English
Arabic
Français
Español
Português
Deutsch
Türkçe
Dutch
Italiano
Russian
Romaian
Portuguese (Brazil)
Originally Published on: SpendEdge |Why it’s So Hard for Telecom Companies to get the Procurement Strategy Right?
Exploring the Dynamic Landscape of the Global Telecom Market
The present valuation of the global telecom market is a remarkable $1,900 billion, poised for nearly twofold growth by the end of the decade. This surge is attributed to widespread adoption across diverse sectors, spanning e-commerce, retail, film, print, radio, television, IT, healthcare, transportation, and distribution. The advent of 5G, hailed as a transformative mobile communications standard, holds the promise of unlocking novel revenue streams in both the B2B and B2C sectors. However, the journey to realize the full potential of 5G is riddled with challenges, with high deployment costs standing out as one among several obstacles impeding its progress.
#TelecomProcurementJourney
The Imperative for Telecoms: Revitalizing Legacy Infrastructure
A substantial impediment to the digitization of the telecom system lies in the extensive reliance on legacy systems. Proactively embracing modernization could result in a significant reduction in service costs, potentially ranging from 30% to 50%. Legacy assets, characterized by inefficiency, sluggishness, and susceptibility to cyber intrusions, demand urgent modernization. Bridging technical gaps and revitalizing dated assets should emerge as top priorities in the telecom procurement strategy, aiming not just at cost reduction but also bolstering cybersecurity and delivering value-added services.
Navigating the Challenges of 5G Rollout
Despite 5G outpacing 4G in speed by a factor of 10, its adoption rate in the North American market hovers just above 30% as of April 2023. The 5G deployment encounters hurdles such as high costs associated with spectrum licensing, regulatory deployment fees, and physical hardware. The scarcity of skilled resources, particularly in the developing world, adds another layer of complexity. A robust telecom procurement strategy becomes indispensable for businesses to navigate these challenges, emphasizing long-term gains beyond short-term obstacles.
Challenges on the Globalized Supply Side
The globalized supply chain exposes the telecom sector to supply shocks, necessitating proactive measures to mitigate risks and enhance overall supply-side performance. Escalating costs in network hardware from OEMs, coupled with supply delays, adversely impact both revenue and network performance for telecom operators. Forward-thinking enterprises are exploring alternative approaches, including the reuse of existing telecom equipment and network topology redesign to reduce dependence on manufacturer equipment.
SpendEdge's Role in Enhancing Competitiveness
Making Cost Structures Competitive: SpendEdge's telecom procurement strategy and cost-benefit analysis experts enable companies to maintain a sharp focus on supply chain costs. This ensures the development of superior negotiation strategies with suppliers, allowing clients to remain cost-competitive in the dynamic market.
Improving Supply Chain Performance: Real-time monitoring of supply chain data is crucial for anticipating and mitigating supply-side failures. SpendEdge provides deep and accurate information on sourcing, including regular feeds, updates, market intelligence reports, and best practices, empowering decision-makers with timely insights.
Crafting Procurement Strategy with Compliance in Mind: Collaborating with businesses, SpendEdge develops custom supplier strategies, with a focus on suppliers demonstrating performance measures beyond cost and fulfillment efficiency. Emphasis is placed on ensuring suppliers maintain an impeccable track record on environmental, social, and governance (ESG) fronts, aligning with stakeholder expectations.
Success Story: Transforming a Telco's Procurement Strategy
Our client, a prominent player in the telecom industry with an annual revenue exceeding $2 billion, grappled with rising inflation impacting margins. Leveraging SpendEdge's expertise in telecom procurement strategy, the client initiated a comprehensive cost-benefit analysis, gaining a profound understanding of cost structures and negotiating leverage. This approach streamlined supply chain costs and empowered the client in supplier negotiations, ensuring a competitive supply of network hardware and components.
In conclusion, addressing the procurement challenges in the telecom sector demands a holistic strategy. This includes the imperative of modernizing legacy infrastructure, navigating the complexities of 5G rollout, and overcoming supply-side hurdles. With a trusted partner like SpendEdge, telecom companies can navigate these challenges, emerging stronger in the dynamic market landscape.
