Strategic Positioning

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Market Scenarios and Recommendations for Operators

Business and society are confronted by a second major wave of digitalization competition. This wave will fundamentally change the general conditions of competition while presenting the various players with new options for action.

Detecon has analysed the positioning alternatives for network operators: they have the choice between a more infrastructure-oriented business, or a business model that continues to include the service layer. The various positioning options can be mapped along an added-value chain. 

Positioning Alternatives for Network Operators

Which of the various alternatives – or a positioning between these two extreme points – will be viable for an individual carrier depends largely on its available assets and ambitions. The core assets here obviously include the network. Ideally, network operators have both mobile and fixed network domains. The synergies between these two domains in production – network planning, roll-out, and operation – as well as in the provision of services to customers are huge. The degree of network integration is a key comparative competitive advantage.

Much the same is true of simultaneous presence on the private and business customer markets. Here, too, success on the one is a prerequisite for success on the other. Other important assets include brand strength and market share as well as the sheer size of the markets. These factors influence negotiating power vis-à-vis suppliers and partners. Last, but not least, variances among the aspects of the network operator’s financial strength are critical when making the decision about positioning in one direction or another.

The Second Wave of Digitalization Competition is Generating Momentum for Telcos

In the first wave of digitisation competition, the internet giants were successful in a largely absence of regulatory conditions and industrial policy ambitions. The second wave is now taking place in a much more regulated environment. Our analysis shows: Previously dominant developments such as the enormous market power of many hyperscalers are not unchangeable for telecommunications companies. A call to use the momentum of digitalisation now. Read more!