Telcos are encouraged to leverage their core strengths in connectivity and data services to drive B2B sales, rather than chase vertical specialisation.
Research firm GlobalData argues that while there is a temptation for telcos to deepen sector-specific partnerships, this often leads to unrealistic expectations and costly strategic readjustments.
“Over three decades of working with telcos, GlobalData has seen many ambitious statements about building up expertise in specific verticals,” said Gary Barton, Research Director for Enterprise Technology and Services at GlobalData.
“However, while there are examples of telcos being successful in certain industry verticals, often success is built on opportunism rather than developing a deep relevance to that vertical.”
The increasing complexity of the technology landscape is driving a need for greater specialisation across numerous verticals, including manufacturing, banking and finance, healthcare, pharmaceuticals, and transport and logistics.
While this might make a vertical approach tempting, GlobalData cautions against telcos spreading themselves too thinly.
“It is tempting to believe that all enterprises in a given vertical buy technology in a similar way and have similar requirements, but there is a growing number of sub-verticals, which all behave differently,” Barton explained.
“Telcos cannot realistically develop the depth of understanding to address all these highly nuanced needs. Furthermore, doing so will lead to targeting increasingly smaller numbers of businesses thereby reducing the total addressable market or excessive go-to-market expenditure.”
Robert Pritchard, Principal Analyst at GlobalData, added: “There are examples of point solutions in areas such as IoT in certain verticals, and co-developed solutions, but these remain the exception rather than the rule.”
Instead, GlobalData recommends telcos focus on their horizontal strengths in connectivity and data networking, offering solutions like internet and cloud access, and SD-WAN/SASE, which are needed by businesses across all sectors.
“Telcos should demonstrate how their solutions will be the crucial enabler for an enterprise’s wider transformation journey as they seek to embrace technologies such as cloud and AI,” Barton concluded.
(Photo by Eran Menashri)
See also: Huawei eyes Asia-Pacific growth with AI cloud services
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