Co-sponsored feature: Tata Communications
Tata Communications Global Carrier Solutions
Allan Chan: Service providers need a partner to help them
migrate to new services, work in complex environments, and
navigate local ecosystems and regulatory regimes
Management consultants McKinsey & Co, along with publications such as The Economist, advise that many multinational corporations are looking to emerging markets to accelerate growth.
This provides an opportunity for service providers to boost loyalty among their multinational corporation accounts by swiftly attaining the capability to offer a total home-and-away communications solution.
However, making progress in an emerging economy characteristically falls far short of a service provider’s home market experience.
The on-the-ground reality is that incoming operators run into a number of stumbling blocks. For example, they often lack the knowhow to negotiate tricky regulatory issues, build crucial relationships with local carriers and data centre providers and cope with frustrating differences in business culture.
Even after gaining a licence, service providers face difficulties in putting it to work. Issues typically include starting from scratch to win cooperation from domestic carriers, defining how to establish points of presence, arranging connectivity between all the various components and putting feet-on-the-street to handle maintenance work.
Multi-faceted factors come into play, and a classic cumulative downfall can be that an operator’s progress in getting services up and running fails to meet an enterprise customer’s timeline expectations.
Service providers are by-passing these obstacles by finding a partner — the ideal choice being an industry player that holds a wealth of emerging market expertise, enjoys an established infrastructure presence and maintains productive working relationships with local carriers.
Allan Chan, executive vice president of global carrier solutions at Tata Communications, says: “We partner with the full spectrum of different service provider types, and across the complete range of their requirements, in order to help them serve their multinational customers in emerging markets in places such as Africa, the Middle East, North Africa, Asia and India.
“Service providers need a partner with the capability to help them migrate to new services, work in very complex environments, and navigate the various local ecosystems and regulatory regimes. That level of reliance requires service providers to seek out a partner with the pedigree, stability, substance and breadth and depth of solutions that instil trust and confidence.”
Moving up the value chain by leveraging a partnership
In parallel, service providers are looking to move up the value chain and expand their portfolio with value-added services in order to provide more value to their customers and open up new revenue streams.
The twin challenge of moving into emerging markets and up the value chain therefore presents service providers with the question: Do we have the knowledge, investment power and time to go it alone — or do we find a partner?
Chan says: “Market factors are forcing service providers to change more quickly, adapt faster to evolving demands, offer more value, provide better service combinations with greater speed to market and deploy capital more prudently. All these pressures are prompting service providers to weigh up the pros and cons of going it alone or seeking a partner that can act as a ‘service provider to service providers’.”
Given general economic uncertainty over recent years, many operators are shunning the costly gamble of developing their own solutions, such as in managed security, hosting and video-conferencing
Other reasons for not developing services in-house could be that a service provider does not possess the requisite technology, wants to enjoy higher speed to market, does not want to place additional strain on resources or prefers to concentrate on their core competencies.
As a result, many are opting for the lower-risk approach of working with a partner that can provide a richness of proven solutions capable of creating greater and stickier value among their enterprise accounts. By leapfrogging the development process, operators are often able to seize first-mover advantage, avoid long lead times and satisfy a multinational’s ongoing demands for cutting-edge services.
For example, taking advantage of managed services via resell or white-label models, as well as more leading-edge offerings, removes the costly, risky and time-consuming process of in-house development. In closer and more sophisticated relationships, some partners are even able to provide service providers with specialists — such as in business development and product management — to help explore the potential held by their multinational accounts in a more comprehensive and profitable manner.
One size rarely fits all, so operators are also seeking a partner with the ability to customise solutions and offer a choice of flexible business models.
Chan says: “Cost is obviously an important issue, but many other factors come into play when entering into a partnership, not the least of which is quality. An important consideration is that extension of reach or capability made possible by a partner is perceived by a multinational company as a core offering from its service provider. A customer-facing operator therefore needs to be 100% confident that the partner is standing right behind it, in terms of quality and reliability.”
What service providers should look for in a partner
Attributes service providers need to consider when seeking a partner to meet these challenges in the most timely, efficient and high-quality manner include:
Global reach. Look for a partner that owns and operates its own global subsea and terrestrial cable network. Partners with these capabilities are able to manage effectively, while having greater control over the scalability of their networks. They can also provide more diversity options, as well as faster delivery of services, because such self-owned network systems are under a partner’s control.
Local presence. Select a partner that has established local presence in emerging markets and has been conducting business in those markets for many years. Having the local knowledge and experience of working in these markets is a critical success factor for turning-up services quickly. Service providers going it alone often find that a direct agreement with an incumbent does not include an obligation to expedite matters with urgency, or offer satisfactory service uptime and latency SLAs. Selecting a partner to manage the relationship across local providers to ensure service delivery quality with cost efficiency, however, is a recipe for success.
Established and mature local infrastructure. A partner should have well established infrastructure, network access, and services available in-country, and be able to deliver multiple solutions and business models to meet a service provider’s requirements.
Regulatory management. Working with a partner that has knowledge of the political and regulatory environment is particularly important in emerging markets. Identify a partner that offers the option for service providers to leverage pre-existing local licenses and authorisation to do business, in order to get services up and running swiftly.
Provides value-added services. Select a partner that empowers the service provider to deliver more managed services and greater innovation to support an enterprise customer’s needs.
Comprehensive service support. A partner offering value-added services on a resell or white label basis should provide full support including components such as training, marketing collateral, business development expertise, back-end engineering and operational support.
Business customer confidence. Ensure a partner possesses the customer-facing experience that enables them to provide a value-added offering equal to the service provider’s own look and feel. This helps engender a comfort level within an enterprise customers’ organisation and builds upon the trust it has invested in the service provider over the years. .
Build-operate-transfer experience. Operators wanting support to set up their own service should seek a partner that can help them design and engineer a solution, as well as handle service delivery and assurance aspects. In fact, a partner should be able to operate such a service for a length of time until the service provider gains sufficient knowledge to take over.
On-demand. Identify a partner that enables the service provider to establish new or limited business opportunities quickly with limited risk, and provides scalability on-demand, as needed.
Win-win-win value proposition
Ideally, service providers seeking a partner to help them meet the widest range of enterprise customer needs are looking for a relationship that delivers a win-win-win result — by which every party benefits.
In this kind of virtuous triangle, the end customer gets proven solutions in a timely manner, the service provider wins business with limited investment while strengthening its relationship with the multinational company, and the partner captures additional traffic and revenues, while paving the way to future opportunities with the service provider.
Chan says: “This is a classic example of the notion that one-plus-one can actually equal more than two. Entering into a partnership is not all about dollars. It is more about the many attributes and capabilities a service provider can add to its core competencies in order to ensure a stickier and more profitable relationship with an enterprise customer.” GTB
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