IBM Global Business Services
Executive Report
IBM Institute for Business Value
What being global really means
Why global integration is crucial for international
communications service providers
Telecommunications
IBM’s unique capabilities for the telecommunications industry
IBM has more than 22,000 subject matter experts working in the Telecommunications
industry, delivering solutions to more than 200 major communications service providers
across the globe. IBM’s telecommunications capabilities are backed by an extensive
global network of telecom solution labs, research areas and innovation centers to
support its offerings in the area of analytics, cloud, mobility, network optimization,
digital transformation and global integration. IBM continues to invest significantly
in key acquisitions to add expertise and capabilities that enable its clients in the
telecommunications space.
Introduction
By Bob Fox, Nick Gurney and Rob van den Dam
Seeking growth and long-term competitive advantage, many
communications service providers have aggressively expanded their global reach. Now,
as the hyper growth phase in mobile draws to an end and competition intensifies, many
of these global players are experiencing decreases in revenue and profit growth. Despite
their worldwide presence, they have been unable to achieve a meaningful financial
advantage over their single-market peers. How can these CSPs better exploit their
global breadth? We suggest they focus on improving their global integration to drive
the synergies necessary for cost savings and innovative growth.
27
56
70
33
%
%
%
%
Only about one quarter of the global
CSP executives interviewed believe
that their organization is successful
in realizing economies of scale.
More than half of global CSPs do not
believe their current approach toward
global integration will succeed.
Global CSP executives agree that IT
systems and infrastructure represent
a key focus area for leveraging
synergies.
Only one third of the interviewees
indicate they capture synergies in
IT systems and infrastructure.
Over the past 10 to 15 years, many communications service providers
(CSPs) developed operations outside their home countries, taking
advantage of the growing mobile market. By branching out internationally, they enjoyed phenomenal growth.
For example, VimpelCom now serves approximately 220 million
subscribers in 17 markets, while a decade ago it only operated in its home
country of Russia with 5 million subscribers.1 Telenor, which has about 3
million subscribers in its home country of Norway, has a global presence
in 12 countries and 148 million subscribers worldwide as of December
2013.2 This number will likely grow as the company has plans to expand
operations in Myanmar.3 These CSPs, like many of their peers, took
advantage of extremely rapid growth in new markets during a time of
relatively low competition.
Global expansion delivered growth to company shareholders in terms of
market capitalization, revenue and global share/customers served.4
However, such a strategy is less attractive today. The mobile market is
close to saturated, making it difficult to find new subscribers. As of 2010,
more than 90 percent of people worldwide were covered by a mobile
phone signal, and by 2013, nearly half of the world’s population owned at
least one mobile phone.5
2
What being global really means
Competition has become fierce as CSPs fight to maintain
current customers and lure churners from other providers
through improved services and innovative offers. CSPs also
face competition from over-the-top (OTT) providers (such as
Google, Tencent, Skype and Facebook) attacking core service
revenues and driving up CSP network costs. In fact, the
London-based market research firm Ovum predicted a scant 2
percent annual growth rate in telecommunications service
provider revenues between 2012 and 2018, in part due to OTT
competition and consumer demands for unlimited usage.6
The global CSPs are also facing operational complexities that
come with growth and international expansion. This creates a
situation in which their portfolio of holdings can become a
hindrance rather than a benefit. For example, those with a
large Western European footprint are confronted with
decreased revenue and profit growth, which will likely continue
to wane.7 In fact, our research shows the average growth rate
for the largest global CSPs has been on a general downward
trend over the past ten years.8 It appears the hyper growth
phase in mobile communications is largely over.
According to our research, both global CSPs and single-market
CSPs have experienced declines in earnings before interest,
taxes, depreciation and amortization (EBITDA) during the
2002 through 2012 timeframe.9 Though the decline in
EBITDA margin in this period was lower for global CSPs than
for single-market CSPs, the EBITDA margin gap between the
two groups has narrowed. From a market appreciation point of
view, global CSPs no longer trade at a meaningful premium
compared to their peers.10 This raises the question of what
strategies and tactics global CSPs should adopt to improve
their performance and restore shareholder trust.
We believe the answer can be found through true globalization. Most of the international CSPs operate as multinational
enterprises, which conduct business in numerous countries,
understand local customer requirements and cultivate local
talent. However, such enterprises often suffer from redundancy and duplication of functions within their various
countries. A globally integrated enterprise (GIE), on the
other hand, gains business benefits from economies of scale
and drives synergies for cost savings and innovative growth
(see sidebar: What is a globally integrated enterprise?).
What is a globally integrated enterprise?
A new type of enterprise is emerging – one best understood as
“global” rather than “multinational.” An organization that is truly
globally integrated is a highly adaptable business – tightly integrated across both its operations and the global economy – that
can sense and respond quickly to changes anywhere, anytime.
A globally integrated company shapes its strategy, management
and operations in a truly global way. It locates operations and
functions anywhere in the world based on the right costs, skills
and business environment. It integrates those operations horizontally and globally. World economies are becoming increasingly
interconnected, and when everything is connected, work moves.
It flows to the places where it will be done best – that is, most
efficiently and with the highest quality.
A globally integrated enterprise has:
•
•
•
•
•
Rationalized support functions to enable economies of scale
An optimized global footprint
Strong governance, driving continuous improvement
Expanded consolidation approaches
Embedded intelligence into operations.
A globally integrated enterprise can:
•
•
•
•
Leverage value chains globally
Respond quickly to changing markets
Continuously transform to deliver productivity gains
Apply greater focus on strategic initiatives.
IBM Global Business Services
The reality is that CSPs are not nearly as globally integrated as
they might be. If this is indeed the case, where are global CSPs
in their progression toward becoming globally integrated
enterprises, and what barriers do they face? What should they
do to overcome the barriers and accelerate the benefits
associated with a GIE structure?
3
According to our research, CSPs have made great progress in
achieving economies of scale in the areas of procurement,
network and branding. The research also highlighted areas for
further improvement relating to front- and back-end integration. In particular, CSPs should concentrate on five areas:
• Standardizing and consolidating IT platforms
To answer these questions, we analyzed the current state of
global CSPs, both from a financial and operations perspective.
