensive and flexible service provisioning and orchestration, flexible and lightweight billing engine supporting at a minimum subscription and usage-based billing, APIs for integration.
Above 8 key elements are key for commercial success. Based on business projections there can be overlaps in departmental duties but missing any of the eight elements in actions may cause slow down and take your business off the track. These are my learnings while working with many successful Telco launches, winded up initiatives, and fence-sitter telcos.
5G, edge computing, distributed cloud, IoT platforms, and software applications are bringing a new wave which telecom companies must not miss to monetizing. Telcos who have launched and remain committed to the B2B marketplace channel will reap benefits and extending their offerings using the same.