BEYOND CONNECTIVITY Strategic plays to help Asia Pacific's Communications Service Providers capture new growth in B2B markets - Accenture
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BEYOND CONNECTIVITY Strategic plays to help Asia Pacific’s Communications Service Providers capture new growth in B2B markets
ENTERPRISE THE GLOBAL
MARKETS TAILWINDS
MATTER MORE DRIVING CSPS TO
THAN EVER NEW ENTERPRISE
FOR CSPS GROWTH
In suc a challenging environment, enterprise The world is becoming ever more connected in
markets matter more than ever. However, with ever more ways, creating completely new means of A key partner for CSPs
the majority of APAC CSPs principally focused on serving enterprise customers through mobile and in delivering SD WAN
retail domains in the recent past, many companies embedded connectivity business models. Gone
are starting from a low base when it comes to are the days when those customers simply wanted Accenture has built an extensive portfolio of
B2B. As a result, some still have a modest sales a limited number of laptops, PCs, smartphones, experience helping clients deliver SD WAN
proposition for their enterprise customers, or a and tablets connected to the network. Now, we’re products for their customers:
poor understanding of vertical segments in target witnessing nothing short of an explosion in the
industries. Others have been slow to recognise number of connected enterprise devices – and • A global telco was looking to launch SD
that rising expectations are not limited to retail in the vast volumes of data transferred between WAN, focusing on offering unparalleled
segments, and that enterprise customers now them. Industries will be using anything up to 30 user experience. We helped them create
expect the same standards in their business billion connected sensors and 25 billion connected a disruptive B2B portal, encompassing
transactions that they’ve become used to in their devices by 2020, for instance. 4G networks will analysis, conceptualisation, design,
consumer experiences. make up 53 percent of mobile connections in 2018, and delivery, enabling the launch of an
helping fuel massive growth in mobile data traffic MVP with vRAS (Virtual Remote Access
With the digital disruptors ready to move into (set to reach a staggering 49 exabytes a month Service) and WAN2Cloud included.
the B2B domain with force, APAC CSPs face a globally by 2021).1
potentially existential risk. If they fail to inject • A large cable operator in the US
enough urgency into their operations and cannot Advances in network technology are bringing wanted to disrupt the market with a
adjust to these disruptive headwinds with enough vastly enhanced agility, efficiency, and cost- national launch of SD WAN. By working
speed and agility, they will likely end up as pure effectiveness to CSPs’ networks. For example, with them on the product vision and
connectivity providers in commodity markets— Software-Defined Wide Area Networks (SD WANs) roadmap, digital experience design, and
for enterprise customers as well as consumers. provide a significant value-creation opportunity. business process and operating model
And that, ultimately, means a race to the bottom By shifting enterprise networks from proprietary development, we helped them launch
on price, with only the very leanest operators hardware to the cloud using flexible and open SD WAN products as a key enabler
emerging victorious. WAN technologies, CSPs can create omnichannel for growing revenues and improving
This is a critical time for communications services experiences for their enterprise customers, with customer experience.
providers (CSPs) all around the world. And in Asia However, all is not lost. A collection of industry pervasive automation and self-service capabilities
and societal trends, fuelled and accelerated by • A major European operator was
Pacific (APAC) in particular, challenges abound on baked into the core. That helps make the days of
digital transformation, are offering a potentially vital embarking on a significant transformation
all sides. CSPs’ traditionally profitable consumer inflexible and slow responses, long lead times,
pivot opportunity to CSPs. These trends open up a of their B2B customer operations. We
markets for voice and data services are rapidly and high CAPEX and OPEX a thing of the past.
series of strategic plays that can help navigate to combined our consulting, technology,
commoditising, creating huge pressures to Instead, enterprise customers can benefit from on-
new growth in enterprise and B2B markets. Tough and business process outsourcing
maintain revenues while reducing costs. Moreover, demand requests, fast and simple provisioning, and
choices will be required, of course. Today’s business capabilities to support them accelerate
digitisation is reducing or eliminating the barriers anything up to a 30 percent reduction in total cost
models, capabilities, and workforce competencies the introduction of new products and
to entry for their industry across the board. Digital of ownership.
will have to be radically upgraded. But if APAC services (including SD WAN) while
disruptors and OTT providers – Amazon, Apple,
CSPs can look beyond pure connectivity, take their Other technology advances are also opening improving NPS, CSAT, and PM OPEX.
