Executive summary
A comprehensive product profitability and simplification exercise is critical for telecom companies responding to today’s market environment. With their business model currently rendered unsustainable by increasing competition and rising network costs, companies first need to analyze in depth their range of service offerings. The resulting product rationalization can then enable the restructuring of market-facing and back-end operations and infrastructure, in turn laying the foundations for significantly improved profitability
Conclusion
Telecom companies are at a crossroads. They need to restructure their business model if they are to have any prospect of sustained growth in the face of intense pressure on profitability and rising capital expenditure. The instinct to cut costs first turns out not to be the correct approach. Instead, before anything else, they need to examine and restructure their product portfolios.
Once they have devoted more attention to profitable products, improved the less profitable ones, and eliminated those that make a loss, then they can take a truly informed look at their costs. They can rationalize market-facing and back-end operations and infrastructure projects in a manner that will allow them to establish clear priorities, optimize costs sustainably, and reorganize for the next wave of growth.
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