We performed research on 15 of the largest global CSPs,
conducting financial analyses on the companies, as well as
interviews with both group and operating company (opco)
executives (see sidebar: About the research). We discovered that
global CSPs are in a nascent stage in terms of leveraging
economies of scale to gain superior margins over their singlemarket peers. The good news is that there are many opportunities to leverage global capabilities for further competitive
advantage.
• Simplifying and streamlining processes and operations
• Improving shared services capabilities
• Focusing on enterprise-wide digital front office
transformation
• Globally coordinating product/service strategies.
About the research
IBM conducted both primary and secondary research, focusing
on what we determined to be 15 of the largest global CSPs. Our
goal was to discover how well these companies have progressed
toward becoming globally integrated enterprises. We focused on
CSPs with operating companies (opcos) in at least ten countries
and annual revenues of at least US$5 billion.
We did an in-depth analysis of the 15 organizations’ financial histories and current state. We used company financial statements,
as well as merger and acquisition strategy information and history. We also conducted interviews with 49 executives from 13 of
the 15 organizations – in person when possible and over the
phone or electronically when face-to-face interviews were not
feasible. Almost all the executives were C-Suite level, and we included executives from both the group and opco levels of the
organizations (see Figures).
9%
16%
14%
16%
12%
Grouplevel
Opco-level
executives executives
41%
59%
12%
21%
CEO
CFO
CSO/Strategy director
CIO/CTO
Other C-level
Senior vice president/
vice president
Business unit head
4
What being global really means
An era of growth
Another example, Orange, is focused in particular on the
Middle East and Africa as part of its international strategy to
stimulate growth via emerging markets, as illustrated by its
operations in more than 20 Middle East and Africa countries as
of 2013.13 One of its latest acquisitions was Congolese operator
Congo Chine.14
The study assessed the 15 largest global CSPs and focused on
the 2002 through 2012 timeframe during their period of
aggressive expansion outside their home markets through
investments in licenses, acquisitions and joint ventures (see
Figure 1).
And since its inception in 2000, América Móvil – originally a
spin off of Telmex’s mobile activities in Mexico – has grown by
expanding into dynamic and recovering Latin American
markets.15 Now operating in 18 countries, it is moving into
Europe though acquisitions of large stakes in Telekom Austria
and KPN.16
Just one of many examples of a CSP moving beyond its home
market is Telefónica, which invested heavily in Latin America,
buying stakes in incumbent players and taking over BellSouth’s
Latin America assets.11 Telefónica has also aggressively
expanded its footprint across Europe, with its acquisition of
U.K.-based O2 PLC’s assets in the United Kingdom, Germany
and Ireland (which it recently sold to Hutchison Whampoa’s
3); purchase of a mobile license in Slovakia; and intention to
increase its stake in Telecom Italia.12
Operating countries of 15 largest global CSPs
2002 and 2012
35
32
30
25
1
17
6
Orange
6
22
Telefónica
VimpelCom
1
24
21
Vodafone
8
6
21
18
Bharti Airtel
17
20
18
SingTel
14
América Móvil
1
TeliaSonera
6
Etisalat
5
12
8
Tele2 AB
Saudi Telecom
Company (STC)
0
1
11
10
Axiata Group Berhad
5
10
Telenor
10
17
15
Deutsche Telekom
15
18
21
MTN
20
# operating countries 2002
# operating countries 2012
Sources: IBM Institute for Business Value analysis of publicly available financial reports (2002 - 2012/2013) of top 15 global CSP providers. 2013.
Notes: Numbers do not include countries in which CSPs operate with associated companies or in joint ventures or partnerships.
Figure 1: Fifteen leading CSPs have heavily invested in licenses, acquisitions and joint ventures to expand their businesses across multiple countries.
IBM Global Business Services
By expanding their businesses across multiple countries, these
global CSPs have become less dependent on their home
markets, some to more degrees than others. For example,
Vodafone’s home market revenue in 2012 represented only 12
percent of its total revenue, while Orange’s represented
approximately half.21
In expanding their international footprints, the top CSPs have
followed various paths. There is no apparent single “strategy
for success,” as entry modes, target geographies, financing
strategies and marketing strategies differ. Some CSPs have
embraced an acquisition-based strategy, targeting a specific
region or regions. Airtel, for instance, used an acquisition
strategy that strongly focused on Asia and Africa, as demonstrated by its acquisition of Zain’s Africa operations in 2010
and the 2013 acquisition of Warid Uganda.17 By comparison,
SingTel has – to a large extent – expanded through minority
investments, including a significant stake in Airtel.18
From 2002 to 2012, the global strategies employed by these
large CSPs did indeed deliver growth in terms of customers
served. In fact, the number of customers grew six fold, from
approximately 500 million to more than 3 billion, which is
almost half the total global market subscriptions base.22
However, revenue and profit growth lagged in comparison,
growing less than two fold over the same timeframe (see
Figure 2). This is primarily a reflection of the push into
emerging markets, where the average revenue per subscriber
tends to be lower.23
Others have employed both acquisitions and license purchases
or used a combination of acquisitions, joint ventures and
license purchases to expand into their targeted areas of the
world. MTN, for instance, expanded under its strong MTN
brand in Africa and the Middle East through both acquisitions
of brown field operations, particularly in Africa, and by
purchasing licenses outside Africa.19 TeliaSonera has used a
multi-brand strategy in expanding in Europe and East Asia,
combining acquisitions and license purchasing with joint
ventures, such as with MegaFon and Turkcell.20
Revenue and profit in US$ billions
2002 and 2012
Customers served
2002 and 2012
3.4 billion
Total # subs of 15 CSPs
3 billion
400
2 billion
487
500
300
Totals
of 15 CSPs
1.8x
34.7%
33.4%
269
5.8x
200
1.7x
1 billion
518 million
93
100
0
163
0
2002
2012
2002
2012
Total revenue
2002
2012
Total EBITDA
Source: IBM Institute for Business Value analysis of publicly available financial reports (2002 - 2012/2013) of top 15 global CSP providers. 2013.