Google, WhatsApp, Skype, and the rest – are
moving in and capturing the new opportunities digital transformations to the next level, and start up new opportunities for CSPs. Policy-driven
created by the digital revolution. Meanwhile, extending their reach into customer ecosystems networking and multi-access edge computing
consumer expectations and options just keep and value chains, they have the chance to enable a (MEC) are creating new kinds of high-bandwidth
rising, breaking down longstanding loyalties true step change in productivity and growth. low-latency network architectures that vastly
between brand and customer. increase user access at the network edge. That
kind of access is becoming ever more essential
2 BEYOND CONNECTIVITY 3
DIGITAL
in industrial networks comprising large numbers Furthermore, as Industry X.0 continues to transform
of connected devices. This gives CSPs a critical industries with smart, agile, connected, living
TRANSFORMATION:
opportunity to embed themselves ever more technologies, CSPs have the opportunity to create
deeply into their enterprise customers’ value chains the vertical-specific platforms that will put them
THE SIZE OF
and claim ownership over vital connection points in at the centre of the enterprise ecosystems of
the industrial cloud networks of the future. tomorrow. In areas like manufacturing, healthcare,
THE PRIZE
retail, and more, enterprises are connecting
5G connectivity is another key part of the equation. together their workers, offices, and factories in
With the proportion of enterprise-generated data new ways and on an unprecedented scale. Those
processed outside the data centre or the cloud set ecosystems of connections call for new levels of
to grow more than seven-fold between 2017 and hardened network security, new self-service tools,
2022 (from 10 percent to 75 percent), the hyper-fast new marketplaces, and simplified and consolidated There is a huge amount of potential value for Of this $2 trillion, the value to the telecom industry
network connectivity enabled by 5G will become reporting and billing. CSPs to capture. The digital transformation of could exceed $1.2 trillion in cumulative operating
ever more important. Indeed, over two-thirds of telecommunications is high stakes – for the profit from 2016 to 2025. Society and consumers
CSPs think 5G will be the most significant factor So, whether it’s in creating ecosystem platforms industry and for society alike. CSPs can develop could benefit from more than $800 billion in value
in driving incremental revenue from their centred around the industrial IoT, or in establishing networks that are self-optimising, self-healing, and – the majority of which will come from efforts to
business customers. the pervasive, analytics-enabled, software-defined self-securing. Increasing digitalisation means they connect the billions of people still unconnected
networks of the future, CSPs have numerous can reimagine connectivity using the IoT, machine- to the internet. The initiatives under Networks of
opportunities to capitalise on true digital to-machine communication, and augmented and the Future and Beyond the Pipe representing the
transformation and provide new solutions for virtual reality. And new kinds of user experience can largest-value opportunities. B2C and B2B business
their enterprise customers in the digital age. deliver truly effective, delightful forms of customer models will be repositioned as new digital services
service, and match the very best experiences move participants beyond connectivity towards a
Industry X.0 / IoE Business Market Demands offered by the digital giants. The total size of the future exemplified by cross-industry competition
prize? An extraordinary US$2 trillion opportunity for and collaboration.
MARKETPLACE SECURITY
both the telecommunications industry and society
over the period 2016-25.2
Hardened security
SPECIFIC PLAT
AL- FO enabled through
TIC RM secured physical
ER US$2 trillion value at stake from digital telecommunications transformation (2016-25)
V network elements
S
with authentication
Network of the future Beyond the pipe
MANUFACTURING RETAIL
Virtualisation and abstraction of the The increased digitisation presents
TELCO PLATFORM
IN THE DIGITAL physical hardware layer promise to change important opportunities to extend revenue
B2B SERVICE WORKER OFFICE FACTORY
the basis of future service differentiation by streams beyond connectivity – through
ECOSYSTEM BUILDING creating networks that will be self-aware, IoT and M2M, digital services, reimagining
self-optimising, self-healing and self-secure. models of digital communication leveraging
AR/VR.
HEALTH COMMERCE Total value $400 billion $580 billion Total value $650 billion $290 billion
at stake Industry Society at stake Industry Society
OTHER
Architecturally designed to Simplified &
allow enterprise to develop, consolidated Redefining customer Bridging the gap on innovation
manage and report through SELF-SERVE REPORTING reporting and billing engagement
simple and open standards TOOLS & BILLING and charging based The need for rapid innovation, greater
based tools integrated into beyond access Deliver delightful digital experiences as convergence and new services means that
network and platform customer now expect the high quality telcos must fill key capability gaps using
digital experiences they receive in one new innovation models and revamped
industry to be matched by companies in talent strategies for a digital workforce.
