Ken Kennedy: The Telco Industry’s Identity Crisis and Why It is a Good Thing

As communications service providers continue to move beyond connectivity, we will see larger cultural shifts this year as they re-think their identity and how they do business. The most successful CSPs will begin to act like the technology companies they traditionally supported, adopting innovative business models, expanding offerings like network-as-a-service, zero-touch partnering, and Internet of Things.

CSPs that embrace the journey from telco to techco will thrive and become true innovation partners for their customers

This year and in the years to come we will see CSPs build tech hubs to help them deliver innovative ecosystems that support a wide range of verticals, from healthcare to banking to gaming to agriculture.

Complex partner ecosystems will also emerge, and CSPs will need an end-to-end solution to drive marketplaces and create dynamic, interoperable ecosystems that deliver industry-specific solutions.

In parallel, CSPs will need to manage the partner settlement lifecycle and withstand the high volumes that digital services create. However, to get there requires a genuine cultural shift. To be nimble, CSPs will have to find partners who can help them think bigger, invent new revenue models, minimize go-to-market costs, and maximize profits.

This tech-forward transformation goes hand-in-hand with the emergence of innovative new business models

While the B2B2X business model (an extension of the business-to-business market in which a telecom service provider is primed to deliver services to any number of end users) is not a new concept, it is evolving as CSPs start to recognize the revenue growth potential of offering their network-as-a-service. Coupled with continuous growth in 5G and IoT, the rise in NaaS will impact the CSP and partner positions in the B2B2X model. As a result, a new dynamic will become prominent – one we like to call the reverse B2B2X model.

In this model, the CSP plays the role of the first “B” in B2B2X and provides connectivity services in the background, whilst the partner represents the second “B” and gains a direct relationship with the end-user, or the X.

In 2022, the reverse B2B2X model will become a natural part of the ecosystem and require CSPs to adapt their role accordingly. They must be open to new partnerships, whether they will have a direct relationship with the end-user, to expand their 5G revenue potential.

As 5G revenue opportunities continue to emerge in the enterprise sector, it will be crucial for CSPs to package their expertise, technology, and 5G capabilities in ways that effectively help enterprises realize their digital transformation strategies. This business model will help them take the extra step toward a techco mindset.

Overall, this cultural shift in the industry will impact how CSPs bundle their offerings, approach their customers, and lay the foundations for vertical and ecosystem services that include core software-as-a-service solutions in new innovative ways for billing, settlements, and connectivity.

As the market rapidly evolves, The Reverse B2B2X Model, combined with a corporate techco culture and agile approach to services, will help CSPs dynamically mature into tech hubs, seize 5G market opportunities, and secure greater market share.

Ken Kennedy is the COO and head of revenue management and digital monetization at CSG, a revenue management and customer experience software provider for the telecom industry. Kennedy has more than 20 years of experience working in the communications sector with telecom, cable and broadband providers. This Expert Opinion is exclusive to Broadband Breakfast.

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