SHORT
BOOST ICT SERVICES TO WIN THE B2B MARKET
Success factors for unlocking the growth potential of ICT services
Most global telecommunication
companies have sought growth
opportunities in the market for
connectivity services over the past
years. Especially in the B2B segment,
telcos generate a majority of revenues
from this source. However, telcos
worldwide as well as in the GSA region
have come under significant pressure
with revenues decreasing by -0.5% per
year 1 and average revenues per user
(ARPU) plummeting by -3% 2 per year
over the years 2011-2019. With the
commoditization of connectivity
services, telcos urgently need to
refocus their business models and seek
new revenue streams within the B2B
space.
ICT MARKET: CHALLENGING BUT
PROMISING
With an annual growth rate of +3.4% in
Germany, the ICT market for small and
medium enterprises (SMEs) represent a
significant revenue source. Even
though half of all German SMEs
increased their ICT budget over the
past two years 3 , only a few large telcos
have managed to successfully monetize
this potential so far. This is despite the
many ICT challenges SMEs still
encounter like migrating from classic
telecommunication to VoIP, hosting
and housing of servers to cloud-based
XaaS solutions, as well as
implementing security and remote
workplace solutionsfor employees.
services, IoT products, ICT security), to
leverage their existing customer base
and to position themselves as one-stopshop
for SMEs. Unfortunately, telcos
still struggle to gain traction in the ICT
market. Challenges are multifold and
can be grouped into five key categories:
customer segmentation, go-to-market
& products, sales approach, partner
network, and internal enablers.
WINNING IN ICT: KEY SUCCESS
FACTORS
Based on market insights and project
experience in the aforementioned
areas, goetzpartners has identified
multiple success factors to overcome
these challenges.
Market and product-oriented
CUSTOMER SEGMENTATION is key
to enable efficient go-to-market and
sales processes, as well as to improve
customer satisfaction based on a
tailored, segment-specific approach.
Offering managed services across all
segments strengthens customer
relationships, builds loyalty and
generates further insights to maximize
customers' share of wallet. In addition,
customer care can be provided
according to the customer’s products
and solutions.
CHALLENGES TO ENTER THE ICT MARKET
ICT Services in Germany are expected to grow with
a CAGR of 3.4 % until 2023…
To offset the
declining connectivity
market, telcos
must further exploit
ICT services in the
for B2B growth. market. As the
demand for ICT
services by SMEs is
surging, telcos
have to strengthen
their ICT capabilities
to tap into a
growing and
competitive market.
… but B2B telco players need to overcome 5 key
challenges:
Large IT companies such as Microsoft
or AWS have already addressed this
potential and are gaining significant
market share. Nevertheless, it is still a
very fragmented market characterized
by little product standardization.
Now is the opportunity for telcos to
expand their traditional connectivity
portfolio with ICT (e.g. managed
Telecommunication
-0.7%
ICT Services
+3.4%
Source: VATM, Analysys Mason, BMI Research, goetzpartners analysis
1 Statista, 2020: https://de.statista.com/statistik/daten/studie/249949/umfrage/umsatz-in-deutschland-in-den-bereichen-mobilfunk-festnetz-und-kabel/
2 Statista, 2020: https://de.statista.com/statistik/daten/studie/275502/umfrage/arpu-der-deutschen-telekom-im-mobilfunk-in-deutschland/
3 IFM Bonn, KfW, 2020