Connected Worker Connected Building Connected Factory Other Vertical apps other sectors.
applications applications applications
• Digital Hospital Total value $30 billion $2 billion Total value $160 billion $1 billion
• Enterprise Security • Building Access Tied • Plant Air Quality Monitoring • Connected Commerce/ at stake Industry Society at stake Industry Society
• IT applications access to Security • Conn. Asset Management Beacons
• Collaboration • Building Automation • Smart Manufacturing • Connected Mine
& Monitoring Source: World Economic Forum/Accenture Analytics 2017
• Mobile Device
Management • Advanced HVAC/Lighting
• Biometrics
4 BEYOND CONNECTIVITY 5
APAC: A HIGH-
Overall, leading APAC companies enjoy healthy
Focus on: Telstra revenues and solid growth. Aggregate total revenue Managed security services:
POTENTIAL
for the major regional players was US$667 billion a key focus for APAC CSPs
With 2017 revenues of US$5 billion, and in 2017 and is set to grow by over 3 percent in
year-on-year growth of 1.6 percent, Telstra
REGION FOR
the period to 2019.6 In terms of EBITDA margins, Most APAC CSPs now have offerings in
Enterprise is a key player in the APAC companies from developing APAC countries have managed security services (MSS), including,
enterprise space. The company has operations
CSPS
performed best in recent years, although EBITDA in particular, threat monitoring and
in 20 countries, focusing on the Telstra growth is expected to be largely static across the management. There are opportunities to
Programmable Network, dynamic security, board over the short term.7 develop this space further, with managed
the IoT, and Liberate (a mobile convergence security operations centres, managed virtual
solution for enterprises). They have a growing Furthermore, enterprise revenues are forecast security, and advanced cybersecurity services.
Business Technology Services Group, covering to remain mostly flat for APAC CSPs. And while
How well positioned are APAC CSPs to capture their
software, mobility, and cloud services, as enterprise data services are set to grow over the NTT Communications is a leader in the
share of this value? Today, the B2B performance
well as advising on implementation and next few years, the market for voice services is Asia Pacific MSS market, offering a high level
of the region’s leading CSPs is highly varied. In
management. Their success is founded on a expected to contract.8 of automation, self-control orchestration,
absolute terms, Japan’s NTT is one of the leading
strong push for B2B digitalisation (improving and automatic log analysis, together with
CSPs in terms of largest enterprise revenues in Intensifying competition, revenue pressures
customer experiences and enabling new cost-effective low-touch/zero-touch policy
APAC by far, although companies like Telekom from commoditisation, and slowing growth are
interactions on digital platforms) and a management and improved threat detection
Malaysia derive a higher proportion of their revenue driving APAC players to focus on digital offerings.
targeted acquisition strategy (including through machine learning. In February 2017,
from enterprise customers.4 However, revenue These companies are laying the groundwork for
Cognevo in the managed network services they expanded their MSS offering further
growth in the enterprise space has been hard to a shift away from pure connectivity provision by
space and Readify in application development with a partnership with Malaysia’s Diversified
come by, with many companies showing mid- strengthening their advanced network capabilities
and software-focused consulting).3 Gateway Berhad.13
single digit CAGR in the period 2015 to 2017. Yet (such as the IoT, 5G connectivity, network function
some, such as Telkom Indonesia, have bucked the virtualisation, and software-defined networking). Telstra have a global network of over 500
trend. The company enjoyed a revenue CAGR of South Korea, Japan, and China, in particular, cybersecurity experts, offering a range of
25.2 percent over the 2016-17 period thanks to their are leading the way for 5G commercialisation, managed services, including firewalls, security
focus on integrated ICT, digital business and smart with governments of these countries universally operations centres, DDoS protection, content
city solutions.5 agreeing to work together as part of a coherent filtering, and gateways. In 2017, they opened
approach to foster the development of 5G two new security operations centres from
networks.9 Companies are also pursuing M&A which they offer a broad range of services to
activity with increasing aggressiveness, especially government and enterprise customers.14
in the IoT, enterprise security, and cloud spaces.
