Thinking about opportunities – for operators and enterprises

In the past, when we have spoken to operators, they have generally already gone through a process of evaluation to determine their strategic direction and the services they want to deploy. Typically, this means that they have already considered our area of expertise – services for the hosted enterprise market – and decided that they want to invest in these capabilities; the conversation they then have with Gintel is about choosing the best solution or helping to define an RFx.

Recently, however, we have enjoyed more conversations that we would describe as ‘evangelical’ in nature. That is, the operator is searching for ways to enhance its business and has included Gintel in these discussions. This is a privileged position to be in, and the discussions echo many of the dialogues we shared internally when deciding to launch our own product portfolio some years ago. We thought we would share some of these thought processes with you in our latest post.

Everyone knows – or claims to know – that operator enhanced service revenues are forecast to grow rapidly. At every conference we attend, there are multiple charts from different analysts all pointing to the same thing (Does anyone ever check them retrospectively? Perhaps we should hold a sweepstake to see which one wins? Or is that the role of the stock market?). The corollary of this is that basic voice service revenues are predicted to fall significantly. So, the argument goes, operators will have to work harder at the enhanced services to plug the gap and provide engines for growth. Whilst this makes intuitive sense, it conceals a much more complicated picture. It’s not just revenue growth per se that matters, it’s profitable revenue growth. Similarly, operators are clearly not focusing on a single issue: there are other ways of making money than from leveraging core assets, as nimble players have found. But, for the majority of operators, enhanced services are at least part of the solution to the revenue challenge.

Logically speaking, thinking about profitable services – as opposed to just services – should encompass consideration of the different segments that make up a subscriber base: many segments have different spending abilities and correspondingly different profit potential to the operator. One of the core assets available to operators today is the intellectual capital that can be derived from the extent to which this is understood and can be quantified, and there are some significant innovations out there that demonstrate this. It’s abundantly clear to many that the enterprise market has to feature in these deliberations prominently.

There are many reasons for this. Enterprise customers have larger budgets, have demanding needs and the potential to pay for a whole raft of services, provided they can be leveraged and delivered in a straightforward manner. Not only can ARPU be higher in the enterprise, but AMPU – and this takes us back to profit – can also be higher.

So, superficially, the enterprise appears to be an attractive market to address. But, of course, it’s also a demanding one. It’s not enough just to launch and promote a service – it has to meet the rigours of the business environment, exacting SLAs, and so on. It also has to be simple – there’s no point offering something revolutionary if no-one can use it. Most importantly, the benefits need to be clear. It’s probable that there is no single stand out feature that delivers these benefits, but the mix of benefits has to satisfy the range of stakeholders in the enterprise – those who pay the bills, those who manage the infrastructure and those who use it. Satisfying all of these people, all of the time is clearly a challenge.

One service that is gaining a good deal of attention at present is the virtual PaBX. Actually, you can call it a mobile PBX, or even just IP Centrex, but whatever term you adopt, there are some key features and capabilities that are required. Various reports have highlighted the potential of such services, the cost savings they offer, the revenue opportunities for the operator, and the benefits to the enterprise, amongst other things. Indeed, there is some extremely good data available that we use ourselves and respect greatly. But pulling all of these data points together is hard. Yes, we can build a compelling picture, but there’s more to it than that. Behind it all, we need to be able to deliver something that actually helps the operator to realise the vision. In turn, this enables them to directly target the most profitable segments in their market and, having targeted them, to keep enriching the offering to make it even more compelling and rewarding. We all know how opportunities can be missed, or perfect solutions go stale.

That’s where Gintel comes in. We can help operators to build a compelling portfolio of services to target enterprises – starting with virtual PaBX, mobile PBX or IP Centrex, whichever term you prefer – and building on it with a rich and evolving suite of services that help enterprises to achieve consistent utility and value – and the operator ensure a consistent and growing return. Why not talk to us and see how we can help you develop a strategy to address this market? Not only do we have the technical expertise and experience to make product rollout happen, we can also share our insights to help you define what it is you need to achieve in the first place!

Tore Saeter, June 2008

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