Disruption of the Telecom Business and Operating Model

John McEntee
Jan 7, 2018 · 2 min read

Digital Network Disruption

Having been in the Telecom industry for the past 20 years, I have worked with many providers that needed to radically change their Operating Model to improve competitive position and improve customer experience (CX). Their attempt at transformation started and ended with providing digital products and services over their existing infrastructure and processes. What they sooned realized is that even with the enhanced products and services they were not seeing the results they projected.

Unfortunately, some of these companies did not survive. They either closed the door or were acquired. Moreover, if they were fortunate enough to be purchased, it was not for their internal processes. The acquirer was either a digital native or an established company that has adopted an operating model that was lean and agile. This operating model allowed the company to efficiently integrate the useful assets and discard the rest. The resulting integration effort generated significant operational saving, higher product margin and improved Average Revenue Per User (ARPU). From the customer side, CX increased, and customer churn slowed.

One point to consider, if you are an acquisition target, or a company that is not sure what value would be realized in transforming your operation, you may benefit from a Digital Business Model exercise that identifies the pros and cons of integrating your business processes into a lean and agile operating model. Will you see a reduction in overall operating expense? Will you be able to deliver the services more efficiently? Will your ARPU increase from the current level? Will you be able to identify new digital monetization opportunities? There are additional insights gained but it all starts with a reflection on your current environment.

In my next article, I will discuss how CSP’s can determine if a move to a new operating model will provide the additional value they are seeking.

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