China Mobile plans to invest US$300 million in
subsidising IoT device makers, for instance,10 while
Telstra have been expanding inorganically through
their acquisitions of cloud services providers Kloud
and Vmtech.11
Cloud is likely to be a key focus for many APAC
CSPs in the next few years. The most notable global
CSPs, including DT, NTT, Orange, and Telefonica,
compete in the cloud market with mature global
giants like – Amazon, Microsoft, Google, and
Alibaba. The market is witnessing intense pricing
pressures, prompting some of the players to exit
the business, for instance, AT&T and Verizon selling
off some of their data centres, due to severe cost
basis competition in the public cloud sector. APAC
CSPs continue to invest heavily in expanding their
cloud portfolios and data centres to grow market
share in the region and compete with other global
players – which are increasing their data centre
investments significantly in the region.12
6 BEYOND CONNECTIVITY 7
FINDING
Success demands a departure from today’s models and competencies.
Focus on: Telkom Indonesia The four key plays for APAC CSPs
FUTURE With total 2016 revenues of over US$8 billion,
Telkom Indonesia serves more than 1,300 Each scenario needs distinctively different skills and capabilities,
GROWTH: THE corporate customers, nearly 300,000 SMEs,
and several government institutions across the
as well as divergent investment priorities and value creation logic.
STRATEGIC country. The company has seen particularly
strong growth in its data, Internet, and IT
SUCCESS FACTOR KEY CHARACTERISTICS
PLAYS THAT segments, which have experienced year-on-
year growth of over 30 percent. That’s thanks 1 Maximise reach via ecosystem of partners,
customers, developers – become an essential
• Integrated experience of own and 3rd party
services, B2C, B2B2C
PIVOT CSPS
to their focus on becoming a leading digital part of the daily digital routine of every user • Agile & open platform (API)
mobile business and developing innovative • Device open and software managed, 3rd
INTO THE NEW
services such as e-marketplace Xooply, big party products
data and analytics service Xsight, advertising • Subsidizing / cannibalising services
Multi-sided
simplification tool Aim Right, among other platform model
IoT, network, and smart city solutions. The
2
company has plans to expand internationally Digital/Mobile pure play bringing Digital & • Mobile focused, innovative and agile
With so much to play for, what approach should across Southeast Asia, and has entered into a Core together across products and service factory
APAC CSPs be taking? How can they defend their joint venture with Telstra to provide services to support channels • Digital-first care & operating model
core connectivity businesses while capturing the enterprise customerstra to provide services to
future high-growth digital opportunities that their enterprise customers.15
connectivity enables? The first step is to recognise
Digital mobile
that scaling new growth is not a single event,
only attacker
but rather a deliberate and perpetual process
The four future strategic plays for CSPs
of change. CSPs in APAC have generally been
investing in their core connectivity businesses. But In choosing the right strategic play to make, there 3 B2C superior bundling of mainly self-owned
services, incorporating acquired rights to
• Controlling customer contracts, devices
and access
in a rapidly commoditising market, with increasing are four models that stand out. Ranging across high-demand content at premium fees. • Advanced customer segmentation: focus
pressure on volumes and growing complexity in both the short and the long term, each of these on B2C
B2B deep value chain capabilities by
portfolios, they’ve generally seen little or no return plays requires very different skills, capabilities, combining connectivity and industry solutions • Owned and closed devices
on those investments. and investment priorities. And the way each • CSF: scale, synergies, superior
creates value for the business is equally distinctive. Vertically integrated customer service
Furthermore, previous cost transformation service provider
The four plays are:
programmes have too often been focused
on low-hanging fruit, such as procurement or
overheads. For the most part, these programmes
1. M
ulti-sided platform model. A sophisticated
consumer-focused play, where the CSP creates a
4 Inject ubiquitous enhanced connectivity (edge
compute, security, QoS) to objects in Industry
• Best country network and access to
superior global reach
value chains to radically improve productivity • Focus B2B, Industry X.0 and efficient asset
have barely maintained EBITDA for the players that platform to maximise its reach into the ecosystem and growth (Access, NFV/SDN, MEC/IaaS, Facilities)
have undertaken them, and have largely failed of partners, customers, and developers,
• Devices, sensors are open, software
to make meaningful changes to the business embedding itself into the daily lives of its users. Connected managed and important touch points
model. Moreover, what focus there has been on Industry • Hyper lean operating model, digital
B2B markets has largely been unproductive (for 2. D
igital mobile-only attacker. A digital mobile orchestrator first channel
instance, in IaaS or SI services) or limited to add- pure play offers core digital services to
ons. It hasn’t created the significant value CSPs are enterprise customers across products and
looking for. channels, building apps and ecosystems Key:
around pure mobility.
