Telecoms companies can drive enterprise market growth with smaller business customers, says GlobalData

The recent financial results from telecoms service providers have been mixed, but there is a common trend towards growth in the small & medium-sized enterprise (SME) and small office home office (SOHO) markets, says GlobalData. The leading data and analytics company notes that the COVID-19 pandemic, the conflict in Ukraine, the associated rising cost of living, and the global climate crisis are driving people and businesses to refocus on more self-chosen issues as they pursue new paths.

Robert Pritchard, Senior Analyst for Enterprise Technology and Services at GlobalData, said: “Historically, telecoms service providers have been focused on leadership on the global stage and with domestic corporations, but recent trends underline that much of the growth opportunity now lies with smaller enterprises. This is not to say that there are not opportunities with national enterprises, public sector organizations, and multinational corporations (MNCs), just that the broader market direction has shifted.”

Leading global service providers like AT&T, BT, Orange, and Verizon reported reductions in traditional large business fixed revenues of up to 8% year-on-year, offset to an extent by growth in value-added offerings such as security, IT/integration, and managed/professional services which, in some cases, are delivering double-digit growth.

Pritchard continues: “Smaller businesses represent a fantastic opportunity. They tend to be less price-sensitive and more loyal customers as their strategic focus is on growth, customer satisfaction, and recruitment of talent. Essentially, if the technology works, they can crack on with their day-to-day priorities.”

With literally millions of existing small businesses worldwide and more being created every day—including both high-growth start-ups and ‘steady as they go’ businesses—the market potential is huge. Informed segmentation and an acceptance of a level of risk is essential, as is an optimized go-to-market/channel strategy.

Pritchard concludes: “Technology per se tends to be a lower priority for bosses of smaller enterprises than business outcomes, although it is still at the heart of their operations and delivery. Telecoms service providers are recognizing this opportunity and are getting smarter when it comes to delivery, which is underlined by growing revenues and profits from the small business market.”