A mobile operator in a West Asian market was approaching the third year of a multi-year corporate strategy when it realized the market was developing more rapidly than it had originally anticipated.
A mobile operator in a West Asian market was approaching the third year of a multi-year corporate strategy when it realized the market was developing more rapidly than it had originally anticipated. The introduction and anticipated uptake of smartphones had proceeded much faster than anyone had expected. This accelerated the abandonment of traditional voice and messaging services as users gravitated towards over-the-top (OTT) services and applications that offered a more compelling user experience; many of these OTT services charged customer far less (and sometimes nothing) to call and message than did the operator.
Moreover, the local digital ecosystem was flourishing, with the operator playing no role other than a “dumb pipe” in the value chain. The media was educating people on its potential and local start-ups and global OTT leaders were flooding the market with new services and related apps. As in so many other markets around the world, customers were migrating to apps to do nearly everything, such as read the news, check email, order food, consume video, buy and sell items, and so forth. It all represented massive revenue potential for those with the right online presence.
To make matters worse, the main telco competitor was riding the wave. By repositioning itself as a “digital brand”, it was threatening to cut into the mobile operator’s brand leadership, with eventual risks to its market share.
While the mobile operator held a dominant position on the market, it could see that its user base and revenue streams were under threat. The heart of the issue stemmed from the inevitable nature of over-the-top (OTT) services.
The operator needed to identify how and where OTT services threatened its core business of voice calling and messaging; then it needed to examine the possible strategic options for defending those lines of business and for mitigating the impact of user migration.
The operator also needed to use its dominant positon on the market to take the lead in the digital ecosystem and move beyond a dump-pipe role. It needed to work OTT services into its portfolio and revenue streams. A strategy to meet the challenge of the competition, which was deploying a “younger and hipper” image to attract users, was a high priority. It needed to assess its readiness for a digital transformation.
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