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04 April 2024

Why does the telco market’s “invisible man” continue to be ignored?

For a long time now, received wisdom has been that there’s a fierce battle for market share being fought in the telco market. That may be true – but why is one potentially sector consistently overlooked?

The telco market has an “invisible man”. It’s called the small office/home office (SoHo) sector. It’s there, it has clearly established needs, and its potential, if properly served, to become a source of much needed revenues is undeniable. And yet…to all intents and purposes the SoHo sector is being, and has long been, ignored and overlooked. We need to talk about this.

It may just be that things are starting to change. At least one analyst firm, UK-based Analysys Mason, is now paying attention to SoHo[1]. In a recent report, Approaches to service propositions for the small office/home office (SOHO) market: 10 operator case studies[2], Analysys described the sector as a potential goldmine for communication service providers. On what basis was that conclusion was reached?

What is a SoHo?

Small office/home office businesses, which are ubiquitous, need at the outset to be defined. We can see them as those enterprises with perhaps four employees, and they represent more than half of all businesses globally. Surveys suggest their number is growing at an average CAGR of 2% and their presence tends to be particularly high in middle-income markets.

Why should these numbers matter to telcos? Because surveys also indicate that around half of SoHo businesses’ communications needs are served by consumer-grade mobile packages, and another quarter by their consumer broadband equivalent. This leads a pretty obvious conclusion: there’s an enormous opportunity to upsell high value enterprise services to SoHo’s and, presently, it’s largely being ignored, counter intuitive as that might seem if telcos really are desperate to tap into new revenue streams.

Grasping the nettle

This status quo needs to change. If service providers are searching for new ways to become more profitable, it makes little sense to continue ignoring the SoHo sector. Yes, its individual components (the businesses themselves) may be small, but collectively their number is significant, and so is their unfilled appetite for enterprise telco services. For CSPs, the barrier to successful entry may, according to Analysys Mason, be bridging the gap between the opportunity and what’s required to exploit it.

What SoHo businesses want is straightforward; competitively priced, state-of-the-art, business grade communications services. In theory, telcos are well set provide this. The breakdown lies in the history of the relationship between the two parties; years of telco neglect have eroded trust from SoHos with the result that telcos now face a challenge convincing the sector that they’re willing and able to meet its needs. SoHos are wary that service providers will sell them expensive technologies and services that, in fact, don’t meet their needs.


So, what should telcos be doing? Analysys Mason has a few recommendations:

  1. Develop focused marketing messaging that’s a hybrid of traditional consumer and enterprise approaches. Think about offering consumer-like benefits with small-business products.
  2. Articulate the difference between “consumer value” and “business value”. The misconception that business solutions are over-priced and offer unnecessary functionality needs to be addressed. SoHos need to understand the specific advantages business propositions will bring them.
  3. Grasp the importance of service and support. SoHos self-evidently don’t have large IT teams or in-house support capabilities so offering enhanced service and support, helplines, and rapid response installations and repairs makes sense.
  4. Offer additional benefits where they’re of practical use, for example deals and discounts on services like accounting software or web marketing services that SoHos rely on.

There are other possible moves, but the conclusion is simple enough; operators must take steps to convince SoHos they they’re valued customers if they want to tap the potentially lucrative market. And to do that, they need to move beyond their consumer and/or traditional SME market channels, which offer very different value propositions to what’s required to meet the needs of the smallest businesses.

One answer: the Cloud PBX

One obvious solution to meeting the needs of the SoHo market is a Cloud PBX service, an extremely logical step forward for the small businessperson who’s been used to using a personal mobile to run a company, which was we’ve seen is so often the case. The consumer mobile with access to just a few, not-really-useful-or-relevant, consumer rather than designed-for-enterprise services doesn’t make life easy, something telcos themselves should already know and be willing to admit. To attract SoHos, telcos must think about solving the specific communications challenges they face, like:

  1. SoHos often manage multiple projects that require temporary staff. Trying to manage a fluctuating team from a single consumer mobile device can be near impossible. Why not give SoHos additional, simple handsets ready to increase the available number of phones, or why not make it easy for temporary and occasional employees to use their own devices for work? With a Cloud PBX, phones could have user accounts (possibly with their own smartphones). These could make and receive calls. Simple handsets might only answer, rather than make calls. All activity could be based around a single virtual number. All devices could be used as terminating points with designated employee devices acting as agents.
  1. SoHos generally need better ways to handle enquiries and queue incoming calls. Why can’t callers – prospective new customers – be played a message if they need to wait in a queue? Why can’t they have options while they’re waiting, just like in a real, big business? This is a basic enterprise communications service which SoHos don’t presently seem to have widespread access to, yet a Cloud PBX could easily provide.
  1. SoHos often need a queue system, with overflow forwarded to voicemail. Again, their present consumer services rarely provide this. Accumulated VMs may need to be sent to a single point or calls routed specifically to the right individual. A Cloud PBX would solve the problem and give SoHo’s exactly what they need.

These are just three uncomplicated examples of how a Cloud PBX could help telcos meet their SoHo customers’ needs. And just a basic cloud PBX would be required. Nothing physical to deploy. Portal access via subscription. The SoHo end customer enabled to run its business seamlessly.

Adequate enterprise services infrastructure, please

For SoHo businesses, having just a consumer mobile subscription means telcos are ignoring their invisible people and, worse, missing out on the significant revenue opportunity they represent.

With access to a Cloud PBX fully integrated with the mobile network, service providers can make sure their SoHo clients get the enterprise services they need. Specifically, Gintel’s Cloud PBX can help operators deliver enhanced productivity solutions to their SoHo customers.

Talk to Gintel

Gintel helps operators succeed in highly competitive markets, achieving differentiation for their business service portfolio. Our telecommunications heritage, know-how and experience are backed by a track record of delivering successful solutions to Tier 1 operators, MVNOs, ISPs and Systems Integrators.

We enable our customers to stay at the forefront of service innovation in a rapidly moving market, offering agility and flexibility and delivering profit for their business.

 

[1] https://www.analysysmason.com/research/content/articles/soho-operator-misconceptions-rdmz0/

[2] https://www.analysysmason.com/research/content/reports/soho-cases-studies-rdmz0/

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