Figure 2: Global share and number of customers grew at a much higher rate than revenue and profit.
2002
2012
EBITDA margin
5
6
What being global really means
Home-based growth
To determine what, if any, impact global expansion had on the
global CSPs’ success, we compared their performance to that
of the 15 largest CSPs with mobile operations primarily in
their home countries. (This group had approximately the same
ratio of mature and emerging market players as did the
multi-country group.)
We discovered that the single-market players’ subscriber base
also grew approximately six fold between 2002 and 2012, with
the Chinese CSPs being significant contributors to this growth
figure.24 In addition, the single-market CSPs’ revenue and
profit growth lagged behind subscriber growth to almost the
same extent as the global CSPs. We also discovered that for
both groups, the EBITDA margin declined during this
timeframe. And though this decline was less dramatic for
global CSPs – most of them were less susceptible to the rapid
decline in fixed communications – the EBITDA margin gap
between the two groups has significantly narrowed over time.25
Based on these numbers, it appears that, in the long term,
going global has not propelled the global CSPs to the position
they might have anticipated.
This conclusion is supported by financial analyses conducted
by other organizations. For example, Bernstein Research
investigated how both multi-country and single-market CSPs
are valued in the eyes of investors by considering their priceearnings and enterprise value/EBITDA ratios for the years
2008 to 2012. Bernstein’s research, too, concluded that there
was not a significant difference between the two groups – and
that investors do not seem to favor the global players over the
single market ones (see Figure 3).26
Market Value Per Share/EPS
Enterprise Value/EBITDA
14.0
10.0
9.0
12.0
8.0
10.0
7.0
6.0
8.0
5.0
6.0
4.0
3.0
4.0
2.0
2.0
0.0
1.0
2008
2010
2012
Multi-country CSPs
0.0
2008
2010
Single-market CSPs
Source: Bernstein Research: A Global Perspective on Telecoms. February 2013.
Figure 3: Analysis by Bernstein Research finds no significant difference in how multi-country and single-market CSPs are valued by investors.
2012
IBM Global Business Services
In addition, we discovered that although the average revenue
growth of the 15 largest global CSPs generally exceeded that
of single-market CSPs and global GDP prior to 2009, the gaps
have narrowed substantially since 2008.27 In fact, the trend for
CSPs does not look promising; profitability and revenue
growth are declining for the majority of the global players
(see Figure 4).
(31.0%,72.6%)
EBITDA
margin
7
The over-the-top (OTT) complication
In addition to the slowing growth caused by competition and
increasing saturation, the CSPs also face new competitors in
the form of the OTT players. Typically, these players already
operate at a global scale or at a significant scale in their home
markets (e.g., Tencent, Baidu, Alibaba). As an illustration of the
threat, consider that in the first half of 2013, China Mobile’s
messaging revenues declined by more than 5 percent, due to a
huge gain by the OTTs.28 While this paper does not focus on
how to combat the OTTs, there is a clear need to segment the
OTT market and develop appropriate strategies for the global
CSP.
50%
ased
EU b
APAC
based
#1
(47.4%,
50.1%)
#7
MEA based # 3
40%
(46.6%,
42.2%)
30%
EU based # 6
(20.5%,
15.3%)
20%
Revenue growth
0%
10%
Key:
MEA = Middle East and Africa
APAC = Asia Pacific
EU = Europe
20%
30%
40%
Profitability versus revenue growth
comparison 2007 > 2012 period
“based” = “headquartered”
Sources: IBM Institute for Business Value analysis of publicly available financial reports
(2002 - 2012/13) of top 15 global CSP providers. 2013.
Figure 4: Profitability and revenue growth have declined for the majority
of the largest global players.
The OTT and Internet category players – e.g., Google in
search, Facebook in social media and eBay in on-line auctions
– are true global companies that have undergone phenomenal
growth over the past decade. Figure 5 compares the market
value and revenue of the top 15 OTT/Internet players from
2004 with the top 15 today.29 It is striking that 60 percent of
the current top 15 were not among the top 15 even as recently
as 10 years ago.30 This part of the industry is changing at
lightning speed. During this period, revenue has increased
tenfold and market value by a factor of six. In 2004, revenue of
less than US$100 million and a market valuation of US$1
billion would have gotten you in this “club”. Today the price of
entry is US$500 million and US$20 billion, respectively.31
Moreover, market power is concentrating in these companies.
As of third quarter 2013, the top-five of these companies had
more than US$115 billion cash on their balance sheets, a war
chest for future acquisitions and fuel for growth. Two of these
companies, Google and Facebook, today control 70 percent of
mobile advertising revenue.32 The global CSPs have a chance
to challenge these global behemoths, but only if they free
resources from their existing operations to fund bold new
moves.
8
What being global really means
Rank
Company
1
Apple
2
Google
3
Amazon
4
Facebook
5
Tencent
6
eBay
7
Priceline
8
Baidu
9
Naspers
10
Yahoo!
11
Salesforce
12 Yahoo! Japan
13
Twitter
14
LinkedIn
15
Netflix
Region
USA
USA
USA
USA
CHN
USA
USA
CHN
S. Africa
USA
USA
JPN
USA
USA
USA
2013
2012
market value revenue
(US$ billion) (US$ million)
$491
$169,400
363
57,390
181
66,850
133
6,120
111
8,240
68
15,510
61
5,880
59
4,170
44
5,870
41
4,760
32
3,470
32
4,550
30
534
26
1,240
22
3,940
Total
$1694b
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Company
eBay
Yahoo!
IAC Interactive
Yahoo! Japan
Google
Apple
Amazon.com
Rakuten
Monster
WebMD
Index
Shands
NCSoft
NHN
For-side.com
$358b
Region
USA
USA
USA
JPN
USA
USA
USA
JPN
USA
USA
JPN
CHN
KOR
KOR
JPN
Total
2004
2004
market value revenue
(US$ billion) (US$ million)
$62
$3,271
45
3,575
37
4,186
36
1,101
30
3,189
17
6,921
14
8,279
8
445
3
846
2
134
2
357
2
157
2
280
1
253
1
85
$262b
$33b
Source: Please see Reference section, endnote 29.
