Forging a new path for Europeancommunications service providers
By Montgomery Hong, Tom Loozen and Peter van Herrewegen
is the managing directorfor Accenture Communications.
is the managing director forAccenture Communications in Europe, theMiddle East, Africa and Latin America.
Peter Van Herrewegen
is the managingdirector for management consulting,strategy and transformation in AccentureCommunications, Media & Technology inthe Netherlands.For more information, please email@example.com.The
Outlook Point of View
seriesoffers insights about leading trendsand innovations across all industries.http://www.accenture.com/OutlookDavid Cudaback, Editor-in-Chief Craig Mindrum, Managing EditorJacqueline H. Kessler, Senior Editor
“If the news is so good, then why do I feel sobad?” Executives of European communicationsservice providers might be forgiven foruttering such a sentiment, in light of theirfinancial performance over the past few years.Consumers are spending more than ever ontechnology and communications services, inspite of a soft economy. And future businessopportunities seem bright in an age of convergence, as the movement of data andrich applications across networks increasinglycharacterizes how people live and how workgets done.But key performance measures for thetelecommunications industry are lagging.Metrics such as shareholder performance,revenue growth and positioning for futuregrowth point to a much more fundamental andsustained value erosion in the communicationsindustry. If allowed to continue, such erosionwill make these companies much less attractiveto investors over time and could threaten thevery existence of some industry players.A new strategic direction is urgently needed.Communications service providers have to domuch more than take small strategic steps—such as increasing revenue per user or makingincremental gains in some market share.A key strategy for providers is to increasethe breadth of their digital offerings andcapabilities, becoming an “integrated digitalservices provider,” or an IDSP—the supplier of choice for all things digital for consumers aswell as for small and medium-sized businesses.By becoming such a company, providers couldoffer a full range of digital services while alsobeing the platform by which those services aredelivered.
How bad is it?
How dire is the economic outlook forcommunications service providers if they remainon their current path? As illustrated in the charton the next page, the European communicationsindustry lags most industries on both currentperformance and future positioning, asmeasured by eight key performance indicators.This is especially true of companies servingmainly mature markets. Our analysis shows thatthe few providers with a significant presence inboth mature and emerging markets outperformtheir peers on both current performance andfuture positioning.
Point of View
August 2013, No. 1