SHORT
CUT
HOW TO GO PLATFORM
Everything-as-a-service solutions to future-proof the telco business model
Platform business models have gained significant attention in numerous industries due to their light asset base and high value combined with their ability to monetize multiple sides of the market .
Internet hyperscalers have leveraged their advances in new technologies and delivery models to create new revenue streams by entering new markets and reinventing their business models . For telcos to capture a significant share of economic value , a platform business model provides a sustainable solution . The way telcos approach the platform challenge will define their competitiveness .
Watch out for hyperscalers
For telcos , it is a key strategic decision to not only rely and build on their core network competencies , but to also go beyond and diversify their revenue streams by developing new growth opportunities . 1 Everything-as-a-service solutions ( e . g ., IaaS , SaaS , PaaS ) are expected to see strong growth with a total revenue CAGR of 18 % within the next four years through 2026 and provide a viable solution for diversification . 2 This is mostly driven by declining core revenues ( i . e ., SIMs and lines ) as there has been a shift of economic value toward hyperscalers from only 17 % to 61 % revenue share from 2010 to 2020 , also impacted by the last two digitalization waves for telcos . 3
The pandemic has intensified the move by hyperscalers to use digital platform services to position themselves permanently in the telco industry by offering cloud-based solutions for communication , entertainment , and collaboration . Telcos can participate in the sustainable
Source : GSMA
#
BUILDING
TOMORROW
HYPERSCALERS INCREASINGLY TAKING OVER POTENTIAL TELCO REVENUES
83 %
2010
17 %
≈11 %
Total revenue CAGR
39 %
Top 10 global internet companies by revenue Top 25 global operators by revenue
2020
61 %
development of new revenue streams and win back market share by turning to a platform business model that enables them to leverage their extensive customer base and access multiple industries .
Building the XaaS platform
Three key options exist for telcos to move to a platform model . Each depends on their willingness to take ownership as well as on their capacities and competencies to build and manage platforms :
THREE KEY OPTIONS FOR XAAS PLATFORM IMPLEMENTATION
OPTIONS COMPLEXITY RESOURCE INTENSITY 1 TIME TO OPERATION EXT . DEPENDENCY
BUILD
BRING
BUY
1 ) Resources such as financial investments , human capital , etc . Source : goetzpartners
BASED ON TELCO CAPABILITIES
High / long Low / short
01 BUILD The platform is developed entirely inhouse , with only some collaboration partners for implementation purposes . The telco stays on top of the decisionmaking process , which allows for faster innovation execution while data sovereignty is ensured . This makes the telco solely responsible for all operational and strategic aspects – from attracting customers to system operations – resulting in high resource binding and increased internal error potential .
02 BRING The platform is built jointly with partners through alliances or a dedicated joint venture . To have the best of both worlds , telcos can engage direct or indirect competitors ( e . g ., covering distant geographic areas ) with complementary skills and strengths to share investments of capital and human resources . This distinct setup brings and combines
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