Note: 2004 data as of 9/17/2004. 2013 market value as of 12/19/2013. 2012 revenue is TTM. List excludes Alibaba (US$75 billion), whose private market value would put it in the top ten.
List also excludes Skype (bought by Microsoft in 2011 for US$8.5 billion), YouTube (reported as part of Google) and Paypal (reported as part of eBay).
Figure 5: The OTT and Internet category players have undergone phenomenal growth over the past decade.
Toward a new era of integration
To summarize, our financial analyses of the 15 global CSPs
revealed that there is no one “magic” path to worldwide
expansion. The CSPs’ approaches to moving beyond their
home markets differ in entry mode, geographic focus, investment strategies and marketing strategies. In addition, we
discovered that revenue growth via geographic expansion is not
necessarily rewarded; multi-country CSPs don’t trade at a
meaningful premium over single-market focused CSPs.
“With our geographic expansion, we have to
deal with many different kinds of people and
governments, making trust and integrity more
important than ever.”
CEO, Europe-headquartered CSP
Global CSPs have not escaped the industry trends of declining
profitability and revenue growth. These negative profit and
revenue growth trends are creating pressures for CSPs to
better manage costs and reap benefits from economies of scale.
The critical question and call to action for the industry is how
to arrest this decline and flatten or turn the curve back to
margin growth. If this is not done, the next question is how
long shareholders will accept margin drops before they pull
their funds, signaling a massive upheaval in the industry.
IBM Global Business Services
9
Going global
The good news is that CSPs with a global footprint have
numerous opportunities to leverage scale to capture additional
value from their multi-country presence. By becoming more
globally integrated, CSPs increase their ability to transform
and leverage value chains across businesses and geographies
and deliver productivity gains. In addition, greater global
integration enables quicker response to changing markets,
more precision in predicting results and increased focus on
strategic initiatives.
To help determine what impediments global CSPs face in
becoming GIEs, we turned to our executive interview data
to better understand company operations, strategies and
objectives.
When asked about their organizations’ objectives in global
expansion, our executives identified group revenue growth and
long-term competitive advantage as the top-two most
important objectives (see Figure 6). Achieving economies of
scale was not among their top-five objectives, which is
surprising given the cost advantages that can be achieved.
How important do you believe the following objectives are for your organization to expand geographically?
Most important
Group revenue growth by
expanding customer base
86%
Improve long-term
competitive advantage
Increase demand for products/
services by entering new markets
EPS (earnings-per-share, i.e., increase/
restore confidence of shareholders)
Risk reduction/diversification
8%
77%
8%
57%
27%
53%
25%
46%
31%
50%
Economies of scale/cost advantages
Increase brand recognition
Least important
6%
15%
13%
42%
27%
16%
22%
23%
37%
31%
Increase innovation power
33%
34%
33%
Better serve global customers
33%
33%
34%
29%
42%
15%
56%
Improve potential for partnering
Increase product portfolio
29%
29%
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Figure 6: Group revenue growth and long-term competitive advantage were the top objectives for geographic expansion.
10
What being global really means
We asked executives which objectives they felt their organizations were achieving (see Figure 7). Approximately two-thirds
believe their organizations are achieving group revenue
growth, while less than half feel the same way about long-term
competitive advantage. The majority (55 percent) believe their
organizations have been successful in increasing brand recognition. However, only 27 percent feel the same way about
economies of scale, indicating that the global CSPs have
largely been unable to leverage their global scale to achieve
synergies across opcos.
We then sought to determine on which areas the CSPs were
focusing to realize benefits from synergy. Ninety percent of the
executives identified procurement as a top focus area, presumably due to the high potential savings in this area (see Figure
8). The second highest scoring area (82 percent) is network
related (design, components, operation, management) due to
the opportunity for competitive advantage over single-market
CSPs.
8%
To what extent do you believe your organization is achieving these objectives?
Achieved to
significant extent
67%
Group revenue growth by expanding customer base
EPS (earnings-per-share, i.e., increase/restore confidence of shareholders)
28%
36%
38%
22%
31%
23%
22%
50%
55%
Increase brand recognition
22%
35%
46%
27%
18%
33%
40%
Risk reduction/diversification
Economies of scale/cost advantages
16%
45%
Improve long-term competitive advantage
Increase demand for products/services by entering new markets
Hardly
achieved
20%
25%
Increase innovation power
26%
31%
45%
Better serve global customers
25%
33%
42%
Improve potential for partnering
Increase product portfolio
38%
24%
46%
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Note: Some percentages do not equal 100 due to rounding.
Figure 7: Only 27 percent of respondents believe that economies of scale are being realized due to geographic expansion.
37%
31%
22%
IBM Global Business Services
Where is your organization focusing to realize benefits
from synergy?
Procurement
(procurement consolidation)
90%
Network (design, components,
operations, management)
82%
IT systems/infrastructure (homogeneity/
virtualization/consolidation)
70%
Operations (operating efficiency,
alignment of processes)
60%
Branding and
promotion
Shared services
(HR, finance, etc)
Resource (optimized
resource allocation)
Partner
selection
57%
55%
52%
47%
Consolidation
data centers
45%
Product/service offerings (homogeneous
group products and services)
44%
R&D/innovation/knowledge
(centers of excellence)
40%
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Figure 8: To realize benefits from synergy, nine out of ten global CSPs are
focusing on procurement.
Next in line was IT systems/infrastructure (homogeneity/
virtualization/consolidation), with 70 percent. IT represents a
significant cost for CSPs, and it plays a key role in enabling
synergies and operational efficiencies. Additionally, unlocking
new IT efficiencies can reduce expenses and free resources to
fund investments for growth.
11
Sixty percent rated operations (operating efficiency, alignment
of processes) as a top focus area for synergy. Multi-country
CSPs can simplify, standardize and align processes across
business units and geographies, allowing them to be more
integrated. Rounding out the top five areas of focus for
synergies is branding and promotion – or marketing.
