Accenture’s Global Communications and Media Industry Lead, Francesco Venturini outlines the challenges—and the incredible opportunities—for the industry to build on its strong heritage and flip to a choice of new growth models.
The industry is being squeezed from all sides. Top-line growth is stalling. Revenues have levelled off. Customers are finding new ways to engage, digitally and digital disruptors are undermining the traditional base of services.
Shift and disruption of value
The commoditized core business isn’t profitable and there’s ongoing substitution with low cost, digital alternatives.
Changing rules of the game
Market boundaries are collapsing and traditional approaches to growth are no longer sufficient. Historic positions of strength are eroding.
The liquid customer is here
Ongoing reduction of customer loyalty. Incumbency is no longer an advantage—CSPs are not an essential part of the users’ daily digital routine.
The telco playbook is outdated
Infrastructure-bound, with vertical integration & siloed operating models. CSPs have unscalable operating & technology models and legacy workforces.
Scaling new growth is a deliberate and perpetual change journey, not a single event
Transform the core business by building more competitive cost structures to improve flexibility, increase profits, and drive up investment capacity.
Grow the core business by redirecting some of that investment capacity to drive incremental growth in the core business.
Scale new business while identifying new sustainable business models which leverage and monetize key control points and scale them (at the risk of core business cannibalization).
Pivot wisely by keeping an eye on pace and balance. The “core” and “new” businesses usually need to co-exist for a substantial period of time.
New models for B2B and B2C growth
Success demands a departure from today’s models and competencies if CSPs are to scale new growth models. In the long term, we see there being two key growth scenarios for CSPS. Each scenario needs distinctively different skills and capabilities, as well as divergent investment priorities and value creation logic.
Connected industry orchestrator
Building the B2B business by connecting industry X.0 with secure, reliable & smart connectivity.
Driven by open APIs and digital management & operations capabilities, specialized network clouds/value added services supported by real-time AI.
Riding on the disruptive trends, the CSP can reinvent itself by updating technology and operating models, adopting new growth models in both B2C and B2B, revisiting competitive positioning and moving to hyper-personalization for customers.