Market consolidation

No other marketplace has faced the challenges experienced in the telecommunications sector in the last few years. Many start up organisations borrowed heavily to build networks based on future potential revenues that were predicted to come from business in the booming economy. For many, survival has been the key challenge and consequently, consolidation in both the mobile and fixed line marketplace has been considerable with a handful of players becoming the dominant market forces. The key players are once again the owners of the networks with national carriers, such as BT, remaining dominant in most markets. The mobile sector, although more buoyant, carries the burden of the licensing costs of the 3G service and financers unwilling to lend the money needed to build these new networks.

Refinancing, or better still, reducing debt has been a key objective for all telecommunications organisations in the last two years. With this comes tight cost control on both operational and capital expenditure, which makes setting up new networks a difficult task. For many, raising the cash to do so comes from disposals of minority stake holdings or the disposal of non-core business activities.

With growing demand for next generation mobile networks (3G) and new IP based voice networks, the key for most providers is to hold on to their exiting customers and migrate them on to these new services as they become available.

Managing expenditure

For most companies, the key is to look at more cost effective ways of servicing their existing clients to maximise profits for reinvestment in new networks or customer acquisitions. This comes with the consolidation of two organisations as ‘economies of scale’ allow more clients to be serviced at a lower cost. It can also be achieved within a organisation by using technology more effectively.

Service segmentation is a key strategy for many mobile operators. Once defined, an appropriate type of service for the value of the client can be provided. Introducing self-service through the web and IVR has helped mobile operators make profits in the mass-market sectors such as ‘Pay as you go’ mobile users.

For many providers outsourcing has become another key strategy to help reduce costs. This can be a function, such as IT, or a service such as directory enquires were the margins are lower. With labour as one of the largest costs, many Telco’s have moved customer service operations to offshore locations such as India, making up to a 50% saving on the cost of providing service to their client base.

With all of this attention on reducing costs, many organisations have become internally focused at a time where the key to survival should actually be about market share. To maintain a competitive edge, winning and maintaining clients needs to be the key focus. This is about better service, new products and being financially more competitive. All of these drivers have lead to the complete re-organisation of most companies in this sector and how successfully they adapt to these changes will determine who will survive.

Helping you reduce costs and improve service

Sabio has considerable experience of working within the telecommunications sector. Over the last few years we have worked for many of the UK’s leading Telco’s to help them drive down costs whilst either maintaining or improving their customer service. By using technology more effectively and helping them adopt a ‘service segmentation approach’ we have been able to help companies double the productivity of their current customer service organisations or viewed another way half their costs.

In other areas, such as resourcing, Sabio have helped companies get their headcounts as closely aligned to the service enquires as possible allowing them to remove unnecessary salary costs without effecting service. Finally, becoming pro-active in winning clients or simply collecting debt has become another key strategy that Sabio has helped many telecommunications organisations adopt in-order to operate more effectively.