Telcos face a key business challenge – greater competition is bringing down revenues while they are under pressure to invest more to meet customer needs. Over the long term, this is financially unsustainable. Essentially, traditional telco efficiency programs that focus only on cost reduction through analyzing costs and budgets, redesigning processes, and adopting automation are no longer enough in a next-generation world. How can telcos reshape investment to meet changing needs, wherever in the world they operate?
Four key factors are widening the gap between revenues and required investment:
To bridge the gap, operators need to take a new approach, starting with a focus on new metrics. When prioritizing network investments, operators have traditionally focused on metrics such as speed and coverage, as these are seen as vital to customer retention. Although meeting customer needs is crucial, two other critical key performance indicators (KPIs) are now equally important when making investment decisions:
These factors mean that operators need to put in place a new framework to guide spending to ensure ROI. There should be less emphasis on spending reductions and more on targeting investments geographically and over time. This framework should be built on five levers:
Telcos need to rethink their business models and quickly adopt a new, bottom-up, data-driven framework to address the widening gap between stagnant revenues and increasing investments.
That means they need to take a more holistic approach, built from the bottom up and focused on local needs. This will enable them to stay within budgets, better manage costs and deliver for customers.