To determine how successful the organizations are in these
focus areas, we asked the executives to rate the areas in which
their organizations were actually able to capture synergies. We
found several areas in which a majority achieved synergies and
other areas in which success was quite limited.
Capturing synergies
Procurement – the number-one focus area for synergies – was
also the number-one area in which global CSPs said they
captured synergies, followed by the number-two focus area:
network (see Figure 9). A majority of executives also indicate
they capture synergies with regard to branding and promotion.
Procurement
Consolidating procurement – for IT hardware and software,
network infrastructure, handsets, content, services and more –
typically involves collaboration among the different opcos. The
negotiating power of a larger unified group increases, with the
group leveraging its size in exchange for discounted prices –
i.e., power in numbers. In addition, centralized global procurement supported by local purchasing functions can lead to more
effective decision making. It allows benchmarking and price
coordination across opcos and establishment of a common set
of suppliers for the group, as well as the ability to negotiate
global tenders. Because these costs typically represent such a
large portion (more than 50 percent) of cash flow, savings in
this area can have quite an impact on EBITDA margin
improvement.33
12
What being global really means
Captured synergies to some or significant extent
In which areas has your organizations been able to
capture synergies?
90%
90%
80%
1
82%
70%
70%
60%
50%
6
40%
11
8
30%
10
20%
10%
10%
2
5
4
3
7
9
Indeed, most multi-country CSPs have centralized purchasing
functions that benchmark prices across their subsidiaries,
negotiate global tenders and use price coordination. For
example, Vodafone’s OneSCM, which unifies the supply chain
teams across all of the company’s markets, was created to
procure products and services for a large variety of applications
that help run Vodafone’s business, including equipment for its
networks, corporate services and IT infrastructure.34 Some
global CSPs even collaborate to target procurement efficiencies. For example, Deutsche Telekom AG and Orange formed a
joint venture in 2011 to streamline the procurement of
customer equipment, network equipment, service platforms
and IT infrastructure – a move predicted to save 1.3 billion
Euros annually in three years.35
Networks
20%
30%
40%
50%
60%
70%
80%
90%
Priority focus area
1
Procurement
(procurement consolidation)
7
Resource (optimized
resource allocation)
2
Network (design, components,
operations, management)
8
Partner
selection
3
IT systems/infrastructure
(homogeneity/virtualization/
consolidation)
9
Consolidation
data centers
Operations (operating efficiency,
alignment of processes)
10
4
Product/service offerings
(homogeneous group
products and services)
5
Branding and
promotion
11
R&D/innovation/knowledge
(centers of excellence)
6
Shared services
(HR, finance, etc)
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Figure 9: While many CSPs have successfully captured synergies in
procurement, most struggle to do so in the area of IT.
Global CSPs can create centralized functions that focus on the
design, deployment and operations of networks. Commonality
among networks opens the door to more centralized network
support, operations, sharing and optimization. It also allows for
joint development and roll-out of network solutions and active
network sharing. Most multi-country operators have common
testing functions for handsets, network nodes and specific
services.
A number of global CSPs have consolidated parts of networks
into multi-country centers of testing, operations, service
delivery and assurance. Vodafone, for example, has a regional
network operations center in Romania, which provides services
to the company’s networks in Romania, Italy, Greece,
Germany, Albania, Czech Republic and the Netherlands.36
Other companies decide to outsource networking, such as
Bharti Airtel did when it negotiated a five-year agreement for
Ericsson to manage its mobile phone network in Africa.37
IBM Global Business Services
Branding
Many global CSPs have used a global brand to attract
customers outside their home markets and to build a distinctive and differentiating image while still allowing for the ability
to adapt the global brand to fit a local environment. A prime
example of the power of branding can be found with the
former France Telecom, which officially changed its name to
Orange in 2013. Having used the brand name for marketfacing activities since 2000, the group sought to leverage the
brand’s value and simplify its identity both in France and
internationally.38
Multi-country CSPs are also in a better position to co-brand
and co-market services or devices with other multi-country
players. Achieving “synergy” with regard to branding enables
group-wide brand management, as well as advertising and
sponsorship opportunities that smaller single-market players
find difficult to copy, manage and, sometimes, afford. For
example, Vodafone’s sponsorship of McLaren’s Formula 1
racing team has significantly contributed to its brand recognition; it has more than 90 percent brand recognition in the
markets in which it operates.39 MTN, as another example,
emerged as Africa’s most valuable brand in 2013, partly due to
continued momentum from its affiliation with the 2010 FIFA
World Cup.40
13
leverage synergies. One possible reason for this difficulty could
stem from the discrepancy between how group and opco
executives believe IT systems and infrastructure should be
handled. When asked how they believed various functional
areas should be managed – centrally, by region or locally – the
area for which they had the biggest difference of opinion was
IT (see Figure 10).
Of group executives, 70 percent indicated IT systems/infrastructure should be globally managed, while only 29 percent of
the opco executives agreed. Though global CSPs could
significantly reduce operating costs by consolidating systems
and standardizing platforms, they might encounter resistance
at the opco level based on survey results.
When we asked executives to rate the areas their companies
were considering for outsourcing, we discovered IT infrastructure and network were the most common, followed by application management. We believe IT infrastructure and application
management are likely candidates for outsourcing due to their
complexity and because they are not among CSPs’ core focus
or competency areas. In addition, by outsourcing IT and
networks, CSPs could improve scale, transfer fixed costs to
variable costs, and leverage the outsourcing company’s
expertise.
Limited synergies, limited success
Operations
Figure 9 reveals that most global CSPs struggle to leverage
synergies in the key areas of IT, operations, shared services and
optimization of resource allocation.
Only 41 percent of the interviewees said that they have been
able to improve operational efficiency by simplifying and
aligning processes and operations across the enterprise. This
includes areas such as order-to-cash, fulfillment and billing,
where processes have become progressively more complex. By
doing this, they were able – to a greater or lesser extent – to
reduce operating costs and to enable consistent customer
experiences.
IT systems/infrastructure
Though 70 percent of the interviewees believe that IT systems
and infrastructure are key focus areas to leverage synergies,
only about one third indicate that business benefits were
realized. IT seems to be one of the most difficult areas to
14
What being global really means
Global versus local: How do you believe the functional areas should be managed?