The solution? CSPs must make a deliberate and Long term play
careful choice about the strategic play they want 3. V
ertically integrated service provider.
to make in APAC B2B markets. They must be clear Focused on the end-to-end provision of
and distinct about their positioning. They must services, whether premium content for
make a significant pivot away from familiar and consumers or industry-specific connectivity
conventional business models and enterprise solutions for enterprises.
capabilities. And they must develop the investment 4. C
onnected industry orchestrator. A long-term
strategies that can transform the opportunities into play, in which the CSP focuses on creating hyper-
concrete business value. lean, exceptionally cost-effective networks and
injecting ubiquitous connectivity into industrial
value chains.
8 BEYOND CONNECTIVITY 9THE
Each play brings its own opportunities and Adopting the multi-sided platform model is
challenges, and in deciding which to choose a sophisticated approach for the long-term Focus on: Softbank Corp
CONNECTED
much will depend on the particular circumstances success of a CSP. Here, the company creates a
of the CSP in question. The digital mobile-only platform which extends its reach right out into the Japan’s Softbank Corp. has been a leading
CSPs in optimising their network operations
INDUSTRY
attacker play calls for a truly digital-first care/ ecosystem of partners, customers, and developers,
operating model that can reduce operating costs ranging across traditional sector boundaries and with a next-generation mobile IP core network
and developing a portfolio of advanced
OPERATOR
while increasing responsiveness. Plus it needs an regional borders. By integrating their proprietary
innovative and agile service factory that can adapt services with those of third parties using APIs on IoT solutions. Their focus is on connecting
rapidly to changes in enterprise demand, adjusting an agile and open platform, these players can the huge volumes of data embedded in
pricing, making offers, and creating new services effectively “own” the customer – and the network IoT devices, and using artificial intelligence
at pace. through which they access the digital world. to read, analyse, and then commercialise
Most instances of this play have focused on the that data. They have adopted a network For B2B markets, the connected industry operator
The vertically integrated service provider route is consumer market to date. Comcast’s X1 service convergence system to support the is a potentially high-value, high-growth strategic
likely to be relevant for the larger, more traditional and Liberty Global’s One Video platform show the bandwidth demands of those IoT services and play for CSPs focused on long-term success.
CSPs, not least because of the significant capital possibilities a platform model opens up.16 have launched the world’s first commercial The ultimate goal: to inject ubiquitous enhanced
investments required. For consumer-focused service using MIMO spatial multiplexing (a connectivity into industrial value chains, to become
businesses, this play means acquiring or creating Connected industry orchestrators, in contrast, powerful core technology for 5G connectivity). the backbone of Industry 4.0 and beyond, and thus
the high-value content that can be sold at a take the same flexibility and openness and In further additions to their IoT capabilities, to radically improve productivity and growth.
premium through multiple digital channels, as apply it to creating and enhancing ubiquitous they acquired leading UK semiconductor
well as investing in the advanced analytics that connectivity in industrial value chains. Using designer ARM Holdings in 2016, and selected In both this play and in the multi-sided platform
can drive hyper-personalised effective customer edge-computing, advanced network security, and the Affirmed Mobile Content Cloud (MCC) to play, exploiting the pervasive network is the key to
experiences. In the B2B space, it means embedding high QoS, these players aim to create the hyper- deliver IoT services and mobile connectivity to success. This pervasive network, which combines
connectivity services right across enterprise lean operating models and digital-first platforms enterprise customers in 2018. An embedded existing network technologies with wireless
customers’ value chains, developing exclusive or that ensure premium network performance and subscriber identity module (eSIM) platform computing and digital services, is an environment
proprietary industry-specific solutions. the efficient use of Industry X.0 assets for their is also under development to promote in which the connectivity of devices is embedded
enterprise customers. Take AT&T’s Indigo platform, IoT solutions.16 so broadly and so deeply, that it’s ‘always on’ but
for example. The company is bringing together never noticed.
wireless technologies like 5G with big data,
machine learning, cybersecurity, and software- The potential advantages in reorienting to digital
defined networking to create a hyper-fast, secure, are thus clear. But for most CSPs in APAC, capturing
and private next-generation network.17 the real value on offer means embarking on a
journey. It means starting as a simple connectivity
provider, becoming a fully-fledged digital B2B
player, moving through a “connectivity ++”
offering, to eventually orchestrating entire
connected industries.
