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The future communications service provider

The future communications service provider (CSP) is being defined by
the disruption of the established value chains and business models.

Overview


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.

Five Key Dimensions of CSP Business Transformation- Infographic

Five Key Dimensions of CSP Business Transformation—Infographic
The model for success for CSPs in today's world entails a fundamental transformation in how they operate their businesses in five key dimensions.

View the Infographic

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Key Findings

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

  1. The Perfect Storm: colliding pressure systems of revenue and cost
    CSPs are facing colliding economic headwinds that are accelerating a divergence between revenue and cost.
  2. The “100 Percent Data” Environment: A major threat to differentiation
    Customers want faster access and richer services, but justifying ROI remains a challenge.

  3. The New Face of Competition: The rise of the superplatforms
    The next wave of CSP competition will look very different from the last one.

  4. The Digital Customer: always in the channel
    Tomorrow’s opportunity for CSPs will be in making sense of the new digital customer.

  5. 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.

  6. Government: roiling the waters with new opportunities and requirements
    Government policies will focus on both increasing and restricting competition, depending on country priorities.

  7. Out of Footprint: consolidation and globalization
    Size will matter, and the future of the communications industry may well be out of footprint.

Analysis

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

  1. 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

  2. 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

  3. Approach to Digital Customer Engagement: social, segmented, seamless

    • Engage the #Customer

    • Have a clear digital strategy

    • Deliver the seamless omni-channel experience

  4. 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

  5. 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.

Authors

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.