Telecom service providers’ financial results indicate that there is a common trend towards growth in the small and medium-sized enterprise and small office home markets, according to analytics firm GlobalData.
The firm said that the pandemic, Ukraine conflict, the rising cost of living, and the global climate crisis are driving people and businesses to refocus on more self-chosen issues as they pursue new paths.
“Historically, telecoms service providers have been focused on leadership on the global stage and with domestic corporations, but recent trends underline that much of the growth opportunity now lies with smaller enterprises,” said GlobalData senior analyst for enterprise technology and services Robert Pritchard.
However, Pritchard is quick to point out, “This is not to say that there are not opportunities with national enterprises, public sector organisations, and multinational corporations (MNCs), just that the broader market direction has shifted.”
Leading global service providers like AT&T, BT, Orange, and Verizon reported reductions in traditional large business fixed revenues of up to 8% year-on-year, offset to an extent by growth in value-added offerings such as security, IT/integration, and managed/professional services which, in some cases, are delivering double-digit growth.
“Smaller businesses represent a fantastic opportunity. They tend to be less price-sensitive and more loyal customers as their strategic focus is on growth, customer satisfaction, and recruitment of talent. Essentially, if the technology works, they can crack on with their day-to-day priorities,” said Pritchard.
The birth of high-growth start-ups and ‘steady as they go’ businesses are pieces of evidence that the market potential is huge.
Informed segmentation and an acceptance of a level of risk is essential, as is an optimised go-to-market/channel strategy.
“Technology per se tends to be a lower priority for bosses of smaller enterprises than business outcomes, although it is still at the heart of their operations and delivery. Telecoms service providers are recognising this opportunity and are getting smarter when it comes to delivery, which is underlined by growing revenues and profits from the small business market,” concludes Pritchard.
This first appeared in the subscription newsletter CommsWire on 19 August 2022.
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