The Bear & The Hare – Disruption and Adoption Within Telecommunications 

A key finding from the Moorhouse Barometer on Change is that organisations should experiment and execute at speed (fail fast, learn quick). The ability to adapt the business model and flex the operating model to accommodate new value propositions and consumer demands is fundamental.

This is no truer than in the era of 5G and Fibre within the Telco and Media industries, where agility is becoming increasingly more important. Firms which adapt and embrace disruption, the Hares, reap the rewards. Firms which are slow to adapt to change, and are resistant to disruption, the Bears, miss out on opportunities and risk being left behind in a rapidly changing technical and customer landscape.  

5G – The Platform for Wider Industry Disruption and Transformation

The UK, one of the most competitive telecoms markets in the world, is in the midst of a digital revolution. A critical enabler to this has been the presence of high-speed data connections which will be enhanced by 5G connectivity and Fibre access. They will provide the platforms for wider industry disruption spanning the Internet of Things (IoT), mobile media consumption, autonomous vehicles, wide-spread automation and facilitating the Digital Revolution.

The rise of digitisation and generations of digital natives has made consumers increasingly tech savvy. These customers will switch to those networks and providers which offer faster, more reliable and secure offerings through fibre-to-the-premise (FTTP) and 5G. Companies need to be agile and fast in accessing investment money to take advantage of the opportunities afforded by innovations such as 5G and fibre connectivity. However, these investments will facilitate significant demand and in the long run minimise service delivery costs and improve time and quality of new products and services to the market.

We are seeing many of the big players in this sector such as Vodafone, O2 and ‘3’, embarking on ambitious transformation programmes seeking to increase agility across their organisations, respond to disruption faster, increase productivity and automate processes whilst also becoming more customer focussed in their business models and processes. These organisations are the Hares, recognising that they must pivot, become nimble, respond to change faster to radically transform their customer experience and create a step change in capability to deliver at pace. The Bears will be slower to react and will be left behind both technologically by their competitors, and crucially, by their customers. A recent study by EY1 showed that one in four customers were willing to switch broadband providers that year where trust and cost were seen to be significant drivers.  

Emerging Fibre Developers in a High Growth and Highly Competitive Environment

Over 5 million UK households are within Multi-Dwelling Units (MDUs) including high-rise, low-rise and converted properties. This corresponds to c.21% of UK housing stock. 

The UK MDU market is rapidly growing in city regions and reflect different needs and demands. Fibre network providers who delay in creating a clear and executable MDU fibre strategy risk losing first mover advantage in a highly competitive market where there are several full fibre network developers in the UK.

While building new network infrastructure is complex, requiring significant capital investment and long-term commitment, organisations need to be agile and executing at speed in order to realise the significant business potential. There are a number of players in this market that can be considered Hares such as Hyperoptic and City Fibre, rapidly targeting MDUs and being nimble in their approach. The Bears risk losing out on key partnerships and momentum gained in the industry. 

Adapt to Change and Rise to Disruption to Reap the Rewards

The retail industry is full of graves where previously successful firms failed to adapt and rise to change while the winners, those which rose to the challenge, took the prize. There are similarities in the trends we see across both mobile and fixed line providers. Firms that adapt and rise to disruption first, the Hares, reap the rewards. Firms that are slow to adapt to change, and are resistant to disruption, the Bears, miss out on opportunities and risk being left behind in a rapidly changing technological and customer landscape. Putting it into context, the current climate favours the agility and speed of Hares, (who can rapidly adapt to take advantage of new infrastructure like 5G and fibre. Meanwhile, the reluctant Bears (established TSPs and ISPs) face being left behind if they do not keep up with the pace of change.

Moorhouse works with all of the major Telco and Media operators in the UK. We will be hosting our TMT Barometer on Change seminar on Thursday 21st March where we will discuss two key themes observed within the sector in detail. 


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