From simple connectivity …
At the outset of that journey, a connectivity
provider will look to both radically digitalise their
operations and offerings and manage total cost
of ownership with a new level of effectiveness. So,
they’ll create digital omnichannel strategies, they’ll
embed intelligence and data-driven decision-
making in their operations, they’ll introduce new
product lifecycle management capabilities, and
they’ll establish Network-as-a-Service, SDKs, and
APIs to onboard industry-specific applications.
They’ll also take steps to simplify product portfolios,
decommission legacy infrastructure, and reduce
technology complexity through double-decoupling.
10 BEYOND CONNECTIVITY 11… to digital B2B player … … to connected industry orchestrator Shifting to a revenue model based on transactions in an expanding ecosystem
As they become a truly digital B2B player, the Finally, the CSP takes on a role as the mainstay
CSP will be transforming their touchpoints with of the connected industry, whether that’s in
their enterprise customers, building end-to-end healthcare, manufacturing, insurance telemetrics, FROM stand alone, one-product service provider TO one to many, diversified communication
omnichannel propositions covering the entire transportation fleet management, Device-as-a- services enriched with Partners offer
customer journey from quotation, to order, to Service, or any other field. They’ll be rotating to the
provisioning, to maintenance and assurance. new in everything they do, adopting mindsets of
They’ll be enabling digital service management, continuous innovation, testing, and monetisation.
just like the very best OTT providers do. They’ll be They’ll be extracting value from assets embedded
applying analytics extensively (including machine in connected industry value chains, offering vital
learning and other forms of artificial intelligence) interoperability and interfaces for the markets
to customer experience, service management, they serve. And they’ll be engaging in value-based
and network automation. They’ll be improving transactions built on contextual awareness, policy SERVICE SERVICE
security and cyber-resilience across their networks, controls, and trust within their ecosystems, fortified FEE
SERVICE SERVICE
applications, and devices. And they’ll be adopting by network security, network resilience, and the FEE
network virtualisation and making plans for a traceability of network data.
future dominated by 5G and multi-access
edge computing. In this new era, the CSP’s revenue model shifts
away from one characterised by the provision
of standalone single products to one in which
… to connectivity ++ provider …
numerous diversified communication services are
As their digital maturity grows, the CSP will now enriched by the partner ecosystem.
be offering “connectivity ++” services like cloud,
cybersecurity, SD WAN, multi-access edge Consider the possibilities in a field like connected
computing, and multiprotocol label switching vehicles. In the years to come, vast numbers
PARTNER
(MPLS). They’ll be pivoting their digital services of sensors will be embedded in transportation ECOSYSTEM MARKETPLACE
to the platform economy, expanding their B2B fleets, enabling data to be gathered from vehicle
partner ecosystems, and bundling connectivity components in real time and then analysed
with third-party digital and industrial applications. instantaneously with intelligent analytics. As in-
They’ll start integrating digital twins, augmented service insights into performance are continuously
and virtual reality, blockchain, and other Industry fed back to manufacturers, a radically new kind of
X.0 technologies with internal operations (supply improvement feedback loop is created – and CSPs
chains, field service, network simulation) to create are at the centre.
new assets to serve ecosystem needs. And they’ll Key Value Service Access
embrace concepts like the “living enterprise” and Elements
“applied intelligence” as they create rapid delivery Recurring charges
capabilities, intelligent digital processes, and deep- (per service
rooted cultures of innovation and contract
commitment)
Number of
transactions
Value per
transaction
12 BEYOND CONNECTIVITY 13Connected industry orchestrator • Enabling technology. Vertical integration MAKING IT
HAPPEN:
or vertically integrated B2B rests on optimised IT solutions and networks,
with bundled capabilities for connected
service provider?
PIVOTING
enterprises, and APIs/SDKs for proprietary
The connected industry orchestrator play IP/OS. Industry orchestration, on the other
hand, is founded on the pervasive network,
WISELY WITH
shares some of the characteristics of the vertical
integration play in the B2B space. But the former enhanced with advanced software and
operations capabilities.
