This site uses cookies to ensure the best viewing experience for our readers.
Why and how should CSPs engage the enterprise market?

Opinion

Why and how should CSPs engage the enterprise market?

Enabling and supporting enterprises in their digital journey represents an important opportunity for revenue growth for the service providers, argues Alon Berman

Alon Berman | 10:54  26.01.2021

The enterprise opportunity

Through Covid-19, enterprise digitalization efforts are accelerating, and digital technologies continue to disrupt and transform industries worldwide. According to Ericsson’s report: “5G for business: a 2030 market compass”, the potential of global ICT revenues enabled by 5G, will be up to USD $700 billion in 2030 across 10 industries.

With 5G being deployed, service providers increasingly realize the new business opportunities that digital transformation of the enterprise market will bring. According to Ericsson’s report – “Capturing business opportunities beyond mobile broadband”, many global service providers foresee growth opportunities in using 5G to solve enterprise pain points.

Alon Berman is General Manager of Ericsson Israel. Photo: Ericsson Israel Alon Berman is General Manager of Ericsson Israel. Photo: Ericsson Israel Alon Berman is General Manager of Ericsson Israel. Photo: Ericsson Israel

Service providers position

In Israel, the cellular market is dominated by fierce price competition among five MNOs. Very low ARPU and challenging financials command a search for new revenue streams to create shareholders’ value. 5G deployment started in Israel in 2020 and is expected to expand in the coming years. Since revenues from connectivity are expected to remain stagnant at best, Israeli CSPs should extend their focus from traditional revenue streams to digitalizing targeted industries.

Luckily, the local service providers are in a strong position to capture opportunities related to industry digital transformation. They already have strong customer relationships with enterprises; they have extensive network coverage and have knowledge of connectivity requirements. They can leverage the increasing number of connected devices, as well as offer related digital services.

A strategic choice

To effectively capture this growth opportunity, service providers must build a clear and consistent end-to-end digital strategy. For this purpose, we at Ericsson suggest applying a framework detailing the key dimensions service providers must address. This includes an analysis of the “where to play” dimensions, to define the ambition and target position in the enterprise market. It is critical to focus on few industries as a first stage. When selecting which enterprises to target, CSPs will probably focus on their existing customers, but they should also look at criteria such as solution scalability, reuse of investments, and digital maturity.

Service providers can adopt a vertical focus, a horizontal focus, or a hybrid of the two. A horizontal focus is implemented by providing scalable solutions, leveraging connectivity and platform services across a broad range of industries. A vertical focus aims to provide industry-specific solutions and applications as well as specific services on top of connectivity and platforms.

The power of private networks

Service providers should consider private networks as a key offering to the enterprise market. Private networks are an important enabler for digital transformation for many enterprises, providing the much-needed critical connectivity with the right resilience, reliability, and security. Through the deployment of private networks, service providers will be exposed to other enterprises’ pain points and can be in a position to provide the right solutions. Service providers should aim to take on the role of service and platform enabler providing customers with the platforms to digitize and transform their processes. As technologies, standards and ecosystems evolve and mature, service providers will be able to add new applications by leveraging an ecosystem of partners. By that, they will eventually become an end-to-end service provider with the ability to support more advanced technologies and services.

Related Stories

Service providers that have not yet defined the strategy for approaching targeted enterprises should do so now. According to our report, the most common industries prioritized by service providers are: Transport & Logistics, Manufacturing, Energy and Utilities, and Healthcare.

Execution strategies

An important tier of the digital strategy is execution strategies, referred to in our framework as “how to win”. Here, service providers might experience major gaps in business, technical and operational capabilities, that are critical to succeed in the enterprise segment beyond mobile broadband.

In our report, “Capturing business opportunities beyond mobile broadband”, the five major gaps mentioned are:

  • Effective B2B and B2B2X go-to-market

  • Leadership and culture

  • Industry knowledge of targeted verticals

  • Skills

  • Service orchestration, assurance, and automation

Enabling and supporting enterprises in their digital journey represents an important opportunity for revenue growth for the service providers. However, major capabilities gaps might prevent them from taking the right position up in the value chain. We believe that the Israeli CSPs can overcome these complex challenges by adopting a proactive approach to closing these gaps and developing the required capabilities and new skills.

Alon Berman is General Manager of Ericsson Israel.

share on facebook share on twitter share on linkedin share on whatsapp share on mail

TAGS