Telecommunications

Context

Digital Revolution:

The digital disruption of the telecommunications sector is accelerating.

Technology Enablers:

This revolution has been enabled by technology advances, including:

Mobile devices

• The iPhone and the iPad revolutionised the mobile devices market in the last decade by providing a better user interface and applications on top of communication.

Internet of things

• The ascent of the Internet of Things now enables wearable devices, smart home devices and appliances, driverless vehicles, and connected machinery.

The Cloud

• Computing power is growing exponentially and is accessible remotely.

Broadband

• At the dawn of the millennium, the internet and 3G laid out the foundations of the ongoing digital evolution of the mobile telecommunications sector. 4G followed, and 5G is being implemented.

• Very high-speed fixed broadband networks are also widely available in established markets, especially in metropolitan areas.

Fixed-Mobile Convergence

• Fixed and mobile networks have converged and enabled quad-play offerings.

Change in Consumer Habits and Data Explosion:

Nowadays consumers require continuous and high-speed connectivity, in order to access their digital content and services across devices and any place. As a result, data is ‘snowballing’.

Challenges

Telecommunications operators and equipment manufacturers are therefore faced with formidable challenges:

New Technologies and Services

• Traditional voice and messaging revenues have been declining because of VoIP and IM (although they still represent a large part of turnover)

• Growth is now fuelled by multimedia services provided by OTT players who benefit from better brand recognition and customer satisfaction
  

New Competition

• Technology players have invented new business models, disrupted the value chain, and attracted customers to their ecosystems with innovative services

• The Enterprise market is also very competitive, with new and nimble players offering innovative services such as Cloud, big data, IoT
  

Lower Margins

• The burst in data usage strains the infrastructure but does not provide sufficient revenues opportunities for now (telcos have not found a way to monetise data yet)

• Legacy networks hamper the rapid launch of new services, and yet raising further debt and investing in new infrastructure is difficult and costly

• Profit margins have also declined due to changes in regulation, such as the end of roaming charges in the EU
  

Corporate Development Challenges

• Acquisitions are also a threat, due to industry consolidation and fixed-mobile and TMT convergence

• Tech companies are also ‘luring’ the talented millennium generation to their workforce

• Meanwhile, shareholders require greater transparency and return on investment
  

Security and Privacy Issues

• Security and privacy issues risk are increasing alongside data and IoT usage

Solutions

Digital Innovation

Although a major threat, digitalisation is also a significant opportunity. Telecommunications players need to redefine themselves in order to fend their new competitors, satisfy their customers, and recapture value. They can leverage their key assets:

• A direct access to customers (relationship and payment)

• The connectivity required by numerous new applications and devices

• The data needed to fuel personalised services

We can assist you in your digital innovation and transformation journey.

Corporate Development

This journey will start by envisioning your future.

The possible options range from becoming a full digital services champion to downgrading to a mere network provider.

In the do-nothing option, telecom operators take the risk of becoming wholesalers. After losing their voice and messaging revenues, retail operators would give up their direct contact with consumers due to threats such as OTT services and soft SIMs.

In the extreme opposite option, Communication Service Providers would become digital champions, through an overhaul of their strategy, business model, services, network, capabilities, and corporate culture.

For this scenario to pan out, CSPs would need to benefit from the trust they have earned from their customers, whilst technology giants suffer further setbacks in public opinion (privacy intrusion, loss of data, tax avoidance).

However, it will take a while for public authorities to take drastic actions such as a review of corporate governance and tax regime, or even a forced breakup. In the meantime, technology giants can draw from large cash reserves, whilst CSPs do not benefit from economies of scale across countries and continents.

Thus, an intermediary scenario is more likely, where CSPs will be both data carriers and digital players. For this, they would add to their business a combination of adjacent markets, vertical sectors, and applications.

We can help you comprehend the consumer, competition, and regulation changes, as well as define your strategic vision and select your markets.

We can also assist you with portfolio strategy, shareholder value analysis, and communication.

Organic Growth

Telecom operators need to re-invent themselves in order to compete with OTT players in the digital era. They need to put customers at the heart of their business model and complement their core services (messaging, voice and video calls) with new sources of revenues.

Services and bundles tailored to consumers would increase market share, improve customer satisfaction, and reduce churn.

In the enterprise market, numerous vertical sectors could be addressed:

New services connected to the operators’ networks could include:

Ancillary services enabled by data, analytics, and artificial intelligence could include:

However, operators face monetisation challenges and privacy issues.

We can help you assess the potential of each one of those opportunities, reinvent your business model, and define your innovation and customer strategies.

Organisation Review and Network and Operations Improvement

Telecom operators need to enhance their network and their operations.

• Operators will need to restructure their organisation in order to implement their strategic vision.

• This could include simplifying and digitising sales and marketing in order to reflect their revised portfolio of services.

• Customer service should also be improved by offering a seamless and personalised experience, and by combining the best of digital and face-to-face management.

• In order to offer innovative services and to deal with the increasing demand for data, operators also need to modernise their network through SDN, NFV, and 5G.

• They also need to explore solutions such as network sharing, outsourcing, wholesale services, and the cloud.

• Digital capabilities and resources need to be brought in. A special unit separate from traditional IT may be created in order to spearhead efforts such as Data analytics, DevOps, and Artificial Intelligence.

• For the above to implemented successfully, the corporate culture will need to evolve through a strong HR strategy and change management approach.

We can help you assess and prioritise your network and operations initiative (benefits vs. Capex), and define your implementation and change management programme.

Regulation

Telecom operators must adapt to on-going and new regulatory challenges. To name but a few: net neutrality, GDPR, roaming.

We can help you assess the potential impact of changes in regulation, and adjust your strategy accordingly, as well as your pricing and your business development.
In addition to regulatory strategy reviews, we have also worked in spectrum valuation, licensing, auction design and management.

Transactions

Organic growth may not suffice to implement the chosen strategy.

The rationale for transactions and partnerships include:

Faced with deals of unprecedented complexity, as well as increased scrutiny from shareholders and regulators, telecom operators have to carefully define their deal strategy, assess the target, and prep better and move faster in post-merger integration.

We can help you identify, assess, run, and integrate acquisitions, from large corporates to technology startups… as well as pre-empt deals against you.

We can also help assist you with portfolio management, shareholder value analysis, and communication.

Projects

Corporate Development

• Mobile operator association, strategic recommendations and workshop

Organic Growth

• Mobile operator association, strategic study

• Emerging market mobile operator, design of a new prepaid mobile offer

Transactions

• Commercial due diligence for an investment in metro fibre in Sub-Saharan Africa for an American multinational technology company

• Global Coordinators, market study for the due diligence of a Gabonese telecom operator

• Telecom reseller, assessment and valuation of business plan

Digital Innovation

• Mobile operator association, forecast of the mobile telecom industry

Finance & Planning Excellence

• Indian wireless and wireline telecom operator, corporate planning

• Algerian mobile operator, review of the budget process and tooling

• Global telecommunications service operator, management report creation

Regulation

• Sri Lankan fixed and mobile operator, negotiation with telecom regulator for a single National Backbone Network

• Asian telecom regulator, management of a 3G/4G mobile spectrum auction

Clients

We have worked across the Telecom value chain for incumbents and new entrants, in both established and emerging markets.

We serve:

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