1. Centrally managed 2. Managed by region 3. Locally managed
100%
5%
10%
10%
15%
80%
19%
24%
15%
29%
20%
35%
33%
40%
30%
52%
60%
48%
40%
38%
80%
71%
30%
70%
48%
30%
29%
33%
IT systems/
infrastructure
Supply chain
management
Globally managed
By region
85%
90%
15%
35%
19%
0%
R&D/technology
development
76%
19%
55%
20%
65%
Networks
Locally managed
30%
29%
Branding and
promotion
Opco executive responses
20%
24%
15%
10%
Marketing/sales Marketing/sales
business market consumer market
(no line) Group executive responses
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Note: Some percentages do not equal 100 due to rounding.
Figure 10: There is a clear discrepancy between group and opco executives about how IT systems and infrastructure should be managed.
Shared services
Resource allocation
Less than half (44 percent) of the interviewees stated they have
realized some savings from shared services. Procurement, HR
and accounting were mentioned as the first three focus areas
for shared services. Most of the savings came from reduced
number of full-time employees and lower IT hardware and
software costs.
Less than a third of the interviewees mentioned that they have
been efficient in optimizing resource allocation. This small
percentage were able to better manage and share resources,
allocating the best resources and skills across the enterprise to
provide the most efficient and effective support to the individual opcos.
“Our objective is to distinguish between operations
that can benefit from alignment at a global level
and those that need to keep strong local
specificities.”
Senior Vice President,
Europe-headquartered CSP
IBM Global Business Services
Integration challenges
CSPs understand that becoming a globally integrated enterprise is not easy. The interviewees clearly stated that they are
still in the early stages in becoming truly globally integrated
and that the journey will be difficult. Almost 80 percent believe
they are less than halfway there. More than half don’t believe
their current approach will achieve their goals, while three out
of four don’t believe their current approach will meet the
timeframes set. Almost two-thirds don’t believe they can
complete the journey on their own. The good news is that
56 percent believe they have set the right priorities.
Obviously, there are obstacles to cashing in on potential
synergies from multi-country operations – perhaps as many as
there are opportunities. Adding to the difficulty is the great
variance in what group and opco executives view as key barriers.
For example, the top-two barriers cited by opco executives –
differences in country regulations and objectives misalignment –
were not among the top five cited by group executives (see Figure
11). On the other hand, group executives believe a lack of unity
and insufficient group-level control are the top-two barriers.
What did your organization experience, or do you view, as the major barriers for securing benefits from geographical expansion?
50%
No sense of unity
within the corporation
24%
40%
Insufficient group-level
control of opcos
19%
30%
Realizing group benefits at the
expense of one or more opcos
30%
30%
3
3
19%
25%
Objective misalignment (group objectives
versus opco objectives)
2
38%
3
Lack of knowledge/inadequate skills
to implement change
20%
Differences in country
regulations
20%
Business case (ROI) for synergy
difficult to make
20%
24%
62%
1
24%
15%
Lack of organizational skills
Insufficient budget for synergy programs
2
3
33%
Complexity or immaturity of technology
(no uniformity, lack of standards, etc.)
1
3
10%
Conflicting cultures (cultural/language
differences between opcos)
15
24%
Group execs
0%
14%
Source: IBM Institute for Business Value Telecommunications Global Integration Survey. 2013.
Figure 11: Group and opco executives differ in their opinion of the biggest barrier to securing benefits from expansion.
Opco execs
16
What being global really means
One barrier on which both sets of executives agree is
conflicting cultures. Number three for opco executives, it was
part a three-way tie for third among group executives, along
with realizing group benefits at the expense of opcos and
complexity/immaturity of technology.
The great news is that executives at both levels agree on the
prerequisites to becoming a GIE. They identified strong
leadership, shared vision, and reconciliation of global decisions
and local execution as the top three elements needed to build a
GIE.
Our interviews with the executives were enlightening,
providing insights as to why global CSPs have not achieved
significant advantage over their single-country peers. We found
the global players are not achieving economies of scale in
several key areas. While they have a strong focus on procurement, networks and branding, they are missing opportunities
to leverage synergies in IT, operations, shared services and
optimization of resource allocation. We believe they should
focus on front- and back-office integration to further their
global integration and reap the associated cost savings and
revenue opportunities.
A game plan for integration
A globally integrated enterprise operates with a common set of
processes, shared services and broadly distributed decision
making, carried out by a highly skilled global workforce
managed by a common set of values. It shares services and
assets globally so it can respond to market demands quickly
and efficiently – with global synergy and local effectiveness.
“We have not had the talent or been open enough
internally for the tough conversations and
decisions. We still operate in silos and with a
country-focused mindset.”
CFO, Middle East/
Africa-headquartered CSP
By becoming globally integrated, multi-country CSPs can
position themselves for profit and revenue growth both by
targeting markets more effectively and partnering for scale
without sacrificing profitability. In a GIE, operations are
integrated, with work flowing to where it’s done best. Rather
than a “home country” versus “opco” mindset, a GIE CSP
transforms itself through standardized global processes,
globally optimized assets and integrated operations. In an
industry environment where very significant efficiency and
cost-based reductions are required to return to margin growth
and defeat new OTT competitors, the global CSPs have an
unparalleled opportunity.
Becoming a GIE is by no means a simple task. The transformation requires a clear global vision; a comprehensive operating
model blueprint; and consistent, open communication across
all opcos. Support of a common vision – and its associated
goals and objectives – by all stakeholders at both the group and
opco level is key. Equally important is a framework for
formulating the integrated operations strategy. This starts with
ensuring a shared understanding of the business strategy and
its implications for operations and is followed by a current
state assessment, future state design and roadmap of execution
initiatives. The roadmap should define a clear logical
framework, key target metrics, location of activities, organizational structure, services and mechanisms for managing the
model.
Key to both establishing integration and ensuring operations
run smoothly is a coherent decision-making and management
system to align and integrate related activities across the
organization. Organizational alignment – including alignment
between business and IT – is imperative. Finally, it’s important
to recognize and value the varying cultures inherent across a
global organization.
