XaaS Telco opportunity?

Telco XaaS Opportunitities

The image above is from the report Have MNOs Grasped the XaaS Opportunity? from the Maximising Wireless Profit program published by Mobile Market Development.  It illustrates how little Mobile operators have so far addressed what could be a major opportunity with XaaS to become truly customer centric.

XaaS: a Telco opportunity in the cloud

To take advantage of the opportunity represented by the emerging XaaS opportunity, Telcos in general will need a radical re-think.  They must place their huge resources fully at the service of the customer. They need a deep understanding of their customers – much more than can be achieved by existing customer satisfaction and loyalty processes.

Flipping the model: Customer partner, not Channel partner

Consumers (and businesses) face increasingly complex choices due to an increasing range of services and suppliers to choose from.  Telcos can flip their model and begin to acquire services and content on behalf of their customers, rather than selling them on behalf of their partners, or themselves. They can become a trusted partner helping customers to navigate increasingly complex choices and managing their associated commitments. Customers want the best deal in terms of price and what is delivered. XaaS offers a generational opportunity to meet heightened customer expectations.

Flipping the model: Customer first, Network second

Telcos have always focused on development and management of the network and associated services. They have assumed what they deliver is best for the customer.  From the days of PSTN and cross-subsidy of local calls by long-distance, through to walled-garden internet portals, Telcos have not fully appreciated the view or understood the true needs of the customer.  Where the core business is protected by licensing and spectrum allocation, this has not held back the development of profitable business models.  But Telcos have already lost out to OTT providers in the digital world who they ride for free on the back of Telco networks. And OTT’s have a much clearer understanding of what the customer wants or needs to do.

Regulatory ambivalence

Telcos reaction has usually been to cry “foul” and ask regulators to protect them from the exploitation of their networks by OTT’s not paying a fair share of the network costs.  Regulators, however, have long sought to reduce dependency on the infrastructure owners and have engineered an environment that allows digital players to focus on customer needs, rather than the enabling network infrastructure.

Mea Culpa: Time to move on!

As a result of poor pricing, subscribers may be getting a deal below cost to use these digital OTT services. The fault here does not lie with the OTT providers, or the subscribers; the Telcos have been myopic in setting pricing that encourages congestion and low margins.  Until government regulators begin to ask motor manufacturers to pay for each mile their customers drive  (currently, the user pays such costs), then Telcos should not expect any regulator help in getting OTT players to contribute to usage of the network. Telcos have a once in a generation opportunity to flip the model and become customer centric, and their customers trusted partner.


1 thought on “XaaS Telco opportunity?

  • I think the opportunity is to simplify the lives of customers, insulate them from the myriad of new services XaaS generate. Research shows too much choice and change generates a feeling that one is behind the curve, not using what is available, the best or cheapest. There is also the challenges of switching from one service to another – I still have photos across 5 cloud providers and no energy to consolidate them! This is a significant customer segment and probably the majority of the market. AI and ML can be harnessed to do a lot of the heavy-lifting at low cost. Telcos ignore at their peril!

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