Launching Non-telco Services and Products in the Telecom Industry

Global telecommunications industry revenue is stagnant. At the same time, there is growing pressure to invest in bigger network capacities, digital channels and 5G rollouts. The industry is experiencing a digital transformation that is being further accelerated by the COVID-19 pandemic.

While there is certainly room to cut expenses, revenue growth is the superior metric to focus on because it will cover upcoming 5G investments. To make that happen the average revenue per customer needs to grow by 50-100%. So, the search for growth is a priority. In turn, analysts expect new releases of non-telco services to increase revenue growth for the industry compared with core services which are generally growing slowly or even declining in revenue.

Telco Product Portfolio is Broadening

One of the most promising directions is adding more products and services to your portfolio. Telcos are becoming more open to exploring markets with little or no relationship to the communications side of their businesses. There are telcos selling car insurance, software, credit cards, assorted digital accessories, home security services, electricity and much more.

We are witnessing the industry shift its focus from a product portfolio with a few high-margin core telco services to multiple lineups with many lower-margin products. Telcos are becoming retail organizations with an ability to sell both digital services and physical products to a mass market.

What should telcos know to successfully launch a new product and avoid the failure that often happens in the industry?

Selecting the Right Product

The challenge is finding the best path to take. New opportunities are constantly emerging in the telco space and every company is either looking to make a move or has already done so. There are a variety of opportunities to launch new products and services in areas such as mobile payments, e-commerce, on-demand TV, music, digital advertising, and identity management. But which should you choose?

Based on what telcos have reported about their experiences when launching new products, there is a consistent method for success. The majority of them are moving towards a portfolio with tens of bestsellers or hundreds of strong niche products instead of a few high-margin telco products.

Such portfolios need active product management to ensure that the future bestsellers are not missed, the right niches are conquered and underperforming products are eliminated. Companies need to adjust how they view their product portfolio, understand what organizational capabilities they are missing and align new product launch strategies better with the realities of telco organizations, the consumer market, and the competition.

Telco can be a great platform to reach and capture customers given the right product portfolio.