Although consumer telecommunications operators can function under a variety of market conditions, broadly speaking their business strategies are similar. They may tweak certain aspects or exert a different emphasis (dependent on their own strengths and weaknesses as well as the opportunities and threats of their local market), but ultimately their high-level consumer strategy will usually be centered on three core elements:
building a best-in-class IP network
delivering an optimized consumer experience
expanding their digital services portfolios through strategic investments and, increasingly, partnership
These three core strategies are not mutually exclusive, and indeed all three are required to work together in order to protect the core consumer communications business, as well as find new growth opportunities. For many telcos, revenues from mobile data and fixed broadband can now equal 40–50% of total consumer revenues. Delivering a great customer experience via such services is therefore essential to survival, but it also strengthens the overall brand and, together with innovation, paves the way for new services to be launched to their customers. Partnerships then bring added credibility in fields outside of the telco's core strengths, as well as quicker time to market and lower investment risks.
Two companies that have made recent announcements in areas of customer experience and partnership are Telefonica and Vodafone. At the Mobile World Congress last week, Telefonica launched the first release of Aura, its artificial intelligence digital assistant that the company hopes will transform the way its customers interact with Telefonica and manage their digital lives. Via Aura, Telefonica customers will be able to control and personalize their services and home devices as well as take control of their personal data. Due to partnerships with OTT players such as Google, Facebook, and Microsoft, customers will be able to interact with Aura directly and through third-party channels such as Facebook Messenger. Remaining relevant to consumers will be critical for operators with ambitions beyond providing basic access, and Ovum will watch Telefonica's new venture with great interest.
Vodafone has already been successful in expanding into new areas in a number of its markets, and in November it entered the consumer IoT space with the launch of V by Vodafone. Last week, Vodafone extended this with the announcement of a partnership with Samsung around smart home, launching the V-Home by Vodafone suite of products (initially in Germany and Spain) in 2Q18. Such a partnership not only brings the strength of the Samsung brand, but also provides an established smart home ecosystem that Vodafone can quickly utilize. However, as many other telcos will testify, selling smart home to consumers is not easy, and Vodafone will still need to develop, and execute, a sound go-to-market strategy if it is to be successful in this space. Developing the right go-to-market strategy is essential for all smart home players, not just telcos, and thus remains a key theme for Ovum's smart home research in 2018.
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