Highlight: Telco are no longer going to be just offering telecommunication services but their role is being evolved as techco
In the current market scenario, B2C has been traditional forte for DSPs while acting as a strong revenue turf. Though due to various market dynamics B2C has been lately saturated.To generate new revenue streams the businesses need to adopt B2B2X models. In this article, we are trying to familiarize the readers on how B2B2X can be the next big thing for the DSPs.
With time it has now become a necessity for the enterprises to follow digital transformation and modify the way they do business. Specifically, the telecom industry has expanded into new and evolving markets and is facing an ever-increasing set of expectations from both clients and partners.
This continuously changing telecom landscape needs TSPs to have their ducks in a row so that internal business processes and systems can be designed to support business goals. While doing all this, it is also necessary to ensure a seamless and on-demand rollout of digital services. That’s where the B2B2X i.e. business model comes into the picture.
The B2B2X business model isn’t new to the market, but it is ever-evolving. It is basically defined as a business model in which a TSP is prepared to offer services to any number of end-users. The prime idea is to combine telecom and IT service capabilities with software utilized by organizations to deliver services to consumers, partners, retailers, suppliers or any entity that can be ‘X’.
Examples of B2B2X models in action today involve interconnect and roaming partnerships and collaboration with DSPs like Spotify and Netflix. Such models offer value in multiple ways, like for CSPs they provide an opportunity to create more related services for end-users that imply increased revenue and an enhanced customer experience. For the partners, B2B2X presents an opportunity to lower the barrier to conversion by getting access to millions of customers on the network.
Let me tell you it starts by expanding the partner ecosystem.
For most TSPs, the top priority is to identify practical business models and create meaningful revenue streams; especially in the case of 5G. Until you figure out what works best, you need to be prepared to create fast solutions. It’s not easier to quickly launch services in the new industry verticals. The time and efforts invested in such a task reflect how difficult it is to do it singlehandedly.
This goal can be achievable by considering an ecosystem that offers an opportunity to convert lofty aspirations into achievable aims. Instead of focusing on R&D efforts on building novel services for niche customer segments, your clients can try filling the gaps wherever required. The more partners you have, the more is the diversity and the more are the opportunities you can relish to fulfil the variety of needs of the consumers. With a vast and varied clientele, you have the ability to expand your revenue streams by spreading into new industry verticals and levelling up the application of 5G with differentiated services. The best part is that with the B2B2X business model you can move beyond offering just connectivity that implies you’ll have the opportunity to expand your reach within the 5G value chain.
The only thing that bothers providers in a B2B2X model is if they will still be able to control their relationship with the customers. As per research conducted by TM Forum on telecom marketplaces, it has been found that the majority of the industry is interested in operating a partner marketplace that allows being in full control of the relationship with consumers. Thus, the answer to who owns the B2B2X customers isn’t straightforward.
There are a variety of permutations and combinations that are needed to be considered when talking about the B2B2X model. Here X can be any combination of consumers and enterprises.
There are instances where TSPs are the second ‘B’ (B2B2X); in this case, telecom providers would directly in relationship with the customer (be it an enterprise or consumer). In such a structure, the partner offers services to a TSP, such as digital music, which is then bundled with their personalized services before offering them to the end-user.
There are other cases too where TSPs are the first ‘B’ (B2B2X), this implies that they’ll offer services to a partner, who then will offer services to the end-user. In current times, this is the most common scenario. For example; a car manufacturer can be the second ‘B’ and have a direct relationship with the consumer while the TSP offers connectivity in the background.
Considering all the dynamics in play, collaborating with enterprise customers to seize the B2B2x opportunity is a game-changer. This is a great opportunity, but the fact is telco industry doesn’t have all the skills available readily to hit the ground running. The goal is to improve the value to the target customers by intelligently integrating telecom expertise and IT capabilities with the right combination of business services.
For this, it is essential for a CSP to partner with a trusted technology services provider that can bring their product innovation culture and engineering expertise together and merge them seamlessly with their in-depth understanding of chosen businesses. The partnership of TSPs with such a company can bring out the best of both worlds.
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