Go Lean or Diversify? Diversification has little extra cost – but the upside is huge!

At the recent Mobile Broadband World, there was some debate around the future strategic choices that mobile operators might make. The debate was framed as a polarised choice between two extremes – go lean, or diversify.

The “go lean” option is akin to the low cost airline model, in which what can be outsourced is outsourced, what costs can be cut are cut and so on. Diversification, on the other hand, involves investing in new services and business opportunities to drive growth.

One speaker from a leading operator commented that, in fact, the diversification option was significantly more attractive. He argued that, once full mobile network coverage has been achieved, the incremental cost of delivering diversified services is low. Therefore, mobile operators with network assets should absolutely seek to launch diversified services that attract higher margins.

We agree. In fact, we don’t see the strategic choice as being binary at all. We think that cost reduction and appropriate lean programmes are fundamental but so too are diversification strategies that can generate higher margins and better returns. It’s not one or the other: it’s both.

That’s why we think mobile network operators should use their unique asset of mobility and comprehensive network coverage to offer enterprise and SME services: it’s a segment that demands more, but which offers more too. Better returns, better margins. And, the incremental cost of launching such services is low.

Better still, with Gintel, once you have deployed an initial service – for example, Mobile PBX, adding new services to complement this is simple, thanks to our unique Easy Composer architecture and service creation capabilities. Once deployed, you can either create your own services or add pre-configured modules to enhance your portfolio.

Choice is good, but it’s better to choose a strategy that promises to yield better opportunities in the future and doesn’t force you into a strategic corner. Cost reduction is fine, but on it’s own, it’s not a strategy for growth: it’s one for protection. We don’t think that’s enough in today’s competitive environment. Instead, investment for diversified services is just as fundamental to build a secure platform for the future. Why not talk to us to find out how you can build a more profitable future?

Want to learn more about Gintel?