THE RIGHT
has a far more flexible asset model, and a much
more open ecosystem:
• Investment profile. Vertical integrators
INVESTMENTS
• Value proposition. The vertically integrated are capital asset heavy, thanks to their
provider combines digital connectivity and proprietary industry-specific solutions.
targeted, industry-specific services to create Industry orchestrators invest in
deep capabilities across enterprise customers’ differentiating assets, but acquire access to
value chains, whereas the connected industry non-differentiating or commoditised assets
through operating expenditure Whichever strategic play or plays a CSP chooses to Fortunately, there is a proven methodology to help.
orchestrator injects enhanced connectivity in
make, the same fundamental questions arise. How By understanding the transformation S-curve, and
devices right across the whole ecosystem to
• Control points. Vertical integration offers can we make such a major shift in our business how it can be exploited to both grow the core
radically improve productivity and growth.
closed, contract-based channels, using as- quickly enough to capture first-mover advantage? business and build a new business, a CSP can make
• Performance measurement. The vertically a-Service models through a one-stop-shop, How do we fund the necessary investments? Will the investments necessary to both transform their
integrated provider measures success through while industry orchestration embeds control our digital-first programmes generate enough value back office and enable the fundamentally new
vertical penetration and depth, ROI/ROCE, points deeply into industry value chains, using to do so? Or will they simply sustain what we’re capabilities needed for the successful strategies
portfolio expansion, and growth. In contrast, connected objects, policy topologies, network already doing? of tomorrow.
connected industry orchestrators measure slices, and APIs/SDKs.
Sustaining the status quo won’t be enough.
the utility return on assets (ROI/ROCE,
For CSPs intent on the vertical integration CSPs must adopt investment strategies that can
quality of service, coverage) as well as the
play, the acquisition of systems integration or both future-proof their business models and find
strength of key partner/supplier plays,
industry-specific software companies could be growth that exceeds shareholder expectations. But
with a focus on ecosystem reach and
a sensible next move. Open source initiatives many lack the available capital to transform their
transaction monetisation.
should also be used to drive de facto standards. businesses quickly enough.
• Customer engagement. Vertically integrated In contrast, for CSPs looking to become
providers look to create personalised and connected industry orchestrators, the immediate
controlled omnichannel experiences (both focus should be on acquiring 5G licences, rolling Exploiting the S-curve to make the right
high and low touch) with end-to-end project out dense fibre, and creating joint ventures and pivot at the right time
capabilities, while connected industry industry initiatives for specific markets.
orchestrators combine digital and high-touch S-Curve of transformation
channels to create embedded experiences
that also include the partner ecosystem.
New
Business
ENTERPRISE VALUE
GROW
THE CORE
Traditional
Business WISE
PIVOT
TRANSFORM
THE CORE BUILD
THE NEW
YOU ARE
HERE
TIME
14 BEYOND CONNECTIVITY 15The methodology calls for a phased approach:
1. T
ransform the core business. A CSP must
take stock of its existing technology landscape
and look for changes in its operating models
that could generate the cost savings to fund
investments in future growth. Here, automation
plays a key role, and for many there will still be
low-hanging automation opportunities that can
be picked off with relative ease (such as billing or
call-centre processes).
2. G
row the core business. Through the use of
advanced analytics, the CSP can develop a much
more sophisticated understanding of its core
business. Then generate the actionable insights
that can help monetise underutilised assets, as
well as maintain and grow the customer base.
3. B
uild the new business. Thanks to its newfound
efficiency and growing core business, the CSP
will have additional funds to invest in its new
business model, whichever strategic play or plays
it has decided to make. It can thus start scaling
the new business with targeted investments,
whether that’s developing a new ecosystem to
support a future platform business, or investing
in hyper-lean, hyper-fast premium networks
and Industry X.0 technologies to support its
enterprise customers.
4. M
ake the pivot to the new. At some point, the
CSP must make the shift away from its existing
business to focus on the new. Doing so at the
right time is critical. A careful consideration of
available funding, fluctuating market conditions,
and stakeholder expectations is the key.
16 BEYOND CONNECTIVITY 17NOW IS THE
CONTACT US :
Gopi Kurup
TIME TO MAKE gopi.kurup@accenture.com
THE RIGHT
STRATEGIC
KEY CONTRIBUTORS FROM
ACCENTURE RESEARCH
PLAY
Swati Vyas
swati.vyas@accenture.com
By understanding the key global and regional Mobile World Congress, 26 February 2018 https://www.
1
Analysys Mason, 14 December 2017 http://www.
