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WAN, LAN Service Providers, Wholesale Roll with COVID-19 Changes

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Change

… people were able to to pull this through.”

Moving to Cloud

Enterprises are shifting to the cloud and refocusing on the need for cloud communications, Whelan said. Their transformation necessitates moving to the cloud.

“So I think there’s an opportunity there to work more closely with enterprises to help them to engineer that transition,” she said. “In the first six months or so of the pandemic, everybody was just kind of scrambling to put everything in order to keep things going, to keep businesses going. And now we’re moving into the next phase, which is ‘OK, let’s sit down, look at our services, look at our partners and let’s figure out what makes the most sense for us going forward. What do we need to do to sustain and grow the business?’ And then we see sort of a third phase starting in the second half of next year of maybe some of these really big projects that were previously put on hold kind of coming to pass. So I think it’s an opportunity for providers to work more closely with their enterprise customers, and then to look ahead and to plan ahead.”

Competitive Landscape

In terms of competitive landscape, lots of spinoffs and divestitures are happening on the wholesale side, Whelan said. Companies are restructuring and that may including pushing off their assets and trying to optimize their focus on core areas.

“We’re seeing that certainly from a wholesale perspective, obviously in voice,” she said. “Wholesale voice is a declining market. It’s been declining for a number of years. And we’ve been advocating that it probably makes a lot of sense for a couple of very large providers to kind of take on the bulk of the voice and for other smaller providers to sort of outsource that. So from a voice perspective, that’s something that I think we’re probably going to see a little more of.”

In terms of M&A, a lot of that activity has been on hold from an enterprise perspective due to the pandemic, Whelan said. That could start picking up in the second half of next year.

“Providers’ revenues have been declining slightly, obviously due to COVID-19,” she said. “Maybe that might open up some opportunity for some additional changes as providers try to kind of retrench and figure out what their long-term strategy is going to be.”

The Importance of Network

COVID-19 has emphasized the importance of the network, Whelan said. Also, focusing more on customers has never been more crucial.

“I really think this is the time for service providers to really step up and step in with their enterprise customers to work more closely with them, to plan what they want to do and to also make it easier to do business,” she said. “I know we hear about this all the time, the ease of doing business in the customer experience. But I really, truly think that it’s becoming more and more important to make it simple for an enterprise to get information or to make a simple change to the network, or to have access to tools and information.”

Ease of doing business is now a competitive advantage, Whelan said.

In the meantime, companies are retrenching and positioning for the future, she said.

“I think that in the second half of 2021 we’re going to see enterprises take on some of these larger projects,” Whelan said. “I think we’ll see some movement in terms of services and in terms of these projects moving ahead. So that will increase some of your services and your consulting work, as well as your service revenues. We’re hoping that will start to go toward … some level of a new normal. It won’t be what it was a year ago, but it’s going to be somewhere in between. I’m being cautious or maybe cautiously optimistic. Maybe things will rebound more quickly than we initially think.”

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