Rogerio Dienes, partner, communications, media and technology, Oliver Wyman
Pedro Aleixo, group enterprise director, Zain group
Fahad AlHassawi, chief commercial officer, du
It’s high time for operators to look beyond the avenues they have been focussing on historically and focus on the relatively greenfield opportunities in the enterprise segment by reshaping their priorities and operations.
CommsMEA: What are the challenges faced by telcos in convincing enterprise customers?
Rogerio Dienes: Typically, telcos don’t have the adequate technical sales expertise to convince enterprises to buy non-connectivity ICT services, especially when it comes to more complex products and services. Telcos have built their business around connectivity. Very few operators have been able to deploy a technical sales team with a qualified team and expertise to conduct technical sales.
Pedro Aleixo: Successful operators are the ones that are able to build innovate value propositions, anchored on their core competences like the network, through which they capture an increasing share of the total ICT expenditure of governments and enterprises. This process not only allow us to grow in revenues and profitability, but also to play an increasingly important role in our customers’ minds and operations.
Fahad AlHassawi: Telcos have come a long way since the days of providing basic mobile and connectivity services. At du, our goal is to be the ICT partner of choice in the success of business – be it an SME or a large enterprise or a governmental organisation.
This stems from the fact that telcos are perhaps best positioned to offer a variety of products and solutions and the ownership and delivery of these services is end-to-end working with the best known players in each technology niche and bringing together a compelling proposition. This offers tremendous value to business customers who constantly look for value, reliability and security of solutions.
Perhaps the biggest challenges constitute awareness about telcos’ capabilities and breadth of ICT solutions; and reliability and apprehensions about the quality of service provided, and whether the telcos are able to meet the promised SLAs. On a positive note, as the adoption of enterprise services grows, there is an ever-increasing inclination of companies towards telcos to become their one-stop-shop ICT solutions provider.
CommsMEA: What’s the USP of telcos that gives them an edge over other ICT providers?
Dienes: One stop shop for all ICT needs, added to the fact that they have ongoing relationships with enterprises based on connectivity services. It is also possible to claim a price advantage derived from the bundled value proposition.
Aleixo: By having the network, telecom operators are in a unique position to be the preferred technological partner for companies and governments, for a significant share of their ICT expenditure. As tapping into the IT space requires reliable high broadband network connections, an asset at the core of telecom operators, successful telcos will leverage their capabilities to expand on the IT value chain. Some natural areas are datacentre based services and security. As datacentres are at the core of the network, telcos add additional resilience, performance and cost benefits to B2B customers’ IT systems, in the scenario of joint management of IT platforms and data networks. By managing customers’ data traffic, operators are uniquely positioned to manage data security on behalf of customers; services such as DDoS protection are better performed from the core of operators’ networks.
Operators also have a very solid model to engage with customers along the customer journeys, from lead management, to contract and after sales commercial and technical support. Users, financial and technical decision makers, rely on telecom operators for their daily interactions with the core telecom services. These model can be easily expanded to IT services.
AlHassawi: In my opinion, it is not really an equivalent comparison between telcos and ICT providers. And while there is some overlap in the kind of services provided, compared to pure play ICT service providers, there are several distinct advantages which telcos bring to the table.
We have the advantage of owning the telecom infrastructure combined with our deep understanding of the local market requirements, behaviour and expectations. On top of that, we have tie-ups with technology industry leaders and ensure that the economies of scale and expertise in offering a superior customer experience filter down to every customer.
CommsMEA: How would you rank the profitability of enterprise segment for telcos?
Dienes: This can vary widely depending on the economy of the country. In strong economies, the average is over 25%; while in weaker economies, the average is usually close to 10%.
Aleixo: It is a fast growing segment of the business, fuelled by new mobile value propositions, new fixed and convergent fixed-mobile solutions and IT offers.
AlHassawi: We can certainly say for sure that this is one area that is of immense importance to us. Our strategy is to offer business services which are tailored to the needs of each of our customers depending on the size and requirements of the business and its employees. This has clearly paid off, both in terms of recognition at industry forums, and most importantly – high growth rates of this segment of our business.
With the future moving towards a more integrated and digital world, with the likes of managed services, cloud computing, IoT, big data gaining traction, the future looks bright for enterprise services.
CommsMEA: What has been the biggest win for you in enterprise segment in the past 12 months?
Aleixo: The consistency in B2B market share and revenue growth is the big win in the enterprise area. To mention very dynamic areas where Zain successfully won large business, M2M solutions, VPN and International connectivity top the list.
AlHassawi: 2016 was a successful year for our enterprise business division. Success came in the form of increased profitability of the division, as well as the expansion of our customer base and strategic partnerships, notable examples being the ones with ADIB, Al Futtaim, with the Government on FEDNET, Smart City, ENBD, ENOC, and Dubai Smart City. We were also recognised by multiple industry forums for our solutions. In addition, we signed up strategic agreements with global IT majors such as Cisco, Huawei and others.
CommsMEA: What are you doing to improve the profitability of your enterprise business?
