We sat down with Maplewave’s thought leaders, Adam Baggs, Will Gibson, Grant Carstensen, and Bradley Lapin to get their thoughts on how the telco industry fared in 2022 and what’s in store for 2023.
I’ll go first. My thoughts are it was a difficult year where companies struggled with uncertainty, and with not knowing what’s around the corner. Many had their budgets taken away and had to try to determine what to prioritize. Also, there were some issues around cost cutting in certain markets. That was the biggest challenge for 2022, I would say.
Yeah, I think all telcos are still trying to sort out the difference between a digital transformation strategy and an experience strategy.
At the same time, the complexities of IT delivery have grown. What was supposed to be made easier through standardization became more complex. Moving to the cloud didn’t necessarily make things easier, it’s made it more complex and more expensive in some cases.
To meet those digital transformation and experience requirements, that required a larger project than many folks were anticipating. When you’re trying to tie together different channels, some may be more mature than others, which can create challenges.
Also, telcos are facing challenges in trying to create net new revenue streams that engage their customers better, like diving into the world of entertainment. There are opportunities to grow a deeper bond between them and their consumers, but many haven’t been able to execute on this properly.
To sum it all up, I think telcos were a bit lost this year. Between a mid-year recession, losing funding, and having projects stripped down, I would say they’re struggling with what their identity is, and what they represent to the end consumer.
I feel this has been an inward-looking year in a lot of ways. COVID limited a lot of my travel, so I haven’t had a chance to meet with as many people as I normally did in the past, but I have talked a lot with our customer base. I agree with what you said, Adam, I think the same themes apply but everyone is approaching those challenges a bit differently.
I can say that our customers have really invested in the digital space and focused on increasing their digital journeys. Retail stores become a big target in times of cost-cutting, but there is a danger there in that you also cut back the level service you provide your customers.
There are smarter ways to cut costs, like being digitally smart, putting more efficient systems in-store, and doing more with less labour. So, it’s not just about reducing your retail footprint, it’s about improving the retail experience for those stores you do keep.
I think whether you’re cost-cutting or investing depends on your area of the world. A lot of what I would call the “first world” is definitely in cost-cutting mode because the U.S. dollar took a hit.
On the other side, I was speaking with someone from Africa on LinkedIn, and their most pressing issue was “how do I handle double digit growth?”. Many African markets are also dealing with rampant inflation and having difficulty getting a hold of U.S. dollars for budget. For them, it’s about prioritizing problem solving in an environment where you can’t just throw cash at a problem.
Brad, what’s your view on the African market?
Without a doubt, the economic impact of massive inflation is huge. Look at Ghana, Turkey, or other MENA and west-African countries, they are burgeoned by inflation.
But I think telcos are lost at the moment between their investments in 5G, which is expensive, and trying to figure out where they land in terms of customer requirements.
In Africa, 3G and 2G and feature phones are prevalent. Telcos are often focused on balancing that investment, which means they don’t always give customers the service they require. So, while they’re investing, there are still areas that need more attention.
Speaking of investment, one strategy I’m seeing in saturated markets is mergers and acquisitions. We’ve seen a lot of telcos buying each other this year. Just look at Liberty Global, they’re buying properties and operating more like a private equity firm.
This strategy also lets telcos buy capability. Look at how Rogers Communications owns the Toronto Blue Jays. Their competitor, Bell, has a whole media company - they’re focused on the content game. These strategies are about connecting with customers in different ways. So, for many telcos, they’re not worried about growing their existing footprint, or B2B or B2C channels, they’re focused on who they’re acquiring next.
Everything that’s been said is true. We’ll see more mergers and acquisitions, we’ll see more land grabs, and see more telcos trying to get content. But one trend that I’m talking to lots of people about right now is the B2B space. I’ve had two conversations about it this week, and it’s becoming the “shiny new thing” that telcos see growth potential in.
What’s happening in the B2B and enterprise space is that telcos are starting to productize these offerings a lot more. It used to be very, very bespoke. People would create custom quotes on a laptop for that client, and that deal would never be repeated for anyone else.
