Nokia Siemens Networks

Finding the upside in the downturn.

Opportunities for CSPs? Even right now?

As the global economic downturn has gathered pace, belts are tightening, with businesses and individuals reassessing their spending needs. For the communications industry, the change in consumer behavior and attitudes has created some interesting challenges – but also new opportunities.

If history tells us anything, organizations that recognize this new consumer landscape, and act decisively, will capitalize on the situation and emerge even stronger.

Value for money

So far, consumers and businesses are continuing to spend on mobile and fixed communications, but the search for best value is heating up. Jessica McArdle, spokesperson for the UK comparison website Top 10 Broadband, explains: “Consumers must reconsider their expenditures and make savings where they can. Savvy households are taking advantage of record low prices for broadband and are switching in increasing numbers.”
 
Mark Newman, an executive at Informa Telecoms and Media Research, looks at the issue from the CSP’s perspective: “Financial issues are already impacting providers,” he says.

There is now great pressure on CSPs to give outstanding value for service in order to retain their subscribers and – with the most attractive service packages – perhaps even gain precious market share.
 
So how can CSPs gain that competitive advantage?

Keith Willets, chairman of the TeleManagement Forum, believes the current financial downturn can provide an opportunity for the industry to catch up with its internet rivals such as Google. At a recent round-table discussion Willets said the global recession could provide what he called “an interesting pause-for-thought. Maybe the recession is a really good thing in that it takes some of the heat out of the competition and gives the telecoms industry a breathing space, if the industry uses the breathing space wisely to go about constructing some kind of open, value-added-service environment where cooperating parts of the ecosystem can do as they do in the Internet world and come together to create a communications environment.”

Striking a much more practical tone, Louise Proddow, Head of Branding & Marcomms at Nokia Siemens Networks, argues that there are three basic steps that all CSPs can take to help them beat the credit crunch: “Reducing loss, improving efficiency and increasing revenue. Those are the three fundamentals we’re working to with our customers right now.”

Each of these three steps opens up opportunities for turning today’s downturn into an upside.

Reducing loss

Addressing the revenue drain from churn is one way to reduce loss, says Proddow, who notes that the cost of acquiring new customers accounts for a growing share of OPEX. To reduce churn, it pays to focus on customer service, showing subscribers that they really do matter.

In a recent project with an established CSP, Nokia Siemens Networks addressed this challenge with a solution that helps them identify and solve subscriber problems on the very first call.

Increasing revenue

Tapping into new revenue sources – from enhanced services such as mobile broadband/TV and VoIP, and targeting new subscribers, especially in emerging markets where billions of people have yet to connect for the first time are providing the potential for growth.

Nokia Siemens Networks recently helped one CSP in South Asia double its subscribers and also more than double its overall revenue, proving that forward-thinking companies dramatically increase revenue.

Improving efficiency

In mobile networks, software, site solutions and the Flexi BTS from Nokia Siemens Networks help improve overall energy efficiency.  Modernization and innovative approaches to network planning and implementation can further drive down costs.

Dramatic reductions in OPEX are not isolated “flukes” but real and repeatable, thanks to energy-efficient products and clear focus on optimizing network efficiency.

Yet one more sure-fire way to improve efficiency is benchmarking – measuring a network’s efficiency against the best in class. Benchmarking and upgrading as necessary, networks can improve efficiency by more than 10%. And more often than not benchmarking can lead to some surprising results. Did you know, for instance, that in some markets price erosion can actually be good for a company’s bottom line?

“The best is yet to come”

Some prominent observers, Professor Leonard Waverman of the London Business School among them, believe that communications can actually drive economic recovery.
 
Waverman and his team have developed the Connectivity Scorecard, which clearly demonstrates that economies across the world – no matter how developed or underdeveloped they may be, can benefit from better connectivity. According to the authors of the Scorecard, “Our research shows strong potential for significant economic gains merely from better use of existing technology. When we consider that even more transformative technology is on the horizon, we find it difficult to believe that any country is “saturated” with ICT. The best of Connectivity is yet to come.”

So it seems that, with the right technologies in place, the communications industry will be in good shape, not only to survive the world economic crisis, but also to help end it.

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