Telecommunications companies have seen their business models undermined, due to disruptive innovations such as 3G, the smartphone and the PCs among others. Yet, Telecommunications companies can create more value on their markets by implementing several different strategies, according to Gilles Négrel.
I/ Gilles Négrel’s Bio
Gilles Négrel is a senior international business executive in the Information and Communications Technology market. He has 20+ years of international management experience in sales, channel and business development working with solution and service providers, in tier-1 leading companies groups such as Orange, Ericsson, Motorola, Avaya and Tellabs. Gilles has proven track record of designing and implementing growth strategies, developing new businesses, strategic alliances, leading multi-million dollar operations and managing large & cross functional teams. Gilles is an Alumnus of the “Ecole Polytechnique” and the Telecom ParisTech. Gilles is married and has two children.
II/ Tip 1: Telecommunications companies can reduce network infrastructure costs
Two large French-based telecommunications players such as SFR and Bouygues have agreed to share their network. This reduces the need to invest in improving their network and reduces the cost of maintaining the existing network as costs are shared.
This first approach accepts the situation as it is and tries to optimize it.
III/ Tip 2: Telecommunications companies must find new clients
But, at a broader level, telecommunications players need to find new revenue streams. How can they maximize their assets? Today, their main asset is client knowledge. Indeed, they know:
- if and when their client is on the network
- where their clients are
- if they know their client’s identity,
- that they can help their clients purchase goods
Based on this, large telecommunications players could be capturing new clients such as advertisements agencies. In fact, large telecommunications players know more about their clients than Google. Large telecommunications clients know:
- where their clients are
- where their client is
- if their client is available or not
Based on this client knowledge, they could provide personalized and context sensitive mobile advertising. This monetizes data and improves the return on investment of advertisement dollars.
IV/ Tip 3: Telecommunications companies must create new services
Another way telecommunications players can secure revenue is to offer payment services. In other words, telecommunications player can take on the role of the Bank. In some parking lots, consumers use their smartphones to pay for parking. The telecommunications operator becomes a bank. In the US, among households with annual incomes of less than $15,000 a year, 28% have no bank account, according to Business Times. Yet significant portion of them have a smartphone.
V/ Gilles Négrel’s tips to Telecommunications companies to create more value
Payment services could bring banking capability to the population segment that doesn’t have a bank account. In addition, in emerging markets, many consumers that have a smartphone do not have a bank account. Again, this kind of innovation could bring banking services to a new customer segment. Gilles believes that the average revenue per user could increase by 10% with this kind of new service. In other words, Telecommunication companies must become partners to their clients all along the purchasing value chain: from need identification to payment.
Finally, telecommunications players will have to preempt new markets. This is a topic I discussed in a following conversation with Gilles.
- For a discussion on how to create value in the Telecommunications industry, please refer here
- For a discussion on how to deal with new disruptive innovations in the Telecommunications industry, please refer here
- For a presentation on how Free disrupted the Telecommunications industry, please refer to Nicolas Bry’s blog here