Aleixo: Profitability in B2B at Zain comes from top line growth. We are in expansion mode in the B2B space, investing in new technologies, network, platforms and datacentres, to offer advanced services to governments and enterprises of all sizes. Zain is expanding the size and capabilities of the marketing, sales and service teams in the B2B business units across our OpCos, to fully explore the market opportunities.
AlHassawi: Our efforts are currently in several directions but all are singularly aimed at increasing the profitability and growth of the business division. Some of our focus areas include building on our existing platforms to deliver latest solutions based higher levels of technology and security; increasing the investment in talent and skill sets of our colleagues and partners’ capabilities; offering better levels of digital integration as part of our customer experience programme; and looking at more innovative ways to leverage and draw efficiencies from our existing infrastructure capabilities.
CommsMEA: How can telcos improve the returns on their enterprise business?
Dienes: Telcos are in a unique position in the marketplace, since they have an ongoing relationship with enterprises that spans several years, on top of which they have a significant amount of data. This can be leveraged to better target new clients, increase sales for existing clients and design new products and services that serve the needs of enterprises.
Aleixo: Leveraging on the customer base, and cross selling non-telecom services, is a powerful growth lever. Expanding the customer base, though the development of innovative ICT services, anchored in the core telecom assets, is another strong growth avenue.
AlHassawi: Customers are adopting digital in a big way, enterprises are no different. Digital transformation can boost the UAE's GDP by nearly $14 billion by 2020, according to SAP and a recent Accenture report. The Accenture report reveals that if the UAE government and businesses optimise digital skills, technologies and accelerators, then the UAE's GDP would increase by $13.8 billion by 2020.
Considering this kind of a backdrop, there is an opportunity for us to push towards creating a higher level of digitisation and digitised interfaces, both internally and customer-facing. Apart from this, our aim is to increase customer satisfaction levels and enhancing our existing complaint resolution mechanisms
CommsMEA: What are the services in maximum demand amongst enterprises?
Dienes: This varies widely with the size and sector of the enterprise. Small companies behave very much like consumers, and need services like prepaid mobile, landline and DSL and tend to be price sensitive.
Medium sized companies (with 20-100 employees) start skewing towards higher value services, like post-paid on mobile, and shift from standard landline to DID/DOD. The larger companies within this group also buy leased or dedicated lines with sharing ratios that are better than the consumer services. Additionally SaaS services are growing in popularity among this group.
Larger companies and governments go for mobile post-paid or IUC type products, leased lines or DIA and IPVPN which is typically more relevant than mobile services, managed services (ranging from colocation to full solutions).
AlHassawi: Data-related solutions and connectivity services such as roaming are always in high demand. And increasingly, managed services in general are gaining ground, especially managed colocation, security solutions and cloud-related services. These constitute the fastest growing segments within the enterprise business.
CommsMEA: What kind of partnerships can telcos invest in for enterprise business?
Dienes: Telcos can partner with ICT service providers for a broad range of services as simple as providing exchange to hosting servers in their data centres and potentially specialised services like managed security services. Other potential partners can SaaS type providers and IoT, M2M or hardware providers whose products and services can be combined with connectivity from the operator.
Aleixo: Zain establishes partnerships with leading ICT players to accelerate our go to market approach, in a logic of leveraging on existing proven service platforms, integrating them in the Zain network and service platforms, and deliver the best solution and customer experience to the market. Examples of Zain Partnership strategy are the M2M, cloud, and PaaS offers.
AlHassawi: Apart from technology-partnerships, our clear intention is to combine non-telco benefits with telecom benefits. These would distinguish our product and service offerings and enable a closer partnership with our customers, wherein we are better integrated with the lifestyle needs of our customers.
CommsMEA: What’s the revenue potential of enterprise business for telcos?
Dienes: Telcos can aim to generate up to 30% of their revenues from the enterprise business.
Aleixo: In West Europe and US, B2B business can represent between 25% and 30% of total revenues in leading operators. Zain believes that the B2B business in Middle East and North Africa region can weigh in up to 15% to 20% of the telcos revenues.
AlHassawi: In the backdrop of a growing economy and continuous investments in technology, enterprise solutions are poised for steady growth, both in connectivity services and in newer areas such as managed services. Enterprise customers increasingly connect the dots between investments in technology-driven enterprises solutions vis-à-vis the value proposition it brings to their customers, and this is an area best tapped by telcos. Telco services are the backbone of enterprise operations cross all industry sectors, it is the gateway through which they reach customers, supplies and communicate internally. This is why the potential is high.
CommsMEA: Are there any enterprise services (besides basic connectivity) that can be provided exclusively by telcos?
Dienes: No; there are typically players that provide all un-regulated products and services.
Aleixo: The ICT world is a convergent world, where traditional telecom, IT and information industries are overlapping and competing for the customer’s ICT budget. Each one comes from a different root, which is each one’s differentiating argument. In telecom we own and operate the network and it is by developing new and innovative services, anchored on our network, that we have a differentiating angle to acquire more share of the ICT market.
PUTTING A B2B PLAN TO ACTION (Source: Bain & Company)
-Reﬂect B2B focus in talent allocation and organisation structure
-Invest in future-proof technological and commercial capabilities
-Enable your organisation to market and sell in the digital era
-Continuously improve through customer feedback loops