Rakuten Symphony CMO Geoff Hollingworth (pictured) told Mobile World Live (MWL) operators need to conduct a frank assessment about the type of business they want to pursue during an interview in which he predicted a greater number of non-traditional players would soon rattle the market.
Speaking as the company launched a report outlining its vision for how to push growth in the telecoms industry, the executive argued there is a “business model problem” rather than a technology one, with a need to “address how we make money”.
Estimating 95% of enquiries to the software and platform company had the end goal of cutting costs, Hollingworth noted this is due to operators not knowing “what else to do” and not believing the promise “future technologies” such as 6G would bring the cash in.
However, telecoms players “do understand we need to get operating costs down”, with companies set to “keep laying-off people to make sure we maintain a better margin and free cash flow”.
“You cannot reduce yourself out of a hole,” Hollingworth added. “That’s the problem the industry has, but there hasn’t been enough discussion on how” to drive growth.
Change.
In its report, the company offers three main strategies operators can pursue: being a “good utility business” with a cost structure more akin to other players in the field; building a wider offering including links to products and services offered by partners or affiliates; or becoming a platform provider, moving beyond basic wholesale to provide rounded capabilities to third parties focusing on specific market segments.
“All operators should decide what they want to be, then be really good at that,” the executive told MWL, noting there is a good business to be had in any of the three options if operators commit to one. However, he emphasised the status quo is not working.
“The industry hasn’t changed very much in the years its existed, it still measures itself on ARPU and churn. They are the two metrics everyone reports. Those two are great when you’re in a growth market, not a saturated one because suddenly every customer you take is from” someone else.
“Then what happens is you have a price driven landscape with no differentiation and no loyalty at all. You end up buying subs by offering a lower price to get the numbers up, while competitors are doing the same to you”.
Inability to generate the desired returns from the traditional telecoms market is a factor regularly cited by industry commentators and often acknowledged by operators in arguments calling for regulatory changes and more business-friendly policies.
I don’t think Elon Musk has put 10,000 satellites in the sky to be a support act to existing MNOs and business models
Geoff Hollingworth, CMO
Rakuten Symphony
However, the Rakuten executive pointed to an increased urgency to address the situation due to the threat of emerging players.
Highlighting the MVNO launched in the UK by financial technology company Revolut as an example, he predicted more companies which “really focus on customer segments” would move into the market alongside potential future competitors using eSIM platforms or satellite connectivity.
“The reality is going to be the competitive landscape is going to become a lot more crowded for traditional operators,” Hollingworth said, speculating within this “I don’t think Elon Musk has put 10,000 satellites in the sky to be a support act to existing MNOs and business models”.
“I would advise anyone in the industry to at least consider he has some self-serving interest there and he’s not going to play by the traditional rules”.
The post Rakuten Symphony CMO mulls operator identity crisis appeared first on Mobile World Live.
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