Transformation rumbles on the 2016 horizon

31 Dec 2015
00:00

More money

We asked respondents what changes they’re expecting in 2016 in terms of their business operations (sales, profits, capex/opex, headcount, wages, upgrades, etc).
Expected changes are mostly positive. Over 64% of respondents are expecting an increase in sales/turnover in 2016. Almost as many are expecting an increase in earnings. Around half plan to increase capex/opex next year.

What’s less likely to change is the number of employees - almost 63% said they expect no change in 2016. Only 19% expect to take on more employees. Luckily for the rank and file, less than 18% of respondents expect to cut jobs next year.

More good news: less than 7% of respondents said they would be decreasing wages and salaries in 2016. Mind you, around 49% said wages and salaries would stay the same. On the other hand, over 44% expect an increase in this category.

Network upgrades will also be in vogue next year. Close to 69% of respondents said they would increase network upgrades, while 54% will conduct IT upgrades.

However, R&D spend will remain largely static for 62% of respondents, while 30% intend to increase their R&D budgets.

The customer remains king

We also asked companies to tell us about the top three external and internal issues they’ll face in 2016.

For the most part, telecoms operators face external pressure from two main sources: non-traditional players and their own customers (see Figure 3).

Figure 3: What are the most serious external issues your company faces?

“Rising customer expectations” was the category that most often made the top three rankings, though it typically ranked second or third. Considering that consumer expectations ranked comparatively lower last year, this year’s results seem like a clear sign that customer-centricity and customer experience will be serious pain points for telcos in the coming year.

That’s even more true with respect to competition from non-traditional players, a category that raised relatively less concern in past surveys. Not anymore - this category topped the “external pressures” list more than any other, and outranked concerns of competition from other telcos, which usually ranked third in the rankings.

On the bright side, there’s comparatively less concern over slowdowns in consumer demand. People want communications services - but the more choices they have for buying them, the more telcos must hustle to keep their existing customers and attract new ones.

Interestingly, government regulations made a relatively stronger showing this year compared to previous surveys - they were frequently cited as a number 2 issue. That may be a reflection of growing moves by regulators and governments to address issues such as data privacy, spectrum allocations, and possibly net neutrality.

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