Selling benefits, not technology (Part 2)

Selling benefits, not technology (Part 2)

Editor’s note: Part 1 of this piece, drawn from a panel discussion at RCR Live: Telco Reinvention in London, is available here.

Leveraging an expertise in reliability to deliver enterprise services

In the first installment of this story on what operators can do to return to growth,  former BT chief architect Neil McRae, now of Juniper, and Bain & Company Expert Partner Brendan o’Rourke, formerly of BT and Telefonica, drew on their decades of collective experience to sketch out the disconnect between network technologies and customer goals. But operators have a number of strengths that, if leveraged correctly, could help turn the tide of stagnant ARPA and ideally open up multiple growth vectors.

A recurring theme in their conversation at RCR Live: Telco Reinvention in London, was the organizational obstacles to breaking down barriers between the people who develop and deploy technology and the people who sell that technology. “I think the operating model change that telcos have to go through at the customer and service end is absolutely joining the business and technology teams…and putting them in front of the customer, and not have the artificial separation between the network and the products and services we deliver to the customers.” 

In a climate where hyperscalers and telcos are in a phase a coopetition that could turn as network functionality is increasingly run in the cloud as software instances, McRae pointed out that this problem has largely been solved within hyperscalers. Google doesn’t have a technology department, he said. The focus, rather is on empowering people and teams to sell the benefits of technology. For operators, “How do you get customers to think about you more than just as a procurement discussion?..That is a massive challenge to telcos because that is how pretty much every organization thinks.” 

IT services and a mastery of reliability can help operators differentiate

McRae and O’Rourke agreed with the larger industry narrative that growth will come from successfully selling network-based services into enterprises. Beyond the people part of this, to capture enterprise revenue operators also need to think more like IT services companies and play to their own strengths. 

“Telcos need to look at the best-in-class IT services businesses…and say, ‘how do we do that?’” O’Rourke said. “I think telco scan do that with the right people, the right attitude, the right approach.” Another potential growth vector would be to develop and sell a platform with connectivity at its heart. O’Rourke called out the work being done by Reliance Platforms and Rakuten Symphony–porting a tech and operational stack developed for their respective mobile arms, Reliance Jio and Rakuten Mobile, and selling it to other operators. “Telcos who have that capability,” he said, “that is a growth revenue area.” 

McRae reiterated a point that telcos do reliability very, very well. “Better than anyone on the planet,” he said. “And there are a lot of things out there that need reliability,” industries like healthcare and transportation for instance.

All that to say, telcos do need to reinvent because there is a problem causing them to continue a time of stagnate revenues, slow to no growth, and potential existential crisis if 5G doesn’t ever materially deliver on the wave of hype that propelled it. But the reinvention may not necessarily have to do with actual technology development, rather a reinvention of how the people using that technology interact with one another and with customers. 

Final thoughts from O’Rourke: “I think as an industry—we don’t often get the credit for it—but I think we innovate extremely well…We need to participate in that innovation.” He called out PE money flowing into infrastructure to realize a return on asset utilization and VC firms spending on edge computing and hyperscalers investing in transport networks. “There’s loads of money being invested in our industry and a lot of innovation at the edge. One thing I think telcos can do is…participate in that side of the growth economy and innovation on the platform we created…The telcos should get the benefit of that.” 

And last word to McRae: “What we do in telco is amazing. We have more of an impact on the world than any other industry. And if there’s another industry that has more of an impact than us, they’re using our service.”