The trends CSPs are facing offer non-traditional growth prospects and new opportunities that may not have been accessible a few years ago. CSPs should act now to determine their strategy to remain relevant in the converged digital world.
What will the future communications service provider look like in the converged digital world? Like companies in most industries, there are service providers lagging in current performance and there are others who are excelling beyond expectations.
But unlike other industries, the communications industry is facing a new global marketplace dynamic in which industries are overlapping and colliding. Value chains are being redefined and players are competing and collaborating across the traditional boundaries of industry and technology.
This paper, "The Future Communications Service Provider: A Blueprint for Relevance in the Converged Digital World," examines several major trends redefining the communications industry, looks at five key dimensions of a CSP’s business and offers a transformation blueprint of those five key dimensions for CSPs to remain relevant in the converged digital world.
We believe there are a number of major trends causing dramatic change in the communications industry. This paper will examine seven.
Major Trends Redefining the Communications Industry
The “100 Percent Data” Environment: A major threat to differentiation
Customers want faster access and richer services, but justifying ROI remains a challenge.
The New Face of Competition: The rise of the superplatforms
The next wave of CSP competition will look very different from the last one.
The Digital Customer: always in the channel
Tomorrow’s opportunity for CSPs will be in making sense of the new digital customer.
Required to Capture Value: move beyond the core
Winning in new services will require CSPs to up their innovation game and find their ecosystem roles.
Government: roiling the waters with new opportunities and requirements
Government policies will focus on both increasing and restricting competition, depending on country priorities.
Out of Footprint: consolidation and globalization
Size will matter, and the future of the communications industry may well be out of footprint.
We also examine five key dimensions of a CSP’s business and offer a transformation blueprint for CSPs to remain relevant in the converged digital world.
Transformation Agenda for CSPs
The Network of the Future: collaborative, evolved, converged
Evolve networks from dumb pipes to smart pipes
Lay the foundation through collaborative optimization
Increase network intelligence to enable converged experiences
The New CSP Business Model: integrated digital services provider
Reprice future services from ARPU to ARPA
Build a new era of partnerships with OTTs and developers
Transform legacy services from siloed products to integrated experiences
Approach to Digital Customer Engagement: social, segmented, seamless
Engage the #Customer
Have a clear digital strategy
Deliver the seamless omni-channel experience
New Service Focus: invade adjacent markets
Create a services supermarket
Prepare for three phases of CSPs’ cloud journey
Establish Big Data as the new currency of growth
Key to Human Capital: attracting the right mix of leaders and innovators
Cultivate a new cadre of innovators
Rally legacy service leaders to pursue a new core
To innovate in digital services, acquire digital talent
The seven major trends discussed in this paper are fundamentally changing the communications industry–-disrupting established value chains, accelerating the erosion of legacy business models, and posing both challenges and opportunities for new growth prospects.
CSPs need to focus on the fundamental transformation of nearly every aspect of the communications business in order to maintain relevance and differentiation while continuing to retain and expand valuable assets.
The transformation spectrum is broad: At one end the “utility pipe” model focuses on infrastructure and extreme efficiency and at the other end is the “virtual pipe” model focusing on leveraging customer relationships as “marketing-only” companies. In the middle of these two is the “smart pipe” model that creates platforms for innovation, new business models and managed solutions.
While the transformation path of a CSP may take different turns, what’s important is that CSPs take action—now—to decide their strategic intent and the steps needed to get them there. The stakes are high—and so are the consequences of inaction.
Sumit Banerjee is the global Communications Industry practice lead for Accenture Management Consulting.
Tom Loozen is the global Communications Industry practice lead.
Matt Fanno is a senior manager within Accenture’s Communications, Media and Technology Strategy practice, specializing in Digital Content and Services.
Abhinav Saksena is a senior manager within Accenture’s Communications, Media and Technology Strategy practice, specializing in growth and innovation.