Customer 360 Enables Successful Business Transformation in the Consolidating Communications Industry

Over the last two decades, communications services providers (CSPs) have faced a two-fold cash flow squeeze. 

First, accelerated adoption of competing OTT (Over-The-Top) service offerings – such as voice calls and messaging through WhatsApp – have put downward pressure on consumer revenue. 

Second, increasing spends on generational technology advancements every few years – like 4G to 5G network upgrades and fibre rollouts to address increased data consumption demands – have put upward pressure on costs.

So it’s logical for CSPs to seek alternative strategies to maintain healthy margin levels and retain market foothold. Mergers and acquisitions (M&As) are a powerful strategy CSPs use to achieve this.

How M&As are reshaping the APAC communications market

APAC markets are a diverse mix of prepaid and postpaid, characterised by a blended mobile ARPU (Average Revenue Per User) – as low as USD $3 in Indonesia and India, and up to USD $30 in Australia. 

At the same time, the prepaid heavy markets have an extremely cost savvy subscriber base that churns easily from one provider to next. Consumers are lured by lower costs or value-added incentives such as free data roaming packages or unlimited local calls.

And most countries have high teledensities – as high as 145% in Singapore, 124.8% in Australia, and 113.9% in New Zealand – that leave limited headroom for net new customer acquisition.

These unique market dynamics have powered a surge in M&A activity that has reshaped the marketplace and created new market leaders throughout the region. 

True Corporation and Total Access Communication (dTac) in Thailand, for example, created a new company with an enterprise value exceeding USD $20 billion. 

That’s only one of several examples. Celcom and Digi in Malaysia formed the largest mobile services provider in the country. Indosat and Hutchinson in Indonesia created the country’s second largest service provider with more than 100 million subscribers. And the Telkomsel and IndiHome merger in Indonesia resulted in expected annualised savings of USD $330 million. 

In Australia, the merger between Vodafone Hutchison and TPG Telecom created an enterprise value of USD $4.9 billion for Vodafone. And in neighbouring New Zealand, 2degrees and Vocus joined forces to form the country’s third largest service provider with an annual turnover of more than USD $1 billion. 

The same can be seen in India. When Vodafone India and Idea Cellular merged a few years ago, the combined entity emerged as the market leader with nearly 400 million subscribers. 

M&As have enabled each of these players to establish a 50% or above market share in their markets of operation.  

Increasing customer stickiness and wallet share with M&As

In addition to an increase in market share, M&A activities typically enable CSPs to increase customer stickiness where subscribers use a mix of volatile prepaid services (such as mobile data) from one provider, and highly retentive postpaid services (like fibre broadband) from another. 

Tapping in on each party’s offerings generates cross-sell opportunities CSPs use to increase customer wallet share and retention.

On the spend side of the equation, M&A activities tend to free up capital by reducing or eliminating spend on overlapping infrastructure. 

CSPs can then choose to use such capital to develop and market innovative products in the information and communities technology (ICT) space (such enterprise apps, IoT, and data centres), or develop partnerships with other industry service providers (like digital banks and micro insurance companies).

The critical need for an integrated customer view

Achieving a successful M&A in the communications industry presents several challenges. For CSPs with legacy systems, realising the business benefits of an M&A requires the rationalisation and integration of business strategies, customer facing and internal functions, product offerings, business processes, and IT stacks. 

However, delivering high-quality customer service over the course of the rationalisation period – and beyond – is key to retaining customers across the merging companies. In scenarios where a customer is consuming products from both merging companies, having an integrated view of the customer becomes crucial to achieving this goal. 

Gavin Barfield, VP Solutions and CTO ASEAN at Salesforce, makes the point that M&As provide an opportunity to retire legacy technology and embrace modern technology stacks.

Solving the integration puzzle with a 360-degree customer view

Developing this integrated 360-degree customer view requires systems integration and normalisation of data across product offerings, sales transactions, inflight orders, customer’s assets, trouble ticket histories, and more.

Salesforce Customer 360 provides an integrated view of each customer, across multiple functions, products and systems. This view is what communications companies’ marketing, sales, contact centre and field  service teams require for day-to-day operations, and to maintain business-as-usual – or better. 

For example, marketing teams enabled with deep customer insights from Customer 360, can review customer segments, customer spend and preferences to develop attractive cross-sell and up-sell offers for the new acquired customer base. 

Sales and customer service teams can also review customer sentiment to inform meaningful conversations with customers from the merging organisations, and address customer concerns with the right insights at hand. 

Singtel in Singapore is one CSP that’s using such data insights to understand and prioritise its customers’ needs in a complex, hyper-connected and fast-changing world.

Rationalising business processes with a connected CRM

Integrated CRM platforms also enable the rationalisation of business processes during M&A activity. When CRM platforms are served over a connected user interface, it enables seamless handovers across internal functions.

For example, when a sales representative requests pricing approvals for mobility and connectivity products, their manager uses the same connected interface to review and approve the pricing. Solution specialists use the same interface to review the overall solution construct for consistency and coherency. Sales Ops uses the same view to review quote accuracy, and can derive weekly forecast reports using a single data instance.

Such simplification allows identification of redundant or unnecessary business processes that are candidates for transformation during the rationalisation process.

Leveraging AI technologies to enable sales and service teams

Gavin Barfield is seeing more communications companies increasingly motivated to embrace generative artificial intelligence (AI) to lead innovation and stay ahead.

That’s largely because AI technologies provide relevant and contextual information – during the sales stages and customer service engagement – that enables sales and service teams to meet their customers where they are. Customer 360 uses Salesforce Einstein AI technologies to  leverage the full power of this kind of data analytics.

Let’s take an example of a high-value subscriber who uses different prepaid SIM cards for voice and mobile gaming from two merging CSPs. AI could potentially suggest an up-sell to a 5G plan with more voice minutes and gigabytes for this subscriber, and the latest bluetooth earphones to enhance the subscriber’s gaming experience. 

Additionally, based on customer demographics and preferences across similar customers, AI could suggest an Instagram and WhatsApp add-on for a few extra dollars. Such examples not only generate increased wallet share, but also project the CSP as an intelligent organisation that understands and wows its customer throughout the customer lifecycle. 

From business transformation, process harmonisation and operational streamlining to increasing customer delight and wallet share, CRM platforms help CSPs across all stages of the M&A journey, and ensure long-term business success.