Small and medium-sized enterprises (SMEs) have started outsourcing communications services to IT companies, potentially depriving telecomms operators of a major business opportunity, according to a new report.
While traditionally an unexciting source of revenue for telcos, SMEs now present a growing opportunity for suppliers, thanks to the ongoing convergence of IT and telecomms, according to a report by UK consultancy Analysys.
Companies such as Cisco, Microsoft and IBM have been quick to target the SME market, using product integration and marketing skills that are far more advanced than those of telcos, the report says.
To avoid losing out to IT companies, telcos must design products and services targeted at SMEs, says the report, instead of trying to repackage existing offerings designed for the large corporate or residential market.
"I'm not saying that IT companies are moving into telecomm operators' space - but they've managed to expand their expertise," said Susan Ablett, senior consultant at Analysys and the report's author.
"Telecomm operators may find themselves becoming the distribution arm for IT companies. They will have lost their strategic initiative in the SME marketplace. That's the real threat," said Ablett.
Some telecomms operators are already fighting back. Telecom Eireann, Ireland's incumbent operator, is focusing on SMEs. It is providing high quality customer service using lower cost methods than used with large corporates, such as providing customer support via the Web, a technique used by IT suppliers like Cisco and Microsoft.
Customers can expect to see telecomm operators trying a lot harder to understand what their business problems are, said Ablett. Already, BT has started explaining the business advantages of its ISDN services, rather than the technical facts, she said.
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