Rise of the enterprise

Ian Watterson
19 Mar 2012

There is growing interest in serving the enterprise market among global service providers. While business customers have always represented a steady and profitable income stream for operators, we’ve now hit an inflection point where a number of factors have come together to focus interest even more sharply on this sector and accelerate growth opportunities.

These factors include falling ARPU, the rise of cloud computing, the need for enterprises to manage their employees’ mobility, the drive in all sizes of business to cut costs and the recognition of the need to retain enterprise customers by creating more value for this segment. On top of these are the "game-changers" of NBN/ultra-fast broadband, and emerging segments such as M2M, which are demanding new, two-sided business models and the forging of partnerships.

So what are the telcos doing about enterprises? Alert to the need to attract and retain profitable and less fickle enterprise customers, operators are adopting some of the strategies they have implemented for consumers. These include being able to provide a one-stop-shop for equipment, technology and the services; and more innovative pricing that appeals to the corporate wallet.

Being able to offer a single bundled offering is advantageous to both parties: the operator gains more share of the customer’s ICT dollar while the customer gets a single point of contact and flexible, reduced pricing. Flexibility is a key word here: the most successful telcos can accommodate the requirements of their largest customers by offering customised pricing, bundling and billing to suit their needs. And they need to be able to do so economically and quickly, or the costs of maintaining the customer, and the time to bring the deal to market, outweigh the advantages of being so flexible.

Part of the cost reduction for operators is, ironically, bringing work in-house. In this era of outsourcing, many customers are adopting a do-it-yourself approach to configuring their billing for enterprise customers. They like to be autonomous – with potentially many changes to be made to adapt to new or existing customers’ requirements, they don’t want to be reliant on a vendor for customization.

Another billing aspect that operators’ enterprise divisions are borrowing from their consumer cousins is real-time (online) charging. While the concept is associated with prepaid billing for consumers, the benefits are only now being recognized at the enterprise level – for both operators and their business customers. For operators, revenue assurance is improved immeasurably, with the ability to monitor and manage customers’ spend in real-time rather than wait until the end of the month, or longer. Real-time monitoring of spend also appeals to the customers: they are able to budget more readily, and the ability to monitor SLAs and contracts means that both parties know where they stand, particularly when a reporting application is used.

Online charging also offers consumer-like pricing and charging flexibility to corporations to enable them to control their spend. The concept of the ‘hybrid’ account for a corporate customer is no longer a figment of vendors’ imaginations. Businesses are attracted by the concept of paying their employees’ mobile bills for business hour calls but not in the evening, when the charges might go onto the employee’s personal, prepaid account. Providing intranet access but not Facebook also appeals.

In learning some of the lessons from the consumer world, telcos’ business divisions are able to move quickly to provide compelling value propositions to their customers. The demands and expectations of the consumer and enterprise user are converging.

Ian Watterson is CSG International’s VP and MD for APAC

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