SERVICE PROVIDERS: Co-opetition in Communications

The
telecom revolution has transformed the way business is done and
lives of people. Technology has no barriers. What was a figment
of imagination just about a few years back has today become an
integral part of our lives. The customer today has a large
number of options to choose from and has a daunting task of
selecting the most relevant technology for his needs. More so
because different service providers are jostling with each other
to take the bigger slice of the telecom cake and the din created
by them has left the hapless customer wondering. Till now most
of the technologies and services have been operating
independently trying to carve out their own niches but on
careful analysis one would observe that most of these
technologies and services can play an important role in spurring
the growth of other services. It is, therefore, important to
work on a coherent strategy of co-operation among various
technologies and services, which are closely enmeshed with each
other.

Establishing
Synergies

In
the countries with advanced telecom infrastructure and mature
markets, we have seen a string of mergers and acquisitions in
recent times. The long-term strategy of these alliances is to
create mammoth organizations to control large and varied telecom
networks and to take advantage of the convergence of
technologies. This will also result in synergies of businesses,
which will ultimately lead to increased efficiency and
optimization of cost of operations.

The developing countries,
especially in Asia Pacific region, are catching up fast with the
advanced world by deploying world-class technologies to build
comparable telecom networks, which will enable them to quickly
bridge the vast technological gap that exists today. In order to
surge ahead and create lucrative businesses through increased
penetration levels, the telecom companies operating fixed,
cellular, paging, Internet and cable TV services have to
co-operate with each other to convert their operations into fast
growth engines. The technologies are so closely inter-linked
that one service can become a catalyst for the growth of other
service.

Anarchic
Conflicts

If
we track the recent trends in the newly developing markets, we
would observe that different service providers have been waging
relentless wars with each other to gain market shares. To cite
an example, cellular and paging service providers have been
competing with each other for a bigger pie but on close
analysis, the linkages between these two services are too strong
to be ignored and do not warrant competition. This has already
been proven in the advanced telecom markets where 60 percent of
the mobile phone users also carry pagers. The calls on mobile
phone can be diverted to the pagers and it is a very useful
proposition for the cellular subscribers to reduce their bills
where they also have to pay for the incoming airtime. In the
regions where the Calling Party Pays (CPP) concept has been
implemented, the callers need not pay higher tariffs for calling
up the mobile phone and can always send the messages on the
pagers and the mobile phone subscribers can call back, whenever
required. Similarly, the fixed
service providers have gained tremendously from both the paging
and cellular operations world-wide where millions of additional
calls are being generated on the fixed networks.

Likewise, a higher
concentration of fixed telephone lines can be a boom for numeric
paging. The cellular phone service companies have a great
opportunity with the commencement of
global satellite mobile telephony and the satellite phone
companies have an option of positioning their GMPCS handsets as
normal mobile phones while being in the cellular phone companies’
coverage areas. With the integration of these two services into
one package for the customers, the mobile subscribers can cover
the entire planet. While availing of this dream facility, the subscribers can also optimise the communication costs by using
dual mode handsets.

Internet is another
technology, which is driving fixed, cellular, and paging
services to the new realms of growth. The demand for tools like
e-mail and connectivity to office networks and databases is
growing rapidly in today’s business world and the use of
Internet has proved to be a very important driver for the growth
of wireless data market. The convergence of Internet and paging/GSM
technologies will provide the customer with access to a huge
reservoir of information in the mobile environment.

With the advent of the
concept of virtual mobile office, where the subscribers can not
only get their e-mails while on the move but can also do web
surfing at ease has attracted a large number of subscribers to
mobile services. Internet has, therefore, led to an increase in
revenues for fixed, cellular and paging service providers. Even
the data carrier companies can now take advantage of the new
trends of wireless data access.

With the convergence of
technologies becoming the order of the day in the advanced
countries, the cable is increasingly being used to carry voice
and data and a number of companies are seriously looking at
providing telephony and Internet services on the cable
television networks. The existing two-way cable networks
designed around fibre optic can create a super highway and can
reduce the infrastructure costs of building a fixed telephone
and Internet networks. This shall also result in providing a
quick access to the large base of cable TV customers. VSAT-based
service is also facilitating the creation of backbone networks
for paging and cellular networks especially for roaming and is
also resulting in major cost benefits to the
companies.

New
Perspective

It
is, therefore, imperative that different telecom companies need
to take a broader view and a combination of several technologies
and services can actually add value for the customer. It is
critical for different service providers to come together to
increase the level of co-operation to take advantage of the
additional opportunities provided by other services. A concept
of co-opetition instead of competition has to be evolved where
all the services thrive. The different service providers should
continuously interface with each other to work on areas of
mutual interest. The first and the foremost
activity should be aimed at the finalization of benefits that
accrue to one service because of the other. Let us take the case
of paging and cellular services, which have an ample scope of
gaining from each other. The experience in the advanced
countries has shown that paging and cellular have been
extensively used as complementary services by the subscribers
and this has led to an increased customer satisfaction and
higher customer retention. Paging and cellular service providers
in the developing markets should forge strategic alliances with
each other and to effectively market this concept. This can be
done through an educative advertising campaign highlighting the
benefits for the subscribers and alternately, the companies can
also run a direct mail campaign for selling the concept of
paging as a tool to complement the cellular phone. Similarly
paging and cellular service providers can tie-up with Internet
service providers to extensively promote the concept and
applications of Internet to their
subscribers.

This will not only spur
the growth of Internet but will also help in creating a number
of applications for both the paging and cellular subscribers. In
the initial stages, the customer profiling data can be used to
target the heavy business users and this can subsequently extend
to other market segments.

Fixed service providers
should closely work with paging companies. One such opportunity
is to create a large network of PCOs which shall not only give a
fillip to the population of numeric pagers but will also lead to
increased revenue generation for the fixed service providers.
Likewise, there are a large number of other opportunities, which
the companies need to tap for the overall growth of the market.

In order to rope in more
and more customers, special tariff plans and packages should be
worked out for different segments of the markets. Joint
marketing teams from different service providers have to be
formed to maximize the focus on increasing the level of
co-operation and opening up new avenues for the service
providers. The technical teams have to work closely with the
customers to suggest optimal solutions according to their
specific needs and should aim at reducing the overall
communication costs of the subscribers.

The development of newer
and faster technologies is adding new dimensions to the telecom
services market and the service providers need to continuously
explore the newer areas, which can add value to their business.

The concept of co-opetition
shall go a long way to enhance the revenue streams, build
favourable brand equities, increase the customer retention and
ultimately lead to a win-win situation for everyone.

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