After offering unlimited voice and data packages, MNOs (Mobile Network Operators) are left with very few differentiators to offer their clients, besides price and coverage; with the latter becoming more and more uniform across all of the players in most developed markets. This has led to a search for other distinctive advantages – like first-class support to justify premium prices, or new services to add to the traditional telecom portfolio in order to gain an additional role – integrated service providers for B2B customers.
However counterintuitively, adding software products to MNO portfolios does not lead to the financial gain expected for the amount of effort having been put in – with significant strain being put on internal resources to launch and support the products. This might seem like an illogical situation – after all – we as operators have compatible experience; we're used to running things in the cloud, dealing with a lot of customers, and arguably, we know a thing or two about technology. Why do we fail to provide even a basic B2B productivity tool, for example, a CRM to our customers without incurring frustration, organizational strain, and losses?
MNOs are running into invisible walls
The answer is quite simple – we're used to operating in a completely different market – an oligopoly (where there are only a few competitors), and selling an easily-understood product from a buyer's perspective. While on the other hand, most SaaS products are far more complex from a customer's standpoint, and the B2B sales and setup process often requires significantly more time and effort per client. Not to mention the fact that the project teams typically have very little experience with it. Market size also presents a challenge – while MNOs are used to functioning in a market with few competitors, in the SaaS market they come up against hundreds of competitors vying for the same client, some of which are venture-funded and therefore must less EBITDA margin-conscious than established businesses – they're playing the same game but with a different set of rules.
So – are SaaS offerings a dead-end strategy for MNOs? Not necessarily. The same roadblocks also provide a clear image of what types of offerings would be a much better fit for operators’ product portfolio and their bottom line: products that are easy for customers to understand and use, where MNOs are able to provide added value. As a result – a CRM or cloud storage solution does not fit the description.
Possible MNO solutions for SaaS selling success
What, then, are those operator-specific SaaS services they should be going for?
Some operators have had tremendous success with B2B call routing and management systems, IoT flow management, and identity services. What they have in common is that all of those products are fairly improved by specific operator know-how, and therefore provide the perfect match for their product portfolio. The lesson here is clear - stick to what you're good and to products where you have a clear added value or market advantage.