Powerbox Australia Blog

The Challenges and Opportunities for Modern Telco Companies

Written by Powerbox | 15-Jun-2018 02:19:59

In the telecommunications industry, technology has been evolving at breakneck speed. And customer demands continue to keep pace with these massive changes. But the telco industry’s unique history has left many telco companies with highly complex structures. That means that some telco companies are being slow to innovate, which leads to a loss in market share when competitors embrace cutting-edge technology and solutions.

Telcos are seeing continued pressure and eroding margins as consumers migrate to the latest and greatest technologies. While telcos were once guaranteed a market for voice calls and SMS messages, OTT companies like Facebook, WhatsApp, Skype, and Facetime have swooped in, replacing the need for text and voice calling for many people.

But the need for mobile data is soaring, and telcos that can pivot and offer a range of data packages at different price points are perfectly positioned to attract new customers. Traditional telcos must embrace innovation to remain relevant. The challenge? Telecommunication companies usually lack the fast-paced, entrepreneurial, and young culture seen in Google, Twitter, or Facebook. This means a telco company will often need to team up with a newer entrant in order to remain competitive.

It has already been ten years since the first touchscreen smartphone was launched. Since then, mobile customers have become even more connected, with over three-quarters of Australians already on a 4G network. This hunger for even more data is shaping consumer’s expectation for larger mobile data plans and better quality networks- for an increasingly lower price.

88% of Australians owned a smartphone in 2017, and the biggest growth is from older users, with 55-64-year-olds increasing by five points and 65-75-year-olds increasing by nine points.

For the average person, consuming content on their smartphone is the new norm, with live TV and streaming video increasing all the time. While some operators are offering packages to help meet this increasing demand for data, 43% of Australians often exceed their data packages. This indicates that modern telco companies have a large opportunity to attract customers by offering a variety of larger data packages.

Today, telcos collect massive amounts of data about consumers. From the location of their consumers, to where they live, the content they consume, the people they interact with, and the things they buy.

For today’s telco companies, unearthing new revenue streams will be critical. One of the best ways to do this? By using their data and building new businesses. As we see profit margins shrink in the telecommunications industry, the defining characteristic of successful telcos will be whether they can do something fundamentally different to their competitors, and their core business. It’s likely that this will involve leveraging the data they hold.

The Internet of Things also represents a massive opportunity for telcos to collaborate with manufacturers. These include partnerships with automotive manufacturers as autonomous cars are developed. The IoT is just one more route to market for innovative telco businesses.

The digital revolution has presented telcos with a number of disruptive forces that can also be used to scale their businesses. Telecommunications companies that embrace change and harness these forces will be able to successfully compete with new entrants.

Telcos will also need to find ways to grow their businesses sustainably, decreasing operating cost and attracting customers with a “green” culture. If you’d like to learn how you can make the switch to hybrid power, get in touch today.