Research Notes

The development of the telco industry will result in demands on management and employees continuing to escalate

A job in this industry is becoming increasingly like playing musical chairs!

It is no secret that the telco industry is developing at a tremendous pace. But very few outside the industry actually understand the consequences this is having on the telco industry directors, management and even the employees on the floor in this enormous industry that has an annual turnover of 2500 billion USD.

If you take a closer look at how most telcos are developing around the world, it is very obvious that competition on most markets is so tough that the requirements for having an efficient and lean organisation are increasing daily. In practice this means that an increasingly smaller number of employees are trying to produce an increasingly larger amount of telco traffic, that is often generating increasingly smaller revenue.

Outsiders that read about this industry in the press often see stories about constant employee reductions and directors that get replaced when their companies are under pressure or in trouble. It does seem a little like an industry that is constantly playing musical chairs – and when the music stops once every quarter, there are less chairs to sit on for those who have been nervously dancing around them.

In our 2012 predictions – Strand Consult has examined the challenges that the telco industry is facing this coming year. We can see that the demands being placed on top management and employees in telco companies around the world are continuing to grow in 2012, further escalating from the already tough demands from previous years.

In our opinion the most important qualities you need to have – apart from all the usual requirements – if you want to be part of the telco industry are these:

1. You need to be able to separate what the press is writing about the telco markets, and which telco products and services customers are actually purchasing and using. There is far too much hype in the telco industry.

2. It is important to understand that the next large growth market is not waiting just around the corner. Mobile penetration is high, competition on the broadband market is tough and prices are generally decreasing. The telco industries in most countries are experiencing decreasing revenue.

3. The ability to reduce costs is vital. There are still many areas where it is possible to save money and there are still a great many possibilities where the telco industry can cut costs if they are willing to create and launch new strategies in this area.

4. The need to share infrastructure across multiple operators is becoming an increasingly common way of reducing costs. However sharing infrastructure also results in operators reducing employees. On the other hand, hard-working and innovative employees will most certainly have a job tomorrow – others might one day find that there is no chair to sit on when the music stops.

5. Scale is becoming increasingly important in the telco industry. As telco products become commoditised, volume and large-scale operation is becoming increasingly vital for any market player hoping for success in the telco industry. Business people who understand this and that can help reach these goals will find that there will continue to be a chair and an office for them in the future mobile industry.

Quite simply it is safe to say that the telco industry is in many ways an extreme industry that is moving forward unbelievably fast. On the other hand the challenges that other industries are currently facing are not very different from the challenges the telco industry is facing. The biggest difference is simply that the telco industry is placing far greater demands on their employees, due to the far greater requirements for earnings in the mobile industry.

2012 will be unusually tough even compared to previous years. It is most likely that in 12 months, the mobile industry will probably have the same turnover of 2500 billion USD, but customers will be receiving more traffic and services for their money and that traffic will be created by even less employees.

Next time you play musical chairs for fun with your friends or family, take a moment to think about all the employees in the telco industry that are playing this game every day and hoping that they will still have a chair next time after seeing a colleague land on the floor.

If you would like to learn more about our predictions on how the telco market will develop in 2012 please click here: 2012 predictions .  At the same time you are welcome to take a look at our predictions from the previous 11 years. As you will see, most of our predictions were spot-on.
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