The Oliver Wyman CMT Journal, Vol. 2

This edition of our journal is devoted to insights on how to navigate increasingly competitive and digitized markets. The six features in this edition present our latest thinking and explore the most relevant challenges, while suggesting promising approaches for mastering them.

The first two contributions look at transformational moves to ensure fitness – and thus survival – in consolidating markets. The second part of our journal focuses on revenue topics from very different and distinct angles. In our article on “Modern times”, we take a different angle again and look at the telecommunications business from a regulation perspective. An interview with Javier Albares on the future of different operating models and technology trends concludes our ecosystem chapter.

Realizing a Long-Term Vision of an Efficient Operator Group

As the exhibit shows, the long-term vision of an efficient operator group fully realizing its efficiency potential will be a combination of a central “hub” organization that provides central infrastructure and back-end services for multiple lean local “spokes”, which focus on customer-facing and local market functions.

National organizations are kept “lean” by defining the functions that are considered “core”, and therefore need to be provided in-house, and by outsourcing all other local activities (such as contact centers and technical field services).

Achieving this “target blueprint” requires a long-term commitment to a stable goal and a structured program that achieves short- and mid-term efficiency measures in well-defined intermediate steps which are digestible for day-to-day management.

1What are telecom’s key challenges today?

Compared to where successful players will be in ten years’ time, most telecom operators are still running at high levels of cost and complexity. Therefore, the push towards simplification and efficiency must continue. Fuelled by consolidation and new technology, there is a renewed interest in a return to growth, with significant competence differences among players. In emerging markets, the key challenge is to maintain growth, further shifting attention towards value. Also, the need for operational and cost efficiency is kicking in – a major challenge for managers who are mostly commercially-minded.
2How can operators reignite growth?

Most operators are getting to grips with their role as enablers in the digital world and are seeking to become better at extracting value from the core services they provide. Market consolidation, mobile traffic explosion, the internet of things, video, and mobile banking create key top-line opportunities. We also foresee a renewed arms race in analytic technology and capabilities to outsmart competitors when interchanging customers with them. We are increasingly active here – the article on churn in this edition of the CMT Journal is an example.
3Does cost cutting still have a role to play?

Indeed. A lot has been done, but few players have looked 10 years into the future and aimed to radically redesign their operating models. Therefore, even well-run operators in mature markets can extract further value from cost efficiencies – and even more so in emerging markets. This CMT Journal’s lead article discusses group synergies as an untapped source of efficiency; another, “90% of an iceberg is underwater”, explains how simplification not just drives efficiency, but is key to ‘digital-grade’ customer experience. Happy reading!