With major telcos cutting thousands of jobs over the last week, the spotlight has been put on the potential way forward in how CSPs (communications service providers) can improve their bottom line in the face of higher costs and new competition. Business technology journalist, Antony Savvas looks at the opportunities.
After posting their latest disappointing results, both Vodafone and BT announced their intention of cutting up to 11,000 and 55,000 jobs, respectively.
While these cuts will not happen overnight, and in BT’s case will not be completed until the end of the decade, by wielding the axe to this extent, both companies have caused real uncertainty among their staff.
At BT, the firm has only recently settled with its trade unions over a decent pay rise for its staff in the face of a damaging industrial dispute, and the announcement that tens of thousands of jobs are now to go has understandably not gone down well with those unions.
Then again, while 55,000 jobs is a major cull, the firm had previously been laying off thousands of engineers and other technical staff continually right up to the advent of the big fibre broadband roll-outs a few years ago. BT stressed that many of those affected this time round will no longer be needed to maintain a more efficient and more easily managed fibre infrastructure.
We will of course see if that pans out down the line.
In Vodafone’s case, as an even more international company, the job cuts will be far more spread across different markets, and it seems to be in a better position to benefit from new openings in the market.
It has been reported that the firm plans to sell a big chunk of its growing £1 billion (€1.15 billion)-turnover Internet of Things (IoT) business services unit to an investor, which would shore up its bottom line and aid investment in the company’s ability to serve new markets.
Commitment
BT says it is also committed to generating new activity through its Division X unit, aimed at benefiting from new openings in 5G, the telco cloud at the edge and IoT, among other areas.
After this column’s criticism last week that the firm was wrong to “lump” Division X into its products team, as part of the company’s ongoing reorganisation of its business services division, a spokeswoman for the company got in touch with us to stress that BT was committed to the Division X brand.
Although the unit was only set up around a year ago, and had already launched new IoT services, for instance, she said the move was part of a positive commitment towards serving the needs of customers. Additionally, she indicated positive news about new services through Division X would be forthcoming. Again, we shall see.
Industry analysts have said they expect to see many more jobs to go in the telco sector in the coming months, in response to a tough market and the advance of automation into additional roles, including in customer services.
On the line
We have all had to hang on phone lines to sort out basic issues with our accounts, but in some cases it is genuinely a better decision to leave a telco’s computer system to eventually sort out a minor billing issue itself, rather than immediately looking for a throat to choke down a phone line.
However, it’s not the way older customers, in particular, have been conditioned to react to their statements and bills. I have relatives who still tally cheque book stubs and paper bills stored in a plastic box every month.
And the automated ‘bots’ that telcos currently ’employ’ on websites and in apps still don’t cut it when trying to deal with basic enquiries about new accounts and new gadget charges, for instance. If you don’t have the inclination to sit and wait, like I usually do now, you’re going to have to speak to a human to put your mind at rest.
With money extremely tight for many customers at the moment, being potentially over-charged is the enemy of automated charging systems, even though they more often than not eventually get it right over time, if you can afford to wait.
New services
According to analyst house IDC, “Telecom service providers hope that the migration to all-IP and new-generation access (NGA) broadband will help offset the decline in revenue from fixed and mobile voice services.” They also expect 5G to unlock new opportunities by allowing “massive machine-type” and “ultra-reliable low-latency” communications.
These efforts are in response to spending on telecom services in Europe, for instance, only increasing by 1.1% in 2022, year-on-year.
“Telecom operators are completely transforming: from providers of traditional commodity-style services to modern full-stack technology suppliers,” says Kresimir Alic, IDC research director. “By doing so, they hope to become leaders of the digital revolution and acquire a central position in the new digitalised world.”
Manufacturing edge
Such an opportunity can be seen at the telco edge, where cloud service providers are making bread with telcos to serve the needs of enterprises, and a growing example of this is starting to be seen in the manufacturing vertical.
Last week, I attended PTC‘s LiveWorx customer and partner event in Boston, Massachusetts, and it demonstrated how the whole manufacturing supply chain could be efficiently brought together by communication service providers (CSPs).
PTC specialises in traditional on-premise CAD (computer-aided design) software, and has grown to serve the wider needs of manufacturers, through acquiring firms specialising in product lifecycle management (PLM) and even in IoT services, for instance.
At the show, partners including Amazon Web Services, Microsoft, Dell Technologies, and Hewlett Packard Enterprise were among those in attendance, in addition to a multitude of global system integrators (GSIs).
PTC is now in the process of delivering all its products to customers through the cloud on a SaaS (software-as-a-service) basis. To get its very heavyweight and complicated design software to customers, including Rolls-Royce, Volvo and various armed forces, for instance, it and its cloud partners, are going to need some very fast and reliable communications networks.
Interestingly though, and maybe not surprising for a show mainly attended by engineers and product designers, communications networks were barely mentioned at the conference, but it’s a glaring opportunity for new business for those telcos that can be bothered to jump in with both feet!
The author is Antony Savvas, a global freelance business technology journalist.
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