Deglobalization driving enterprise telecoms resegmentation, says GlobalData

Many once globally ambitious enterprise telecoms service providers have made a fundamental shift in market focus due to macro-economic changes such as deglobalization and to make the most of evolving technology, says GlobalData. The leading data and analytics company notes that this is a significant move because many of these companies have chosen to scale back their international ambitions by refocusing and resegmenting their target customers, and selling non-core assets.

Robert Pritchard, Senior Analyst at GlobalData, comments: “We saw a clear example of this industry shift when BT scaled back its international ambitions by selling its non-UK in-country assets. Further, Deutsche Telekom has developed a hybrid regional and super-global multinational corporations (MNC) strategy for its enterprise business unit T-Systems.

“The good news is that ‘super-global’ MNCs need sophisticated, bespoke solutions that are increasingly co-developed with their service providers. This turns them into ‘sticky’ customers for whom a swap out to another provider would be incredibly challenging. Smart service providers are also acting as honest brokers to manage third-party provision – securing ownership of the customer relationship.

“Many enterprise service providers have opted to ‘go deep’ in individual national and regional markets as global trade becomes more challenging, looking to combine fixed, mobile, and value-added services for enterprises – increasingly focused on the small and medium enterprise (SME) segment as the driver of both economic and market growth. However, Japanese giant NTT and Orange Business Services are still committed to global growth and investment, as are a number of niche service providers. Hyperscale cloud providers such as AWS, Microsoft, and Google, alongside digital infrastructure providers like Equinix, are also still driving forward in terms of global expansion and are reaping the benefits of customer cloud demand.

Pritchard continues: “Historically, the global logo customers have always been seen as the sexiest, but when it boils down to the nuts and bolts of marketing strategy and profits, the SME segment is actually the most attractive. It offers the best opportunity to win new customers, potentially provides the best margins, and organic growth – but it is becoming increasingly competitive.”

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