posted by Brian Johnson
Recently, there have been a number of high profile mergers and acquisitions among the largest companies in the telecom and media industry.
Strategies to create competitive advantages
The telecom industry has undergone enormous transformation in the last decade, technological advances and birth of web-scale companies have significantly altered the composition of the market. The competitive landscape is therefore quite different as well.
Telco companies are betting on different strategies with the goal of creating their version of a sustainable future. T-Mobile/Sprint are looking to scale. Vodafone is entering adjacent markets. AT&T goes bold and banks on becoming a major producer, provider, and distributor of content across their networks. And Verizon has their sights set on delivering the best network experience.
AT&T: Content is King
AT&T is attempting to integrate and leverage core media assets such as Time Warner’s film and TV production studios with cable news like CNN. Its aim is to directly distribute content to the 170 million customers across their wireless, wireline, and satellite systems. The content will allow AT&T to compete with non-telco players such as Netflix or Hulu, presenting them with greater advertising opportunities. Additionally, AT&T plans to offer its own streaming service which will carry content produced by WarnerMedia.
AT&T is expanding horizontally across the content industry, being the creator and the distributor. Concurrently, the carrier plans to deploy and launch a new 5G network nationwide. AT&T is sailing into uncharted waters and entering a whole new world.
AT&T is implementing an untried strategy, and so far there are no copycats. If it works, it’ll be only a matter of time.
Verizon: Best-in-Class Network
Verizon made a substantial acquisition almost five years ago spending $130 billion dollars to buy out 45% of its partner Vodafone. The move has further enabled Verizon’s plans to become the industry standout by means of network quality, leading the charge in 5G, network virtualization, and the Internet of Things.
Verizon’s “intelligent Edge Network” (iEN) and Network as a Service (NaaS) strategies are the complete antonym of AT&T’s approach; the focus is on building the most intelligent, adaptive, service-aware network which will carry Verizon content as well others’, like Netflix and Hulu. While Verizon leverages their acquisition of Yahoo, their differentiator focus remains building the absolute best network.
What Is Needed To Succeed
It is impossible to predict which of the two differing strategies will prevail. Some things, however are clear. The mobile industry is saturated and wireline and cable customer growth is flat or declining. The reality is there’s little to none net-new customer growth in the telecom industry and companies look elsewhere for growth.
Both companies must earn their customer’s loyalty by focusing on providing greater personalization and intelligently interacting with them. Regardless of which business strategy will prove itself, customers will gravitate toward and stay with the company that delivers the most relevant services and meaningful experiences.
To do this, they will need digital intelligence capabilities that provide insights into customers to build better marketing campaigns, messaging, and app experiences. Without a focus on customer experiences that delight, enable upsell/cross sell, and increase retention, neither strategy will work.
Thanks for signing up. Look for your first email shortly!
We’ll reach out shortly to schedule a time to talk.