Three drivers for communications providers

Hilton: Telecommunications changes mean opportunities for providers, partners and SMEs

After 18 months of global economic meltdown, it is critical for businesses to match costs to benefits and do only the most pressing technology projects. I expect 2010 will be about shoring up the ramparts for small enterprises, offering increased sales opportunities for the telecommunications service provider, vendor or partner.

Businesses have spent the last 18 months retrenching and are still inclined to be introspective. With limited growth opportunities, owners move to protect existing revenue streams. Safety, security and risk reduction typify organisational decision-making today. As a high school physics teacher once told me: "I don’t like taking risks. I’m wearing a belt and braces."

We are going to see the birth of business continuity and disaster recovery (BCDR) for small-size enterprises, but do not expect to see SMEs putting out requests for proposal around BCDR. Instead, proprietors may ask channel partners for ways in which to reduce business risk through, for example, physical surveillance, data storage, unified threat management (UTM), VPN connectivity and early-stage mobile data security.

Safety and security-related technology are like insurance policies: they protect SMEs from disasters in the worst of times and are transparent when not needed.

I’ve written numerous times over the past 18 months about technology offerings that are designed to reduce overall costs. SMEs must only replace older technologies if the newer ones cut overall costs at no expense to functionality. Switching solutions makes SMEs apprehensive, so the payback period must be less than six months, the up-front implementation expense needs to be comparatively negligible and the learning curve gentle.

I believe mobile broadband USB sticks, Mi-Fi (mobile broadband), hosted email or messaging, mobile workforce solutions for fleet management, invoicing and time/expense management, and unlicensed mobile access (UMA) over mobile phones may fit the bill.

SMEs frequently do not realise how much they are paying for business inefficiency.

I recently wrote about the high costs of travelling employees using Wi-Fi in cafés, hotels and airports. Switching to mobile broadband USB sticks can save SMEs thousands of pounds a year.

There has been competition in fixed-line voice offerings from telecommunications operators for years and mobile services are also fiercely competitive. This has sparked innovative offerings for SMEs and pricing flexibility.

European cable TV operators are pushing new broadband, trunking and more fixed voice offerings to SMEs. These offerings will force pricing responses and renew emphasis on customer service for SMEs. We also expect that cable TV operators will eventually push into managed and hosted services, with a strong line-up of security, business continuity and productivity packages. Many will be powered by the likes of Cisco, Microsoft or IBM.

Cable TV operators such as ntl:Telewest Business in the UK, Numericable in France, Ono in Spain, Telenet in Belgium, UPC in Austria and the Netherlands, and Zon in Portugal have existing commercial SME offerings.

From these operators, we expect more bundled communications solutions with IT services and applications. All this bodes well for SME customers, the beneficiaries of competitive prices and renewed customer focus, while these communications powerhouses fight it out.

Steve Hilton is principal analyst at Analysys Mason