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Adapting to a changing telecoms landscape in SA - by Douglas Reed
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Adapting to a changing telecoms landscape in SA - by Douglas Reed

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A discussion around what has been experienced in the SA telecoms environment in the past 5 years, and what can be expected in the forthcoming years. What opportunities and challenges will be presented ...

A discussion around what has been experienced in the SA telecoms environment in the past 5 years, and what can be expected in the forthcoming years. What opportunities and challenges will be presented to companies in the industry, and how to adapt your business models to take advantage of the situation.

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Adapting to a changing telecoms landscape in SA - by Douglas Reed Adapting to a changing telecoms landscape in SA - by Douglas Reed Presentation Transcript

  • DOUGLAS REED, GROUP MD, VOX TELECOM ADAPTING TO A CHANGING TELECOMS LANDSCAPE IN SA
  • AGENDA
    • Vision statement
    • Today’s situation
    • Available options
    • Telco strategy
    • Summary
  • VISION STATEMENT Looking forward, embracing change to take advantage of the opportunities presenting themselves in the SA Telecommunications Sector
  • TODAY’S SITUATION Global realities All companies will face these trends at some stage, but the telecoms and IT sector will lead the way
  • THE CONSUMER RULES Body copy here
    • No loyalty
    • Spoilt for choice
  • THE RATE OF CHANGE IS ACCELERATING Body copy here
    • Impossible to predict the future
    • Take advantage and embrace change
  • COMMODITY MARGINS ARE COLLAPSING Body copy here
    • Enhanced productivity
    • Globalisation
      • Didata
    • Competition
      • If you ain’t got a good differentiator then you better have a good price
  • PROSPECTS BECOME HARDER TO REACH Body copy here                                                                  
  • PRODUCT LIFE CYCLES ARE SHRINKING
  • EXISTING MARKETS ARE NOT ENOUGH
  • TECHNOLOGY IS PLAYING A PIVOTAL ROLE
  • TODAY’S SITUATION
    • Strategically, most companies have reached a performance plateau because of the following limiting factors:
      • Focusing on short term goals
      • Working individually and in small groups
      • Thinking only about products and services
      • Trying to beat the competition
      • Creating tools for specific situations
      • Being a slave to technology
      • Focused only on existing market
  • TODAY’S SITUATION
    • PBX Sector
      • Move to IP, matter of when not if
      • Cloud Computing
      • Becoming a service not a product
      • Deflation
    • Telco Sector
      • Liberalisation
      • Competition and choice
      • Deflation
      • “ Grey markets” LCR, Call Backs, etc. are reaching end of life
  • TODAY’S SITUATION
    • End of LCR
      • Massive industry +-R5b pa
      • Connection Incentive Bonus (CIB) enhanced cash flows
      • Built an annuity income
      • Subsidised Customer Premises Equipment (CPE)
      • Marginalised, 10% to 12% GP is now the norm
      • High risk
      • LCR players without networks are scrambling to either roll them out or make alliances
    • Alternative players are gaining traction
      • Vox, IS, ECN, eventually MTN Business and Vodacom Business will follow and the smaller players will either be absorbed or grow to the right economies of scale
  • TODAY’S SITUATION
    • Wireless networks are becoming effective
      • WBS
      • Motorola Canopy – ISM Band
    • Number porting at last a reality
      • Provides access to inbound minutes
        • Other half of the pie
        • Restores margins to a level that will enable new business models for resellers and alternative players
    • Regulatory environment is still a free for all
      • Despite all the noise all moves to date have been voluntary changes by the industry
  • TODAY’S SITUATION
    • On the ISP side
      • Rapid deflation lead my smaller resellers
      • Margin on ADSL customers can be as little as R5
    • The majority of the 300 so-called “VANS Operators” that received their ECNS licences are not suing them
  • AVAILABLE OPTIONS
    • Continue with current strategy if that is working
      • Logically that means you will achieve the same results and if that is not what you want it is probably the definition of insanity
    • Radically amend strategy
      • Most humans will not do a radical shift in strategy unless they are forced to
        • “ Porsche example”
    • Let the strategy evolve with market conditions and with what works
      • The future is impossible to predict and this is the strategy that I favour
  • APPLY THE FOLLOWING STRATEGIC PRINCIPLES
    • Relationship first model
      • Define the customer type
        • “ Basket Ball Company example”
      • Partner or align yourself with a telco and make the services compliment your business models
      • Do not be scared of competition or cannibalisation
    • Don’t compete provide unique value
      • Back to basics
        • Advice
      • Use telecom savings to pay for toys
        • PBX, PCs, etc. Most Vodacom subscribers care more about their next upgrade than the price they pay
  • APPLY THE FOLLOWING STRATEGIC PRINCIPLES
    • Deliver unique value through team work
      • Joint marketing plans with suppliers and vendors
      • Make alliances that compliment the each others businesses
    • Envision ideal system models
      • Contact databases
      • Electronic marketing materials
    • Annuity billing ties relationships
  • APPLY THE FOLLOWING STRATEGIC PRINCIPLES
    • Give away value to start unique relationships
        • “ Infant Drug Company example”
      • After all, that is what built your most of your businesses in the first place
      • Prices are relative
        • “ News Week example”
      • Power of free
        • “ Amazon example”
        • Most basic is advice
      • A connection to a customer is strategic
      • Take advantage of the Voice Opportunity
        • This is unique and this type of opportunity comes around every 8 years or so. Don’t miss the bus
        • Cellphone example – free phone
  • TELCO STRATEGY
    • Take advantage of the current liberalising of the telco sector
    • Economies of scale prohibit a plethora of small telcos
      • To compete
        • Require 2% to 5% of the overall market share
        • Excluding cellular, 5% to 10% market share
    • The service provider model is still relevant
      • The only reason telcos are vertical businesses is because of historical government interference and ownership
      • Telcos will be forced to change their current sale channel strategy to gain or regain market share
    • The relationship needs to be transparent
      • Similar to Nashua Mobile / Auto Page
  • TELCO STRATEGY
    • Integrate other trends
      • Cloud Computing
        • PBX
        • Business applications
      • Video over the internet
        • Comprise 65% of all internet traffic
      • Satellite technology advances
        • KA Band
        • Accelerators
      • SA is becoming the Gateway to Africa
  • IN SUMMARY
    • Relook at your strategy
      • Relationships are a competitive edge
      • Redefine your customer
    • Make the telco services complimentary to your core business
    • Provide unique value
    • See where we can work together with suppliers and other alliances
    • Take accountability for everything that happens to you
      • To not do so disempowers you
    • Don’t subject yourself to the negative influences of other people
    • Good luck, exciting times ahead we probably have more opportunities than at any time in our history
  • Q & A
  • THE CONSUMER RULES Body copy here