12
trends in enterprise telecommunications, and mobileworldcongress.com/about/press-release/two- analysysmason.com/Research/Content/Comments/
then making a deliberate and distinct strategic thirds-mobile-connections-running-4g-5g-networks- Operators-cloud-markets-REN02-REN01-RDMZ0/
play to capture growth in those markets using a 2025-finds-new-gsma-study/
Data Economy, 16 March 2018 https://data-economy.
phased investment approach, APAC CSPs have an Cisco Visual Networking Index: Global Mobile Data Traffic com/alibaba-cloud-opens-its-first-data-centre-in-
opportunity to pivot away from low-growth, fast- Forecast Update, 2016–2021 White Paper, 28 March 2017 indonesia/
commoditising pure connectivity services and find https://www.cisco.com/c/en/us/solutions/collateral/
Data Economy, 1 August 2017 http://www.scmp.com/
new roles at the centre of the connected industrial service-provider/visual-networking-index-vni/mobile-
tech/enterprises/article/2104988/microsoft-pushes-
ecosystems of the future. white-paper-c11-520862.html
increased-cloud-services-adoption-asia
2
World Economic Forum/Accenture Analysis 2017,
In deciding which play to make, taking advice from VentureBeat, 16 January 2018 https://venturebeat.
January 2017 Digital Transformation Initiative:
experienced industry expertise can be invaluable. com/2018/01/16/google-will-expand-cloud-
Telecommunications Industry, World Economic Forum
infrastructure-with-3-subsea-cables-and-5-new-regions/
To find out how Accenture can help in every aspect Digital Transformation Initiative
of a digital transformation, tying consulting to 3
Telstra Annual Report 2017 https://www.telstra.com.au/
Bernama 27 February 2018 http://www.bernama.com/
13
product planning and integration, using design en/business/news.php?id=1439568
content/dam/tcom/about-us/investors/pdf-e/Annual-
thinking, scaled agile principles, and an analytics- Report-2017-singlepages.PDF IDC MarketScape: Asia/Pacific Managed Security
14
driven approach, please get in touch with us. Services 2016 Vendor Assessment, October 2016;
4
S&P CapitalIQ
The digital disruptors are closing in. Now’s the time IDC MarketScape: Asia/Pacific Next-Generation Telcos:
5
Telkom Indonesia, Annual Report 2016 https://cdn.
to make the right strategic play. A high-growth, Telecom Services 2016–2017 Vendor Assessment,
indonesia-investments.com/bedrijfsprofiel/201/
March 2017
high-revenue future awaits. Telekomunikasi-Indonesia-Telkom-Annual-Report-2016-
Company-Profile-Indonesia-Investments.pdf Telkom Indonesia Annual Report 2017 https://konten.
15
telkom.co.id/cs/groups/cem/documents/document/
Accenture Analysis
wcc011034.pdf
6
S&P CapitalIQ, Accenture Analysis
Ray Sharma, The Fast Mode, “Telkom Indonesia Intros
7
S&P CapitalIQ, Accenture Analysis New Digital Services for Enterprise and Consumer
8
Gartner, Forecast: Enterprise Communications Services, Market”, Dec 2017
Worldwide, 2015-2022, 1Q18 Update, 23 March 2018
Telkomtelstra https://www.telkomtelstra.co.id/en/
9
Telecom Review Asia Pacific, 4 June 2018 https://www. insights/news/44-telstra-and-telkom-indonesia-sign-
telecomreviewasia.com/index.php/news/featured- joint-venture.html
articles/1071-china-japan-and-south-korea-leading-the-
Softbank Annual Report 2017 and website https://www.
16
way-for-5g-commercialization
softbank.jp/annual-reports/2017/en/
10
Internetofbusiness, 28 November 2017 https://
PR Newswire, 26 February 2018 https://www.
internetofbusiness.com/china-mobile-invest-300m-iot-
prnewswire.com/news-releases/softbank-selects-
push/
affirmed-networks-to-deliver-iot-and-enterprise-
11
Kloud website http://www.kloud.com.au/ mobility-services-300603776.html
The Australian Business Review, 16 February 2016 The Network Cisco’s Technology News, 1 August 2017
https://www.theaustralian.com.au/business/technology/ https://newsroom.cisco.com/press-release-content?typ
telstras-kloud-buy-is-blue-sky-all-round/news-story/00c7 e=webcontent&articleId=1871147
599284f38283d48fc42be7a978f0
Softbank Group Press Release, 30 March 2017
Telstra Media Release, 13 December 2017 https://www. https://www.softbank.jp/en/corp/group/sbm/news/
telstra.com.au/aboutus/media/media-releases/Telstra- press/2017/20170330_04/
acquires-leading-hybrid-cloud-service-provider-VMtech
18 BEYOND CONNECTIVITY 19ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions— underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com. Copyright 2018 Accenture All rights reserved Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
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