IBM Global Business Services
Areas for improvement
As previously revealed, virtually all the executives we interviewed believe their organizations have much ground to cover
before becoming a GIE. While global CSPs are already
benefitting from their size and global stature in the areas of
procurement, networks and branding, they have yet to realize
the full breadth of benefits that can be achieved by becoming
globally integrated. In particular, the global CSPs should focus
on improvements in integration of back- and front-office
processes, systems and infrastructure.
Back-end integration: Primarily a cost-driven strategy,
integrating back-end, or back-office, functions allows a CSP to
become more integrated in global infrastructure by:
• Standardizing and consolidating IT-platforms
• Simplifying and streamlining processes and operations
• Improving shared services capabilities.
Front-end integration: A revenue-driven strategy, front-end
integration focuses on understanding and connecting with
customers and enabling rapid response to local conditions. It
requires global sales force alignment, multichannel management, and integrated marketing and product development so
that brand perceptions are uniform and global, yet local
customers’ needs are met. It includes:
• Enterprise–wide digital front office (DFO) transformation
• Globally coordinated product/service strategy.
A major focus for CSPs globally is to transform end-to-end
customer contact, moving to predominantly digital transactions across all contact types. This could enable the massive
efficiency gains required in terms of customer contact, as well
as improve customer experience and advocacy.
17
The higher the integration of both back- and front-end
processes, the more globally integrated a CSP becomes (see
Figure 12). In Figure 12, the lower left quadrant represents
global integration “innocence.” CSPs in this quadrant might
use international sources of capital and labor, but only to a
limited degree. Their processes are optimized at the business
unit or local market level. The upper right quadrant represents
global integration maturity or excellence. These CSPs have
optimized their resources and assets globally and seamlessly
integrated their business processes with global centers of
excellence and standard systems to enable best-in-class
partnerships.
High
Back-end
integration
(Cost-focused)
Global
CSP
Big-play
globally
integrated
CSP
Single-market/
regional
player
Market
(DFO)
leader
Low
Low
Front-end integration
(Revenue-focused)
High
Organizational
enablement
Source: IBM Institute for Business Value Research. 2013.
Figure 12: Globally integrated organizations have highly integrated
back- and front-end processes.
18
What being global really means
Strategies for back-end integration
Standardizing and consolidating IT platforms
Today, the challenge for CSPs is to balance the ever-increasing
need for sophisticated IT with the need to control IT costs. In
the telecommunications industry, IT costs can equal nearly 5
percent of revenues, compared to industries such as manufacturing and utilities, where IT represents just over 2 percent of
revenues.41 For many CSPs, already complex systems –
operating and billing support systems in particular – have been
further complicated through acquisitions and other activities
that resulted in disparate systems and outdated applications.
CSPs can focus on consolidation to achieve common platforms
and standards worldwide. Consolidation functions should
include infrastructure areas (such as data centers, servers and
storage), information security, service desk and the like. These
functions can run as a “utility” for the enterprise, enabling
greater efficiencies, consistency and quality, as well as greater
scale to reduce costs and lower comprehensive risks.
Strategies to consider include:
• Outsourcing IT management and support, as well as other
back-office activities
• Adoption of cloud solutions to enable efficiency gains,
operational flexibility and substantial cost savings.
Simplifying and streamlining processes and operations
Standardized global processes can help reduce operating costs
by achieving economies of scale and also enable consistent
customer experiences. We suggest CSPs rely on the mantra of
radical simplification and consider these principles:
• Simplify from the point of view of the user versus the process
owner.
• Understand the process as currently executed before you try
to simplify it.
• Let specialists handle specialized tasks.
• Eliminate process steps with no value add.
Improving shared services capabilities
Creating globally integrated support functions for services that
are not strategic to local operations (such as HR, finance,
payroll, etc.) enables breakthrough cost savings and can:
• Decrease incompatible or inefficient support functions
• Drive continuous improvement based on a shared GIE
principle
• Reduce duplication of activities
• Facilitate best practice sharing and standardization of
processes
• Reduce spending on support services by deploying the right
skills at the right place at the right cost.
Our analysis suggests that improving shared services capabilities can result in 25 to 33 percent savings without compromising the quality of delivered services.42 With a shared
services solution, a CSP goes beyond simplification and
standardization, requiring the enterprise to rethink its
processes, structure, organization and systems at a fundamental
level. Shared services also “free” resources previously devoted
to non-core activities, allowing them to be redirected to areas
such as leadership and strategy.
Strategies for front-end integration
Enterprise-wide DFO transformation
Alignment of front-office automation (e.g., digital channels,
online store and self care) across the organization enables a
uniform global brand experience, while still allowing for rapid
response to local conditions to meet local customers’ needs.
Achieving this requires:
• Global sales force alignment and multichannel management
• Marketing transformation
• Social business solutions to reach current and new customers
• Mobile commerce transformation to integrate and
transparently manage the needs of customers across multiple
channels
• Collaborative innovation.
IBM Global Business Services
By combining front-office automation with cloud, a CSP could
lower IT, physical store and care costs. An enterprise cloudbased DFO could support customers regardless of their
location, providing the same level of customer service, self care,
shopping options, customer experience, campaigns, etc. Rather
than individual implementation in each country, the basic
implementation would only need to be done once, and
country-specific policies could be added. The CSP could create
a consistent experience for customers, as well create a common
digital interface for partners, suppliers, etc. We have estimated
that such an approach can save up to 40 percent on customer
operations costs while improving channel performance and the
customer experience.43
Globally coordinated product/service strategy
The potential benefits from developing an integrated global
plan to develop and market products and services are substantial. By thinking globally and acting locally, a global CSP can
explore and develop unique features for each country, while
also benefiting from its strength as a global enterprise. For
example, global CSPs can implement best practices internally
in the form of research and product development centers that
bring the best skills of the company together. They can better
serve global travelers within their footprint and can share
experiences across the markets where they operate.
