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30 August 2023

Analysys Mason reckons SMEs are underserved. So, where’s the opportunity? Explore Gintelberg and find out!

CSPs of all stripes aspire to deliver the right services to the right market segments at the right time. Their focus has, largely, been on the largest companies, using scale to drive revenue, profit, and growth. But that focus doesn’t really reflect the market at large, as Analysys Mason has noted in a recent report. By directing attention at the largest companies, service providers neglect a significant proportion of the market.

In fact, the working world looks a lot like a place we’re going to call Gintelberg, for want of a better name. Many of us live and work in places like this and it’s where we consume the telco services on offer to us. Bear with us – we’re going to explain all of this later.

However, let’s begin at the beginning and set the context for this discussion. So, let’s start with a fact: the telco market can be lucrative and particularly so the enterprise segment within it. Telcos pursue the latter with good reason – at Gintel, we help them to do so.

There’s an established demand for value-added services because enterprises have different needs to consumers. These can be rewarding and successfully penetrating the segment helps telcos to drive the bottom line.

Now, here’s another fact: Telcos misunderstand the nature of the enterprise market they’re trying to capitalise on and thereby miss an opportunity. Why? Principally, because they struggle to make the actual pieces in the enterprise market fit the opportunity they’ve decided exists and want to serve. This assertion isn’t pulled from thin air. There’s evidence to back up the claim that telcos are misunderstanding the market - so let’s examine it. But this is just one opportunity from the many available.

The enterprise market isn’t balanced.

The global enterprise landscape isn’t evenly balanced between big and small companies (which means the enterprise opportunity for telcos isn’t in balance either). According to research firm Statista, there are roughly 350,000 large companies in the world, those with over 250 employees[1]. In contrast, there are roughly 333 million SMEs, according to the same source[2]

Sifting through this and a mountain of other data related to the characteristics of global enterprises leads us to a couple of stark conclusions. They are:

  • Well over 90% of all businesses can be described as small or medium-sized enterprises (SMEs). Most of these, as we’ll see, are very small indeed, and
  • Roughly 99% of these SMEs have ten or fewer employees.

In short, the enterprise landscape is broadly composed of the following:

  • Some, but in comparative terms very few, enormous companies (great if they’re your customers, but not enough of them to go around!) make up a portion of the market.
  • A reasonable number of middling-sized companies but still not very many in real terms (albeit more than the former giant company category) make up another portion.
  • And lot and lots of what to all intents and purposes amount to small companies make up the remained. In fact, these account for around 99% of the total market.

You can probably see where we’re going with this. Yes, for all sorts of reasons (scale being the obvious one) it makes sense if you’re a telco to pursue the enterprise giants and “larger” companies if you’re seeking to market your enterprise services. But here’s a question: does it makes sense to ignore the smaller ones – the 99%?

That’s not rhetorical, because ignoring the 99% appears to be exactly what many telcos are doing. Don’t take out word for it; learn from Analysys Mason.

Is it a problem?

How do we reach that conclusion? If we look into those smaller businesses in more detail, we find an answer. It’s because most telcos, mobile operators in particular, do not consider a company to be a serviceable enterprise at least in terms of what it sells to it unless the company has 10 or more employees – an observation on which we have reported on numerous occasions.

So, for enterprises smaller than that size (which, as we’ve seen, is the vast majority), while their communications needs may be broadly catered for, it’s generally only as consumers rather than as the enterprises they actually are.

The alarm bells should be ringing because that’s a problem or, if it isn’t, it should be. If not a problem, it’s definitely a missed opportunity.

The 99% of companies (which employ about half the working population in terms of individual users) aren’t accessing or being offered any of the profitable enterprise, value-added services designed for and targeted at other business customers in the market – for one random example, B2B mobile PBX, though it could be anything else.

In other words, what we see is a gap; a chance to sell appealing, likely to be in-demand, tailored enterprise services to a large, underserved market segment because it’s been mis-categorised, misunderstood, and overlooked. A business with fewer than ten employees is still, nevertheless, a business with a need to consume value-added services.


That brings us back to Gintelberg. To underline this point (and better understand the opportunity), let’s look at the facts on the ground as they relate to the sort of typical small business we’re talking about. Remember, we’re not focused on multi-corporates or even mid-sized companies (say, a bank with multiple branches nationally) here; we’re talking about the typical small enterprise present in almost every community, anywhere.

To see and properly understand these companies let’s build some context. We’ll consider an average town. It has a population of around 20,000 and hosts a wide range of businesses - ranging from national brands, chain stores on the High St, a sizeable public sector, a medium-sized hospital, a number of schools, restaurants, hotels, independent retailers and much more. In short, a thriving community. We know this, because it has a local business organisation, which conveniently lists and categorises its members.

This is Gintelberg. But in fact, Gintelberg is not entirely imaginary; it’s a real place – and there are also thousands of towns like this all around the world. So, we can take it to be representative of the issue this blog is addressing.

About half the workforce in Gintelberg is employed by the players we’ve just mentioned; those the enterprise telco market is actively serving (the few global brands and bigger companies, the public sector, schools, and hospitals).

The other half isn’t. That 50% of the working population is engaged by Gintelberg’s SMEs (which include, in addition to those kinds of companies we mentioned earlier, taxi-firms, small marketing agencies, construction enterprises, farmers, smaller law firms, etc.).

These are the firms that the telco industry more or less ignores, at least in terms of leveraging the opportunity to meet their communications needs by delivering enterprise-specific services and thereby generating new, SME-led revenue streams. It’s the one (to ten-) man bands.

The topography here is commonplace. Gintelberg isn’t unique. If anything the opposite, it’s ubiquitous: you can find a version of Gintelberg as described above in almost any country in Europe; a place where there’s a panoply of different businesses of smaller sizes that don’t need complex enterprise telecoms solutions (and haven’t got the resources to manage them anyway) but that do have communications needs that differ from consumers, are unmet, and could be better served, as Analysys Mason noes (and, with the PSTN about to be retired, aren’t going to be served by landlines either).

This brings us to a question: Why are MNOs so static in recognizing, and addressing, this latent opportunity to deliver supply that could meet incipient demand? It’s a question we need to think about because the answer is likely to yield significant profit opportunities.

An opportunity we’ll dig into

For now, that’s as far as we’ll go. Hopefully, this blog has got you thinking. The immediate takeaway is that telcos need to revisit how they look at and respond to the enterprise segment in order to both better meet small enterprise needs and maximise their own bottom lines. In future blogs in this series, we’ll explore what those needs are – and look in more detail at what sort of services could be delivered to address those unmet needs, and how telcos can exploit the opportunities they afford.

Interested in learning more or discussing this subject further right now? Let us know and we’d be happy to chat!



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