Keep focus on "acquiring customers to capture market growth" despite the stagnant aggregate revenue picture
Despite growth in certain services like mobile broadband, most large telecom companies operating in mature markets are in a no-growth business. Even more than the economic downturn, this reality is having a profound effect on how executives run their businesses, on two key fronts: operational efficiency and management of the value generated by their large customer bases.
Many large telecom operators in developed markets, have been experiencing declining growth since 2002. The lack of overall growth at major players, however, has been offset by strong growth of certain services such as fixed and mobile broadband, which has contributed to keeping the focus on "acquiring customers to capture market growth" despite the stagnant aggregate revenue picture.
Going forward, subscriber acquisition for new services will certainly remain a value driver, but a less important one given that there will simply be less market growth to be captured. The focus, then, turns toward two key areas:
- Achieving a leaner operating model to protect profitability as business economics get (structurally) tougher
- Extracting more value out of the telecom operator's customer base by going one step further than current efforts; which is "value management"