Will operators grow B2B revenue in the next 5 years?
Revenue from business customers may be growing, but it’s hardly racing ahead. Could that be because a focus on IT distracts attention from core services? Analysis of our mobile customers suggests a clear path forward – and shows how to exceed analyst predictions.
Is 3% growth what you want?
It’s the question every operator wants to answer. And, according to Analysys Mason, the answer is ‘yes’. But not by much. In a recent research note, the long-established analyst and consulting firm sounded an optimistic note, basing their predictions on the growth of IT services. True, these haven’t grown as fast as they might, but the firm casts a ‘cautiously optimistic’ note for the future.
One of the issues identified is the decline in traditional revenues – voice, in other words – and the relatively slow pace at which these have been replaced by other services. Revenue has not grown dramatically, yet it hasn’t fallen off a cliff, either. We agree with the optimism, but for different reasons.
Analysys Mason reckons business service revenues have grown at 3% per year, on average, since 2017 – in line, it says, with growth from consumer and wholesale offers. But this figure is for all operators, so covers those with fixed networks, as well as those with mobile (and both) – voice, naturally, has fallen away as a revenue contributor. However, if we focus on mobile-only operators, there’s a rather different story.
Mobile-focused revenues paint a different picture
That’s because pricing for business customers is typically based on a bundle. Checking some of the offers of our customers this week, it’s clear that data dominates – voice isn’t even mentioned as a component. In other words, it’s taken for granted and included. Removing that from the equation also paves the way for growth opportunities.
In the case of these Gintel customers, the mobile offer is augmented with a business unified communications offer – often called a switchboard or a mobile office in some markets – that enables coordination of calls across teams and individual control of availability and so on. Interestingly, this is offered at a fixed price, equivalent to between 5 and 20% of the price of the bundle, depending on which package is selected.
So, straight away, that’s decent uplift over the price of the core connectivity service offer, which provides the potential for growth as you convert business mobile subscribers to business mobile office customer. More importantly, it also offers a platform to add other capabilities – such as Teams voice integration, CRM connectivity, VIP calling policies and so on, all of which add value and can also attract incremental fees.
Build on familiar capabilities
The key here is that these services build on existing capabilities and leverage connectivity that mobile operators already deliver. They do not require a transition to embrace new capabilities that may be less familiar in the IT domain and which, in any event, may be offered by more established rivals.
Rather, they extend core competencies and provide a simple means of increasing ARPU – beyond the 3% Analysys Mason predicts and without the risk of moving into unfamiliar adjacent areas. Yes, IT services offer clear opportunities, but it takes time (and possibly acquisitions) to create growth, as well as resourcing in terms of staff.
Far better, then, to build on something you already have – which also provides a clear path towards securing incremental revenue quickly, while exploring other areas into which you can expand in the future.
So, if you want to know how our customers are outperforming the market and enjoying significant growth from their business customers, why not have a chat with our team? We’ll be happy to share best practice and to show you how you can do the same.