• The details are still unclear, but the Malaysian government’s announcement on dual 5G networks is a positive move that can accelerate 5G developments in the country.
• Telcos should start collaborating and get more involved in the second 5G network for greater control of the infrastructure.
The Malaysian Communications and Digital Ministry recently announced that 5G rollout in the country will move to the second phase, in which Malaysia will have a dual network model upon reaching a population coverage of 80% of the first network. Having dual wholesale networks is still far from ideal compared to separate deployments by the telcos. However, it is a very positive move from the single wholesale network (SWN – for more on SWN, please see “Malaysia 5G Through SPV: One Step Forward and Two Steps Back,” March 8, 2021) as it will provide wider options for telcos/service providers and enable them to differentiate. It can also drive 5G development and accelerate innovations in creating new applications and use cases. All major local telcos (e.g., CelcomDigi, Maxis, and Telekom Malaysia) have already voiced their support for the dual networks while the largest player, CelcomDigi, has announced it will withdraw its equity participation with Digital Nasional Berhad (DNB – i.e., the current SWN provider).
• The telecom wholesale segment is behind the AI implementation curve, and companies need to do more by embracing innovation – i.e., exploiting opportunities for generative AI.
• Success for telecom wholesalers will entail developing an underlying AI strategy across the portfolio and company in a connected manner.
Telecom Wholesale Trends in 2023 GlobalData’s discussions over the last year with global leading telecom wholesale providers highlights a commonality in strategy among telecom providers selling wholesale connectivity, both in terms of strategic vision and in the products and services they offer. Where companies differ is influenced by the nature of the core networks that support products and services, global geographical reach, and strength of product/service brand (e.g., antifraud solutions, mobile roaming), and lastly partnerships.
• Since customer databases are available for mass business markets alongside providers’ existing major enterprise knowledge, service providers have traditionally segmented target markets by number of employees.
• Service providers are realizing they need to be more sophisticated and are trying to identify factors like digital maturity and proportion of knowledge workers.
More often than not, enterprise telecoms service providers segment the market in terms of employee numbers. Typically, they divide the market into SOHO/micro (0-5 employees: owner-managers don’t count as employees), SME/SMB (from 6-250 employees), and corporate/enterprise (250+ employees). Of course, these definitions vary from one service provider to the next, and often, specialist markets such as the MNC segment and public sector are addressed outside of the employee count model. The main drivers behind this are: (1) ‘this is how we’ve always done it,’ (2) ‘we can get databases of the target market by employee numbers,’ (3) and ‘any other approach is too difficult.’
• Europe’s rumor mill is running at high capacity, but it’s becoming ever clearer that – despite the EU – in telecoms, the region remains a series of national markets.
• Activist investors, workforce reductions, fast-changing technology, hyper-competition, multiple layers of regulation, socio-economic changes, and the digitization of everything have got C-suite heads spinning.
Unsubstantiated reports in the press of BT seeking to replace its CEO, Philip Jansen, are typical of a market that is not entirely sure where it is going. Activist investors, cross-shareholdings, and in-country consolidation are confusing enough for the telco C-suite. Add to that, the complications of national and EU regulation, growing ESG requirements, employee ‘rightsizing,’ broad socio-economic and workplace changes, rapidly evolving technologies, the key role of digitization across all aspects of home and work life, plus the need to invest in both infrastructure and systems – it is no wonder that heads are spinning.
• For China, brokering political stability in the Middle East means investment opportunities. It is working at both in tandem as an overture to its long-term strategic interests in the region.
• Policy and government diktat will not compensate for the fragmented approach by Western governments and tech companies when challenging the likes of Huawei in eastern markets.
After a seven-year stand-off that involved the Saudi and Iranian Embassies gathering dust in each other’s countries, Riyadh (Saudi Arabia) announced a rapprochement with Tehran (Iran) under the auspices of Beijing (China) on March 10, 2023. This was a surprise announcement made by representatives from the two countries attending a summit in China with analysts across all sectors pouring over what it means. Technology is one sector that is worthy of analysis comment to determine the wider implications for the international technology market.
• Infrastructure-focused Giganet has launched a wholesale connectivity offering targeting the SOHO market for its reseller, managed service provider, and ISP partners.
• This re-emphasizes both the importance of the SOHO and SME markets as a key target as well as of the fragmentation of the supply/value chain.
Small and medium-sized enterprises (SMEs) and small office/home office (SOHO) businesses are becoming the telecoms target markets of preference across many countries at the moment. Given the background of deglobalization and trade wars, combined with many individuals choosing to pursue their own path or work on side businesses as a result of the pandemic as well as associated experience of working from home for white-collar workers (or laid-off blue-collar workers), smaller business is where much of global growth is being delivered, presenting an opportunity for many companies across all verticals, including the telecoms sector.
• Mergers and acquisitions (M&A) in cybersecurity continues to cause uncertainty in the investment community, but latest Q4 2022 projections show investments have picked up.
• Success for investors will entail investing in the right cybersecurity technology segments and ensuring investors back companies that are visionaries and have strong customer alignment.
Cybersecurity Revenues Remain High, but Investment Reservations Exist GlobalData’s deals database highlights that in value, cybersecurity deal activity decreased previously by 98% in Q3 2022 compared to the Q3 2021 total of $7.7 billion. Similarly, deal volume also remained flat in Q3 2022, compared to Q3 2021, and was even lower by 33% in the same quarter in 2021. These trends indicate that although revenues among cybersecurity companies remain positive, there are still investment reservations in cybersecurity due to the unsettling economic climate and a possibility that cybersecurity stocks could follow in a similar fashion to tech stocks.
• Cisco is launching the hybrid work collection in response to the migration of workers back to offices.
• The collection is well-positioned, but its contents are for the most part commonplace.
While the ‘Cisco Live 2023’ event was underway, Cisco quietly launched a hybrid work collection. The collection consists of design guides for renovating office workspaces, documentation for IT managers to deploy work from office solutions, and a three-piece hybrid work offer set consisting of a software offer (made up of collaboration, security, digital experience monitoring, and mobile device management all under a single agreement), a work-from-home offer (featuring three device ensembles plus networking expertise), and a work-from-office offer (assistance in building in-office workspaces that are both optimized for hybrid work as well as sustainable).
CityFibre, the champion of altnets in the UK, is reported to soon axe 20% of its workforce due to the UK’s “struggling” economy.
An obsession with end user needs rather than financing and technology is needed to encourage customers to migrate from their current broadband solutions.
Most folks waking up in the morning may think ‘I need more fiber’ – but that is usually a dietary consideration rather than anything bandwidth-related.
With reports that CityFibre, traditionally the darling of UK altnet market, is set to cut up to 400 jobs from its workforce of 2,300 (but will add 200 more, giving a net job loss of about 200), questions need to be asked and answered.
• Etisalat by e& is making moves to share its expertise with telcos across the world that may not be able to afford next-gen B2B services.
• Etisalat by e& will look to increase its B2B credentials through a network of partners beyond its operational footprint without having to go through complex M&As.
UAE telecoms incumbent Etisalat by e& (e&) has launched its new business program called ‘e& Partner Networks.’ The move is an attempt by the operator, which is sitting on large piles of cash reserves, to increase its influence on the global stage as a credible B2B partner.
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