Telecommunications

More revenue for Less Sales and Marketing Cost

Telecom Services

One of the largest telecommunications companies was concerned that expenses for sales and marketing were rising faster than revenues, and that its cost structure might be higher than that of its principal competitors. After detailed benchmarking our client’s costs versus its competitors’, and a careful analysis of where his organization was spending its money, we identified opportunities for nearly $100 M annual cost savings through restructuring the marketing and sales functions responsible for over $20 B in revenues. These savings were achieved at the same time as revenue growth accelerated.

Improved Customer Care

Telecom Services

A major telecommunications carrier was concerned its customer care organization had grown so large and complex that it was no longer manageable. Our analysis focused on dramatically improving service quality as seen by customers and decreasing operating costs through reduced cycle times and more efficient business processes. In addition we identified opportunities to recover many hundreds of millions of dollars in working capital through faster service provisioning (permitting earlier billing) and dramatically improved credit and collections processes.

Faster, Cheaper Billing Processes

Telecom Service Company

A major telecommunications carrier was experiencing many delays and interruptions to its billing processes. Billing seemed to be in a constant state of crisis, requiring Herculean staff efforts and several tens of millions in excess costs. Bills were often incorrect permitting customers to withhold payment, often for months while disputes were settled. In some cases, bills were several weeks late affecting cash flow quite severely. We conducted a thorough review of billing with a cross-functional team and identified seven areas for improvement, including investments in software upgrades and testing and introducing a process-driven organizational model with uniform, shared process metrics. The company anticipates that these changes will shorten processing cycles by 30-50% and lower unit billing costs by approximately 10%.

Reducing Care, Provisioning and other operations costs

Telecom Company

A large US-based telecom carrier was under pressure to reduce costs as the market prices for its services went into free-fall. We examined its customer care, provisioning and related operations functions, which in aggregate represented over $1.5 B in annual costs and over 15,000 staff. In conducting a series of internal and external benchmarking analyses we identified which products and customer segments were causing disproportionate costs. We then identified specific areas that were overstaffed relative to the needs of the business, which enabled our client to target staff reductions intelligently instead of applying an across-the-board staff cut.

Market Expansion Strategy

Networking Products

A major networking company decided to systematically address the government market for products and services after having made a tentative entry from its base in the private sector. Its problem was that this market's customers had needs that differed significantly from those of its traditional private-sector clients. In addition, this market was controlled by a different set of VARs and system integrators from those that had led our client to success in the private sector. We helped the client determine what value propositions would appeal best to these new customers and channel partners and then formulate a set of strategies to maximize market penetration.

Improving Product Portfolio and Value Communications

Service Division of a Communications Products Company

One of the largest telecommunications technology vendors asked us to review the appropriateness of its portfolio of support services surrounding its core products for its largest customers. After detailed analyses of the drivers of customer value, purchase behavior, account profitability, and discounting policies, we recommended a series of changes to (1) product positioning, (2) sales approaches and customer value communications (3) relative pricing of different services, (4) realignment of products to match them with how customers want to buy them, and (5) reformulation of several offerings to better meet customer needs. Through these changes our client expects to increase revenues and profits by several hundred million dollars per annum.

Increasing Added Value

Wireless Telecom

A major European cellular carrier wanted to add value to its basic communications service to differentiate it from the competition. Based on a carefully structured program of market research and analysis of related markets, we helped the company assemble a portfolio of information services for its most important customer segments. These services all revolved around the needs of the traveler away from home, and included such elements as wireless e-mail, hotel and restaurant reservations, automobile services and health care referrals. The client is now assembling the relevant set of partners to support a robust service portfolio.

Understand Merger Economics

Hedge fund

Our client, a mid-sized hedge fund focused on the technology industries, has had us do several analyses of the economics of various mergers in the telecom equipment and services sectors. In two cases, we identified significant potential synergies that the merging companies had not announced, so as to have hidden reserves to offset potential future market weakness. In two other cases, our analyses showed that the merging companies had over-hyped the benefits of their mergers. The former companies produced several years of better-than-expected earnings and shareholder value growth, while the shares of the latter two companies have fallen sharply in value as a result of repeatedly missed earnings projections.

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