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Telcos globally innovating to win business in crucial SMB market

Small and medium-sized businesses (SMBs) are at the forefront of telcos’ enterprise market focus globally as they pivot towards this lucrative market segment amidst intensifying competition and evolving economic landscapes. Recognizing SMBs as engines of economic growth, telcos are innovating their service offerings and forging strategic partnerships to capture a larger share of this dynamic market, positioning themselves for sustained revenue growth and market leadership, says GlobalData, a leading data and analysis company.

Competition for larger corporate enterprises and public sector organizations has intensified because of deglobalization and strained government budgets impacting the top end of the market. With SMBs universally recognized as the drivers of national economic success and the bedrock of local business, telcos worldwide are looking to this crucial market for growth.

Robert Pritchard, Principal Analyst, Enterprise Technology and Services at GlobalData, comments: “There has always been a glamor associated with winning ‘big ticket, big name’ business, but often margins are tight and the resources required for delivery are substantial. That is why telcos around the world are refocusing on smaller businesses. They have also noticed that SMBs are often less cost-driven and mainly require services that simply meet their needs, making that super-valuable behavioral sub-segment ideal as margins are high, churn is low, and there are plenty of upselling opportunities.”

GlobalData analysis reveals that telcos are going beyond their core connectivity business with value-added solutions and strategic partnerships, usually in adjacent or enabled markets such as security and hosted applications, to improve their SMB propositions.

Pritchard adds: “Telcos have long known that SMBs are a huge market but have been challenged in how best to address such a diverse opportunity. Often, they have resorted to simple connectivity products with one or two extra features, or to bundles to try to optimize their ability to capture share of wallet.”

However, the game is changing. Competition is forcing telcos to become more imaginative, changing their thinking from technology push to business needs pull – essentially the same narratives they have been using in the larger enterprise market.

There is a potential tectonic shift in telcos’ ambitions to be able to address what is known as the “segment of one,” a highly tailored solution that meet the needs of each business. Telcos are starting to understand that they have the data, and now also the tools (AI/Artificial Intelligence-driven), to analyze customer behaviors and trends so they can tailor their own sales forces’ efforts or enable customers themselves to select services and applications according to their individual needs.

This is ideally done using a portal to empower the customer and reduce service provider overheads. It also represents a substantial commercial advantage for longer established service providers who have mountains of data to exploit.”

Pritchard concludes: “The SMB market is the hottest area in the telco enterprise market. It represents a huge opportunity across all countries, and now service providers are scrambling to up their game to drive future revenue and profits.” GlobalData

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