Telecom Competition Predicted to Cause Trouble for U.S. Carriers

An increase in U.S. telecom competition may cause a struggle for current carriers, analysts at Ovum said.

The U.S. telecom industry consists of numerous alternatives to incumbent carriers due to its growth and investments. This will drive better services for enterprises, but carriers should review their market strategies, revamp traditional segmentation, and create new integrated service offers to ease the pressure from the increase in competition, Ovum said.

This market’s recent consolidation and reorganization, along with the limited focus of some of the incumbents, has created an opportunity for challengers to pick off enterprise services business.

In a new report, the global analysts review five of the current challengers in the US wireline enterprise market and provide recommendations for both incumbents and enterprise customers.

The advantage for U.S. challengers is that they can provide the sort of unique offerings and differentiated services that are often missing from the established carriers portfolios,” said Mike Sapien, principal analyst at Ovum. These challengers are in such a position that they do not need to offer the full range of enterprise services or serve all enterprise segments. The U.S. market is large enough to support many alternative providers.”

Current carriers focus on revenues, regional location, number of employees, and existing service segmentation is too broad, Ovum said. Win-back programs are no longer sufficient, and analysts recommend preventative action through business intelligence, reviewing segmentation, and new channel tactics.

Using analytics and market research to predict and model customer behavior will help anticipate what services and tactics should be used to manage and maintain close customer relationships across all segments,” Sapien added.

Internet boom and bust leads to concerns with choosing more risky challengers over incumbents. To ensure that a service provider is a good fit for the individual enterprise, Ovum recommends gathering like-customer” references, examining geographic service coverage, and reviewing the terms of service failures.

Most customers do not focus on the terms of service failure or repeated outages until things go wrong,” Sapien said. “After failures or repeated outages occur is not the best time to consider penalties, outage credits, or moving back to your previous provider.”

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