Digital transformation and omnichannel in the telecommunication sector
The ongoing rapid technical development has completely changed the telecommunication sector within a few years and is still changing it. New products or business models are formed, which also affect the sales strategy and make alternative distribution models possible.
1. Your core business is telecommunications. The industry is going through major changes. Can you explain how the business is changing?
The market, dominated for years by a few major high-volume telecommunications providers, is much more fragmented today as new competitors enter the market. The business models of the major providers, who mainly focused on the sale of tariffs, devices, SIM cards and accessories, have since then been adapted by numerous other providers, for example from the retail sector. In addition, they start to combine their offers with attractive content. As with the streaming services in the competition, the Internet tariff is then arbitrary and only a means to an end. In order to be able to keep up with this, the telecommunications providers also rely on content. In addition, they are currently exploring new partnership models with start-ups and focusing on IoT applications in the automotive sector or smart devices in other industries. This changes the service model for Arvato as well. In addition to different hardware variants, new digital service formats and sales channels are added. As an example, the eSIM can be mentioned.
2. Good cue. What opportunities are created by eSIM for the stakeholders?
The eSIM – or embedded SIM – as an integral part of the board will replace the connectivity standards of today in the next ten to fifteen years. So far, they are mainly used in the connected car and in small numbers in wearables. For the consumer, this means that the conventional contractual relationship is repealed, he has more freedom of choice and can act much more flexible in the future. For the telecommunications industry, this means that with the increasing usage of the eSIM in smartphones, the volume of today with approximately 135 million SIM cards in Germany will gradually decrease. With the decrease in physical logistics however, there are certainly new business models around the digital distribution of eSIMs, for example when enabling new services that the eSIM makes possible.
Arvato has already managed a similar development in the high-tech and entertainment segment, as the physical distribution of computer operating systems on CDs has been replaced by downloads and digital commerce has found its way into the industry.
3. What does this mean for the sales strategy?
Currently, sales through the local shops are in the foreground. With the increasing digital service offering and the growing variety of products, new sales channels are also gaining in importance. Digital distribution will increase. Furthermore, I believe that there will no longer be the one point of sale but several that will, in a certain sense, merge as digital and analogue products will more often be bought separately from each other in the future. The intelligent networking of the channels also plays an important role in order to understand the customer and his behavior and to use this knowledge to optimize the profitability of the processes.
4. How does Arvato support companies in their digital transformation?
I see Arvato in the role of digital change agent. Arvato is experienced in transformation. In addition, they have expertise in a wide range of industries. This know-how can be transferred and thus make a profitable contribution to new business models and solutions for their customers. To give you a concrete example, Arvato has been working for the automotive industry for many decades and is also implementing projects in the area of connectivity in vehicles. This is very interesting for telecommunication-clients who are exploring partnership models with the automotive industry. This opens up new possibilities. In the current situation, I definitely recommend looking beyond the industry's borders and exchanging views.