Five new challenges for APAC telecoms in 2012

Five new challenges for APAC telecoms in 2012

David Kennedy/Ovum  |   January 05, 2012
OvumThe telecoms industry in the Asia-Pacific region will face considerable challenges in 2012 as overall growth in the mobile market slows down and competition for customers increases. As revenue growth slows, operators will be forced to improve efficiency and control costs within their businesses. They will need to do this in an environment driven by smart devices and fixed-service bundling.
 
While details vary from market to market, the overall picture is one of tightening margins. A key success factor for operators will be strong internal management to make operational changes that ensure continued profitability. Ovum believes that five major trends will drive the telecoms industry in Asia-Pacific in 2012.
 
The push for cost optimization and efficiency
 
Cost optimization will grow in importance as operators face increasing competition and margin pressures over the next 12 months. While early cost optimization initiatives will involve relatively simple measures such as passive network sharing and the outsourcing of non-core functions, more aggressive cost optimization strategies, such as backhaul sharing and access infrastructure sharing, will also begin to emerge. There is no single strategy that operators should adopt as different markets will require different approaches. However, organizing joint ventures with competitors will be challenging, especially in developed markets.
 
Opex reductions should be easier to realize than capex reductions, and opex reductions are expected to increase in 2012 through the outsourcing of network management, customer service, and other non-core business functions. Ovum expects outsourcing deals among emerging market operators to grow by approximately 50% in 2012.
 
The importance of customer service
 
Many operators are struggling to find sustainable, non-price advantages over their competitors. The current strategy is to stay ahead of the competition with a series of tactical moves including promotions, marketing, exclusive device relationships, better network coverage/reliability, and customer service.
 
As poor customer service is expensive to provide, good customer service benefits both operators and their customers. Many operators around the world are spending heavily to improve their customer service systems. This expenditure is encompassing areas such as 24/7 customer service and weekend fault repair calls. Some telcos are now also addressing customer problems over social networking services such as Twitter and Facebook. Customer service can be a significant differentiator for telcos, but any efforts must involve the entire organization and ultimately result in cultural change.
 
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