Why 4G presents an opportunity for CSPs to target SMEs
While landing the huge corporate contract remains an important consideration and goal for Communication Service Providers (CSPs), the introduction of 4G to the UK market provides the perfect opportunity to address a market segment that has traditionally been tough to crack: SMEs (Small and Medium Businesses).
According to a recent Telesperience whitepaper, commissioned by MDS, the SME sector is one that UK and European operators have long identified as a potentially lucrative opportunity waiting to happen. According to Telesperience research amongst European CSPs, 100% stated that they see 4G as a significant growth opportunity. At the same time, 89% of European CSPs admitted they were currently not fully meeting the needs of the SME market, and 44% said that SMEs currently have substantial unmet needs.
The potential is undoubtedly there. Over 99% of businesses in Europe are classed as SMEs, amounting to some 20 million organisations. Meanwhile, Ofcom has found that companies with five or more employees spend an average of 19% more than the average UK household on basic telecoms services alone. While the SME market offers uncontested revenue-generating potential, CSPs do not have the strategy (4G strategy in particular) to reap the rewards that the technology presents.
CSPs are beginning to identify the supply of 4G-enabled IT services as a natural extension of the current business model that they provide to businesses. With the exponential rise in worker mobility, fuelled by homeworking and Bring Your Own Device (BYOD), 4G adds the ability to make the back office more accessible to workers, thus increasing productivity.
For instance, workers that are mobile or outside their main office environment can access the applications they need. In addition, retailers and others can unlock back office applications and allow access to them from the ‘shop floor’ – meaning that workers do not need to disappear to check stock levels, prices or ordering information. Although CSPs have identified the supply of Cloud-based IT services as being particularly applicable to the SME market, support in Europe is still low compared to the most advanced region (North America), but it is an area that European CSPs have identified as offering huge growth potential. CSPs are particularly interested in rolling out support for Cloud-based storage and analytics.
However, the problem for many is that legacy consumer-oriented infrastructures may not have the capabilities and scale required to support the niche needs of small business. Yet, operators can overcome such barriers and get to market quickly by using adjunct managed BSS services to support their burgeoning SME proposition.
To take this idea of SME specialism one step further, the capabilities exist that would allow service providers to offer a template set of service levels and service assurance to their SME customers.
The 4G SME opportunity is one that service providers are well aware of but are struggling to monetise, mostly due to the inherent complexity of serving such a diverse and fragmented segment. With a shrewd proposition, backed up by an agile and flexible back-office, service providers could be well positioned to develop a 4G SME strategy that benefits both sides.
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