Maximizing Information in Telecommunications – key value points & opportunities

In the commodity business of telecommunications, the cost and margin drivers are extremely important.  There is a tiering in the industry as between Carriers (Telstra, Optus, AAPT), Facilities based service providers (Comindico et al) and Service Providers (Crazy John's and Fone Zone).  As you move from the top to the bottom the focus shifts from pushing massive numbers of subscribers over fixed capital and substantial interconnect costs to 100% variable costs and commissioned based business. Their needs for information vary a lot.

Since its de-regulation in 1997 the Australian Telecommunications Industry has faced a period of unprecedented change. The introduction of competition was correctly recognized by financial markets, subscribers, existing and potential market entrants as a green-fields opportunity to tap into the tremendous value of one of the largest, fastest growing and most profitable markets in the Australian economy.

It was and continues to be a market characterized by rapid rates of technological change, substantial investment requirements, high volumes and an increasingly commoditized product. In addition new entrants and incumbents alike are required (through legislation) to co-operate and, through the wholesale regime, find themselves among their competitors most significant customers. This interdependence has allowed new entrants to leverage the historical efforts of their more senior competitors and substantially decrease the barriers to entry afforded by previous network roll-outs.

Almost unique to the industry, the passage of product from the first stage of production, through sale and billing is almost entirely electronic emphasizing both the need and the reward for effective information management. With further regulated competition the process of customer churn has become practically frictionless.

In a market where service quality and extensive availability provide no shield from competition the imperatives of success in this market have emerged in sharp relief:

• leveraging subscriber margin profile information;
• ensuring the integrity of the billing process;
• managing supplier relationships to ensure lowest cost of delivery; and
• controlling operating costs

These processes are at the core of the business and support important ancillary decision making including capital expenditure and growth by acquisition – ensuring the right infrastructure is added, in the right market spaces and that partnerships serve to strengthen the core.

The need to manage these imperatives is nothing new to the Australian Telecommunications Industry. The risks to the market participants of not managing these have never been more acute. The demands placed on Boards and senior executives by shareholders to ensure risks are covered, and profit opportunities maximized have only intensified in the wake of the well published collapses both here and overseas. The market is rife with disparate systems that leave frustrated marketing and finance analysts trying to piece together the true picture of the business in the quest for the right decisions to achieve “controlled growth”.

Please contact us to explore how we can help to substantially improve information with significant and positive impact against each of the Telecommunications Industry’s success imperatives.