BaseKit 2024 Product Roadmap

According to recent market analysis by GVR, the global telco market was valued at ‘$1,805.61 billion in 2022’ and is expected to keep growing throughout this decade and beyond.

While this can be partly attributed to a growing population, there are other factors at play too. The unstoppable march of the global smartphone revolution and required 5G and in time 6G infrastructure is also a key driver for growth.

Despite these opportunities, telcos across the globe are facing significant challenges around core product pricing, a more competitive landscape and rising customer churn.

Core product pricing: a race to the bottom

50mb internet from telco A is the same as 50mb internet from telco B. Everyone knows this.

And as core products become increasingly commoditized, telcos find themselves caught in the relentless race to the bottom when it comes to pricing their core products. Downward price pressure, squeezed margins and maintaining service quality are quickly becoming the triple threat headache that senior execs cannot ignore.

MV-NO!

New competitors piggybacking on existing networks has added to the pricing challenge conundrum. In the UK for example, the ‘big four’ of O2, EE, Three and Vodafone who own the mobile infrastructure have been joined by a gaggle of mobile virtual networks operators (MVNOs) in recent years.

Upstarts like GiffGaff, who are looking to attract Gen Z customers by offering budget tariffs and a marketing message centered on refurbished phones and eco credentials.

CAC attack

Working out true customer acquisition cost (CAC) can be challenging. Especially for large and complex organisations like telcos, who’ll often use multiple channels when communicating with customers.

That being said, a Forbes article looking at the maths for acquiring subscribers put the customer acquisition cost for US telcos at around the $300 mark. That’s $300 for EACH new customer.

The two step strategy for growth

The strategy needs to be two-fold. Reduce churn and then increase ARPU.

With the cost of acquiring new customers continuing to rise, focusing time (and money) on those individuals and businesses who are already brand-aware and using your products and services, is a crucial step to then being able to effectively attract new ones.

Indeed, B2B continues to look like the best route for sustainable growth in the telecoms space. While enterprise customers are often looking for complex, next gen solutions like IoT, it’s the SME market that looks ripe for expansion.

Creating a digital one stop shop

Telcos have long looked for value added services as a way of boosting retention across their customer base.

What’s become apparent in recent years is that small businesses, especially those that are just setting up, represent a prime audience for a digital one stop shop. While these organisations may not have huge amounts of capital at the start of their business journey, this can work in a telco’s favour.

Offering the key tools that every business needs – voice, data, web presence, email, e-commerce – for one competitive price can drive a significant increase in new customer sign ups.

Over time and as the numbers multiply, the stickiness of this bundle is likely to see a significant number of these companies stay and grow into larger customers as their businesses expand.

We’re on a mission for tech democracy for small businesses – are you in? Request a demo of our software, or get in touch to see how we could collaborate.