Communication Service Providers (CSPs) have been facing increasing competition and shrinking margins for years, spurring on the need to look for new strategies and business models that will help improve the bottom line.
The deployment of 5G and the sweeping innovation it promises to usher in has been seen as a game-changer for most CSPs. However, the COVID-19 outbreak is lending to some major disruptions when it comes to 5G deployments, such as delays in spectrum auctions across several countries and a lowered demand for 5G services due to reprioritized spending by consumers, according to 451 Research.
The onset of the global COVID-19 pandemic and the subsequent economic follow on effects now means that protecting margins becomes imperative for communications service providers. In these uncertain times, here are our six top tips to help CSPs better weather this storm.
Explore costs and margins from a per customer perspective in order to understand how these fluctuate according to different variables along the value chain. By categorizing customers according to their needs, analysts can better assess ways to profitably serve each group of customers and address those that consume more resources than they pay for.
2. Recognize customer buying patterns that indicate high customer acquisition costs
Analyze the end-to-end lifecycle a consumer makes in the buying journey. By doing so, CSPs may be able to identify issues with products, competitors, sales teams, and multi-channel distribution behavior to optimize their retail network and identify the most effective ways to improve margins.
3. Correlate costs and revenue to fully understand the total cost for each product family, customer segment, or individual customer.
Ensure appropriate product pricing by exploring costs, margins, and profitability of subscribers, services, devices, rate plans, and other entities from a margin point of view.
4. Optimize gross margins by prioritizing debt collection activities.
Prioritize debt collection activities to reduce collection costs and improve cash-flow. When recovering debts, accounts receivable teams should focus on those that will be most beneficial to the business and therefore eliminating negative margins due to bad debt recovery.
5. Determine the true cost of delivering technology by megabit, minute, and SMS
Assigning costs for network elements is amongst the biggest challenges for CSPs when it comes to calculating margins. For the greatest success, CSPs need a granular view of the operational costs associated with network usage so those costs can be mapped to the charges of the services being delivered. Especially relevant in today’s climate, CSPs need to be looking for insights into how network investment options can be separated into independent choices, allowing the c-suite to make better-informed decisions based on a multi-year appraisal of end-to-end costs.
6. Resolve data siloes and discrepancies
Improve business decision-making by breaking down siloed data that is spread across multiple sources. By gaining insight across the entire organization, CSPs can discover valuable customer segments for smarter targeting and personalization, creating better customer engagement opportunities and offer high margin services.
Summary
The COVID-19 pandemic is expected to leave a long-lasting imprint on CSP profitability and sustainability. Now more than ever, it is important for CSPs to look within their current business operations to identify areas to protect margins, sustain business performance, and optimize operational profits. To learn more about how Mobileum can help you protect and grow your business, download our Fraud & Risk and Business Operations papers.