Cellcos must un-telco themselves to chase $5.3b utilities opportunity

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The utility segment is forecasted to present a $5.3 billion opportunity by 2022, but to cash in on that, mobile operators must start thinking like an ‘un-telco’ now instead of waiting around for the promise of 5G, says ABI Research.

ABI defines an “un-telco” (not to be confused with T-Mobile US’s “un-carrier” marketing gimmick) as an MSP that pursues activities, strategies, and opportunities beyond their traditional connectivity business.

According to ABI, MSPs are at a turning point – to stay competitive they must use un-telco strategies to capture new revenues and opportunities. And the utilities market is ripe for disruption and opportunity, says Pablo Tomasi, senior analyst at ABI Research.

“The energy utility market is in the midst of major digitization with new technologies, players, and market opportunities that are disrupting the traditional status quo. MSPs must act now and target adjacent areas from the smart home to off-grid energy generation” said Tomasi. “MSPs must use their network expertise to help utilities manage and connect their dispersed networks; they must deliver solutions that support utilities’ digitization efforts in smart workforce and security; and they must partner with utilities to create synergies in new growth areas such as the smart city. MSPs connectivity can be an entry point but cannot be the end goal. Otherwise, they could miss out on the expansion of related opportunities as happened with the explosion of over-the-top (OTT) services.”

Encouragingly, some MSPs are beginning to understand the need to innovate and implement un-telco strategies and are moving beyond their traditional connectivity limits, Tomasi adds.

“For instance, Orange delivers off-grid energy solutions across several of its African markets, creating a new customer channel, building an ecosystem, and expanding the use of its mobile money offering,” he said. “Turkcell provides another example as the MSP eyes the energy retail market to strengthen its position in the highly potential smart home market.”

In the smart home, MSPs can bundle their energy offerings along with other traditional or digital services, increasing customers’ ARPU and loyalty.

With competition in the digitization game increasing, MSPs need un-telco business models now, not when 5G will be widely deployed, Tomasi said. If MSPs wait for 5G, they will be too late to lead the digitization of the markets as other players will already be established. MSPs should use whatever technology is available to them today and understand what internal processes are needed to implement an un-telco business model.

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