Communications service providers (CSPs) globally are facing OTT stagnating revenue and cost squeezes—and seeking out new strategies to reduce costs and reignite growth.
To help our CSP clients make the right decisions on costs, investment and growth, Accenture partnered with Ovum to undertake a cost-benchmarking assessment of 26 global CSPs. The findings make it clear that ad-hoc, piecemeal cost-cutting and unfocused investment in new areas won’t deliver the turnaround in performance that CSPs are seeking.
Top insights for CSP growth
- Profitability continues to decline
- Opportunities vary by CSP type.
Our analysis categories CSPs globally into three segments:
- Emerging Markets
- Global Quad-Play
- Global Content
And, each segment needs to adopt a different focus:
- Emerging Market CSPs on zero-basing spend in G&A
- Global Quad-play CSPs on simplifying Sales
- Global Content CSPs on investing in Networks & IT
"Rotate to the new" is key for digital transformation
In periods of rapid change, a new strategy is required: one that enables companies to act in the face of disruption, confidently. We call this strategy "rotating to the new"—it has four actions, repeated in rotation continuously. This is a perpetual and ongoing change journey—not just a single event.
The first step is to Transform the Core business to tune up the current business and release cash to invest in new growth. Most CSPs are starting this—few have gone further in the journey. This could include using efficiency-enabling technologies to increase profitability. Channeling freed-up investments toward experimentation and making core offerings cheaper and better are great starting points to release funding for reinvestment.
"Growing the Core" requires directing those investments to build new capabilities and activating demand for innovative offerings with existing customers, as well as using that core strength to expand into adjacent markets.
"Scaling the New" is fundamental to find new S-curves of growth—new revenue streams. Spotting and scaling up innovations to replace reduced demand for the core products—and using technology and data to build advanced services and offerings that meet consumer and business customer needs. This means reducing dependence on fixed assets, and monetizing those that are underutilized.
In order to Pivot Wisely from the old revenue streams to the new ones—companies need to bold with corporate and financial restructuring and finding the right pace and timing to shift to new businesses and opportunities.
Improve CSP profitability with emerging technologies
An intelligent enterprise enables CSPs to surgically drive down costs and boost acceleration and quality decision-making across the enterprise. Download the paper to take a deep dive into how analytics, artificial intelligence and robotics can be harnessed to cut costs.