Now, telcos are wanting to manage their B2B customers like their consumer channel; they want to give clients the tools to manage themselves. What we’re seeing is a push to use modified versions of our longstanding consumer tools in the enterprise space. So, an e-commerce site. Or a personalized self-care app that can be given to the thousand people in the organization to manage their cellular services and upgrades.
Also driving this is the BSS players; they’re investing in complex catalog architecture. That means these once bespoke offers can be made repeatable. Then, it’s possible to use a front-end tool like Maplewave’s to scale the service across your B2B customers. So, that is the hot trend for me next year, and my biggest prediction.
Will, I’d agree with that, because nobody like dealing with the call centre. And if you want to reduce costs, you have to remove the people. The problem is, that’s been poorly executed so far, as chat bots don’t work particularly well. Whoever cracks that is going to make a small fortune, but I do agree with your sentiments.
If you look at our telco engagements in Africa, it’s all about making the process easier. It’s also about visibility. Traditionally in those markets, there hasn’t been much from a visibility perspective. If a telco can get accurate reporting, they can go back to the OEM and get more marketing funds and spivs. There’s a whole world of revenue that African telcos have missed out on because they haven’t had that level of reporting in the past. That’s a big opportunity for next year.
For 2023, it’s going to be about finding ways to economically round out their digital transformation projects where their budgets or scope have been reduced. That will also be a big challenge for vendors – telcos will want the world but won’t have the budget to pay for it. Vendors will have to find ways to fill the holes.
For developing markets, the opportunities will be all about energizing their various sales channels. Retail is still an extremely important channel that must continue to be the cash king for them. Finding ways to maximize revenue from that channel will help them fund their digital projects.
There’s also a big opportunity in energizing their third-party distribution channel. Right now, they know what their retail channel can give them, but they don’t know what third-party channel can give them, or what the value of future growth could be if it was executed properly.
I see a few themes. The first would be finding ways to push into the digital space and broaden the number of digital journeys. The retail channel is expensive, but there are smarter ways to reduce expenses than just reducing your footprint. When you put better systems in stores, you can do more at the till and drive more profitable sales.
I think carriers are still very siloed by channels and they need to find ways to implement catalog driven architectures. We have a few customers who are trying to implement a common catalog, CRM, and customer-view across channels to enable omnichannel. That ability to hand off between channel is a top area for investment.
I think investing in a Paperless Transactions solution is a sure bet. These solutions have a clear ROI and customer benefit. When telcos are deciding how to spend their budgets, they should look at what has the highest ROI, and the biggest impact on the customer.
If I can add to what Brad’s saying, sustainability will be a huge theme for 2023. Going paperless presents an opportunity in any market with heavy contract requirements. It fits sustainability and climate change goals and has a clear ROI. You won’t end up spending money on a nebulous concept of a better CX, you’ll see a real return there.
And I’ll add as well, the right Paperless solution matters, as there are lots out there. What makes Maplewave’s solution different is 1) We can make the entire sales process digital, including receipts, Walk Out Working forms, etc., and 2) Our retail governance tools allow every activity to be audited across channels. Now you can link behaviours to commissions, which further drives profitability.
For third-world markets, I mentioned that visibility is important. Telcos are investing in hardware, but where is that sitting? Are you overstocked in certain locations? Whether this is at the retail level or the warehouse level, I’m seeing a number of conversations around driving visibility and control over inventory. So, I’d recommend looking at WMS and retail inventory management solutions if this isn’t already well managed.
I mentioned earlier about energizing the third-party channel. To do that well also requires investing in a solution designed for that channel; one that is meant specifically for those types of sales, and that still integrates with the rest of your commerce systems. That means you’ll get real-time visibility and reporting from that channel so you can really maximize profitability.
From my perspective, the B2B channel holds a lot of potential, and my recommendation is to invest in those self-serve B2B solutions for sure.
2022 was a mixed bag, but 2023 holds a lot of potential if you invest in the right solutions for your market. What are your plans for next year?