Prediction 4: B2B Market Segment Trumps Consumer

September 27, 2018 | Industry Insights

Historically, telecom carriers and service providers have focused on capturing growth in the consumer segment. Especially over the past decade, where the primary concentration to secure buyers in an oversaturated mobile market created an abundance of competition and staggering churn. This inevitably gave way to detrimental price compression, placing severe pressure on profitability for B2Cs that resulted in decreased profit margins. The industry then began to shift its attention to the more lucrative percentage rates offered by B2Bs. This coupled with the longer-term relationships and reduced churn has made enterprise businesses a much more attractive base to pursue.

In addition to profitability and longer-ranging partnerships is the technology component. The migration to the cloud, SD-WAN, and other innovations are placing network providers in the forefront and the need for unified communications that can be stratified over existing networks at scale pose an immense opportunity. Enterprises, especially larger ones, are willing to pay more for these integrated, managed services particularly when they are bundled with security products or more specialized capabilities.

One of the biggest challenges for network providers during this shift is access. Network providers must solve for the last mile, wherever the enterprise is located. Understanding the competitive landscape of who has connectivity at the last mile and how to deliver solutions and manage these solutions is a challenge that needs to be addressed. Providers with last-mile market reach and location intelligence will be in the best position to serve their enterprise customers.

Final Thoughts

The push to 5G will continue to fuel the B2B appetite, and the need for telecom services will expand. Enterprises will require greater mobility, more storage, and tighter security. Providers armed with competitive insight and a full knowledge of the ecosystem will be poised to seize these opportunities with a focused approach and targeted offerings.

Author: Connectbase

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