There is something of an evolutionary journey ahead for incumbent culture in the telecoms field – and perhaps not before time. Over the years, national and international telecoms markets have deregulated: from the break-up of Ma Bell in the USA to EU deregulation and the on-going embrace of competition in many markets around the world.
Incumbents have traditionally enjoyed the advantage of prior knowledge of deregulation and competition, potentially delivering them the opportunity to plan for their future. Historically, this advantage has been used to focus on international expansion to compensate for erosion in domestic market share (and profitability).
The issue has usually been that what looks simple on paper (or a spreadsheet) is actually a challenge – from varying regulations, unfamiliar technology, partners that do not share the same vision, local resistance to foreign service providers and, most importantly, their own culture and the ‘incumbent mindset’ – entrenched national service providers have had to adapt to no longer being the big beast and actually having to win and retain customers through compelling customer propositions rather than being the only ‘choice.’
The incumbent advantage
The deregulation journey continues around the world, giving an advantage to incumbents that have more recently been subjected to competition as they can examine the strategic successes and failures of their forbears. The other advantage they have is that they still have the resources to invest in growth markets – whether that be by geography or in expanding technology areas such as cloud, security, IoT and other emerging opportunities – from which earlier deregulated incumbents could not benefit.
However, the core challenges remain the same – evolving the incumbent culture to a truly customer-focused approach to market, making processes, systems and human resources competitively efficient, and making the right investments for growth (as opposed to spending money just for the sake of investing).