The secrets to reducing opex

How telecom operators can reduce their opex without diluting the brand experience
Robert Varty is the Head of Sales at Workz Group.
Robert Varty is the Head of Sales at Workz Group.


By Robert Varty

As operators migrate to the new digital landscape, revenues from existing subscriber products continue to be under pressure meaning bringing down operational expenditure is paramount. From the experience I’ve had working with operators, there are a number of ways in which they can look at reducing their expenditure without lessening their revenue or brand equity. Primarily, I would see this in three areas: the product, the packaging and the full supply chain.

Operators, rightly, are not keen to detract from the user experience, which is the most common expectation (and misconception) people have when you talk about reducing costs. When you dive into the details with an operator and examine their supply chain in conjunction with their own objectives and end-user requirements you can often discover a lot in terms of how you can increase efficiencies and, at the same time, improve the end-user experience.

For the end-user, the product and its packaging are a very tangible part of their brand experience and this is one of the first things we look at with an operator. The world, technology and mobile users have changed dramatically since the launch of the first SIM cards back in the early 90’s and the change is continuous. We assess the product in relation to current requirements – is it still relevant? We find many products have evolved over time and it’s common for small evolutional changes or tweaks to be made here and there that mean some of the overall efficiencies may have been lost along the way. For instance, we would ask questions such as is a full-size ISO plastic card required to deliver a 4FF (nano) module? How would the customer perceive their experience if the detachable plastic around the usable product was reduced? If this was perceived to lessen the quality of the brand, the operator may not want to adopt this, however, if the change would result in the end-user finding the experience more environmentally-friendly and resourceful then this can result in a triple-win for the operator – the brand experience is enhanced, carbon footprint is reduced and costs are cut significantly.

The same principle applies to the product’s packaging and its collaterals. For example; moving from a plastic pack to a paper pack, making a large bulky pack sleeker or reducing the number or size of collaterals such as user guides or registration forms. Again, given the growing environmental awareness, end-users nowadays tend to consider these types of changes as the smarter way of doing things and give a brand more credence as a result. In light of this trend, one of the products we have recently developed at Workz is an all-in-one pack where the user guide and data labels are printed directly on the actual pack itself thus saving material, weight and kitting time as well as providing the end-user a ‘smarter’ brand experience.

Some of the below-the-surface changes that the end-user would not recognise involve optimising the packing spec i.e. how the product and its packaging are delivered to the vendor. The materials used, the number of products per crate, the design of the crate, etc. can all make a big difference.

To ensure a product is optimal there needs to be a collaborative process from the start, before a design is made, with all the various parties involved from marketing, sales, warehouse etc. An aspect often seen as unsexy is the kitting of SIM card with its collaterals into a pack. The time spent collating these items, verifying (or pairing) the data can be a major contributor to the overall unit cost. Therefore, it’s critical that the design of the product and its components are shaped with this in mind. We have found that even something as trivial as reducing the size of a data label can help optimise the product and process costs. In addition, it’s important to remember, how elements are connected and that savings can, essentially, be magnified. For example, reducing a material cost can have a knock-on effect in other areas such as reducing storage or logistics costs.

When speaking with clients, I tend to use the analogy of a Formula One car; making multiple tweaks can make the car go faster, in the same way, making multiple tweaks to a product, packaging or its supply chain actually reduces the cost. And the end result, is it worth it? Well, we have seen operators enjoy savings of over 20% by optimising through our recommendations …and at no detriment to the brand experience. Ultimately, you could say it’s the difference between winning and losing the race.

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