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The State of the Communications Industry: More Connected Than Ever

As of July 2020, according to real-time data from the GSMA, there are more mobile connections in the world than there are people. That’s 10.01 billion connections versus a global population of 7.79 billion. And in the wake of lockdowns during the COVID-19 crisis, those numbers will only go in one direction: up.


The numbers are huge, but the implications for communications service providers (CSPs) are even bigger. Up for grabs is worldwide spending on telecoms and pay TV services that the IDC projected to reach $1.647 billion in 2020. With the emergence of challenger brands, which range from nontraditional telcos, to agile digital-first competitors, the battle for the hearts and minds of subscribers will be fierce.

The Most Important Connection

If it wasn’t an imperative before, it is now: CSPs must rapidly digitize in order to become agile enough to keep up with customers’ increasing demands for experiences that are convenient, easy to navigate, and tailored to their needs. The companies that can deliver these experiences will make the most important connection of all: Loyal, long-term subscriber relationships that can withstand change.

Subscribers today expect the convenience and personalization offered by the likes of Amazon, Netflix, Apple, Google, and other digital giants in the information, communications, and technology (ICT) space. Fair or not, these are the new benchmarks that subscribers are comparing CSPs to — and it’s rewriting the rules of engagement for CSPs.

The good news? The goal of satisfying today’s subscribers can provide long-term benefits for CSPs. By reevaluating how they’re equipping themselves in this new reality, CSPs can also reduce the complexity they’re managing — from products and bundles that only serve extremely small segments — to the legacy IT systems that are rigid, entwined, and costly to maintain.


The Challenge of Keeping Subscribers


What are the key driving factors leading to churn among subscribers? Research reports often cite the usual suspects of “service, quality, and price.” It’s not that CSPs aren’t equipped to satisfy these demands. The problem is subscribers can have a different definition of what the best service, quality, and price is for each of them.

If you know what subscribers are looking for, it’s a lot easier to satisfy them. The catch? CSPs are typically saddled with legacy systems that aren’t connected to each other. This proverbial landscape of siloed data makes it difficult to get a single, 360-degree view of a subscriber across lines of business.



For CSPs with multiple subscriber segments and service types, each with separate payment methods, price plans, and systems, the silos become impossibly complex and expensive to manage. So even if you know what a subscriber wants, it can take so long to configure services, plans, and prices to meet that need, that the opportunity is lost. In other words, most CSPs are simply not agile enough to respond to the changing needs and expectations of today’s subscriber.



Down 36%

Estimated drop in spending on traditional communications over the next 10 years.


Up 2–5%

Simple and digital-first CSPs drive higher annual revenue growth than industry peers.


To add even more fuel to the fire, entrants like Facebook Messenger, WhatsApp, Apple FaceTime, and Google Hangouts are taking the traditional revenue streams of voice calls and text messaging from CSPs. As headline-grabbing migrations to Zoom and Microsoft Teams during the COVID-19 lockdown have shown, users can quickly adapt to technologies that were previously new to them.

At the same time, emerging digital-first CSPs are taking their own share of the market. The net result will likely be a drop in spending on traditional communications services by 36% over the next 10 years, further pushing incumbent telcos to the fringes of voice and data provision.


Up Next: Chapter 2: Growth Requires Top-Notch Customer Experiences


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