They are also in a better position to collaborate with other
global players by co-branding or co-marketing services and
devices. VimpelCom, for example, has entered into a partnership with WhatsApp to deliver a series of consumer offers in
50%
countries in which it operates.44 Another example is the
partnership between Orange and Facebook to roll out
PartyCall, a conference call service for the general public.45
19
Reaping the benefits of global integration
Companies that can globally leverage their operating models,
footprint and competitive positioning have the potential to
separate themselves with regard to financial performance. Not
only can global integration help achieve cost savings, resource
optimization and capital productivity, it can also help drive
growth and market value, increase cash flow and expand
investment opportunities. We see this play out in other
industries.
For example, a multinational consumer goods company’s stock
price jumped 50 percent after its global integration efforts.
The company moved to global business units, created a global
services organization and aligned its corporate resources with
its business units. In addition to the increased stock value, the
company was also able to decrease its research and development spending by 30 percent over a course of seven years.
A large insurance company also reaped financial and operational benefits from its integration work. The company
identified areas in which synergies could achieve cost
reduction, as well as created single finance, human resources
and marketing functions. The results include an estimated
US$300 million in benefits over the course of 18 months, and a
streamlined, improved process for new product launches.
“Thinking globally and acting locally allows us to
develop the unique service in each country, while
benefiting from the strength of being global at
the same time.”
Chief Strategy Officer,
Europe-headquartered CSP
20
What being global really means
• Goals and objectives, including explicit financial targets, are
Globally integrated bank decreases costs, increases
efficiencies
Communication service providers can look to other industries to
emulate – and learn from – their global integration stories as they
begin to develop their own strategies. Banks provide a great example given their parallels to CSPs, and many banks around the
world are in the midst of or have completed global integration
transformations.
For example, an international bank – one of the largest in the euro
zone – embarked on a global integration journey with goals to facilitate growth and better integrate technology and operations. In
particular, the bank sought to amplify its expansion strategy
through flexible technology and infrastructure that could adapt to
rapid growth.
As it entered new markets, the bank focused heavily on acquisitions, many of which were inefficient banks it could acquire at a
good price. As a result, the organization was saddled with fragmented – and disruptive – operations.
As its first step in becoming a GIE, the bank developed a clear
vision of its growth strategy objectives. Then, with top management support, the bank developed an integration process, which
could be used both to reconcile current processes and as a
guide for future acquisition integrations. The next step was to
design and implement consistent, yet flexible technology.
The resulting model facilitates profitable growth, as well as rapid
integration of new businesses. The new model takes advantage
of economies of scale and employs shared services to avoid
management redundancies while growing the business. It also
allows for flexibility to adapt to different markets. Through this
model, the bank has improved back- and front-office operational
efficiency and greatly improved its cost to income ratio, lowering
it by close to 70 percent.
clearly stated and communicated – and are in alignment with
corporate strategy
• There is executive, business and cultural alignment
• Motivations, constraints and complications are identified and
understood.
2. Scope: What capabilities do we need?
Before implementing an integration blueprint, an organization
must clearly define the:
• Skill sets and expertise required
• Functions that will be included in the transformation
• The starting point for the global integration journey.
3. Baseline: Where are we today?
Establishing a baseline against which to measure progress is
crucial and should include:
• An assessment of the status quo
• The establishment of a point of reference for targets, goals,
progress and success.
4. Roadmap: How will we move forward?
The integration roadmap should:
• Clearly outline the steps and pace required to bring about
change
• Account for adequate employee training and acquisition of
additional skills and talent
• Instill the mechanism for continual transformation
• Establish a system to track progress and success.
5. Governance: Who will be responsible?
Preparing to integrate
Management and governance of the integration journey are
imperative and include:
We suggest global CSPs consider five key questions in their
efforts to become more globally integrated:
• Clearly defined leadership roles and responsibilities
1. Vision: Why are we doing this?
A shared vision is imperative. In embarking on any integration
project, an organization should ensure:
• Continual measurements and incentives
• Ongoing change management to ensure consistent
commitment to the transformation.
IBM Global Business Services
21
Conclusion
About the authors
Over the last 10 to 15 years, a number of CSPs elected to
establish an international presence, extending beyond their
home countries and acquiring new subscribers and revenue
along the way. This strategy – focused on high-value opportunities and growth – served CSPs well for almost a decade.
However, today’s mobile market is virtually saturated, and
CSPs continue to face increased competition from OTT
providers. A deceleration in revenue and profit growth clearly
indicates it’s time for a new approach.
Bob Fox is the Global Industry Leader for the telecommunications and media and entertainment industries for IBM Global
Business Services. Bob has spent 30 years advising telecommunications service providers around the world about business
strategy and how to improve customer-facing operations. He
can be contacted at [email protected].
We suggest CSPs shift their thinking to focus on another
important element of strategy: managing costs and improving
operating efficiency. To reach the full potential of their global
status, they need to evolve from multi-national companies into
globally integrated enterprises. As they continue leveraging
synergies in procurement, networks and branding, they need to
focus on better integrating back- and front-end processes,
systems and infrastructure.
To make this transformation, CSPs must develop and clearly
articulate a global vision and operating model that achieves
economies of scale, expands consolidation and drives continuous improvements. In doing, they become true global entities,
agile and able to respond to this new era of global economics.
Nick Gurney is the Communications Sector Leader for IBM
Global Business Services in growth markets. He has 20 years of
experience working with telecommunications providers around
the world, particularly on transformation initiatives. He can be
contacted at [email protected].
Rob van den Dam is the Telecommunications Leader for
the IBM Institute for Business Value. In this role, he develops
industry outlooks and business value realization studies
for telecommunications. Rob has 20 years of experience
working in telecommunications. He can be contacted at
[email protected].
Contributors
Scott Stainken, General Manager, Telecommunications
Industry, IBM Sales and Distribution
Eric Lesser, Research Director and North American Leader,
IBM Institute for Business Value
IBM Institute for Business Value
IBM Global Business Services, through the IBM Institute for
Business Value, develops fact-based strategic insights for senior
executives around critical public and private sector issues. This
executive report is based on an in-depth study by the Institute’s
research team. It is part of an ongoing commitment by IBM
Global Business Services to provide analysis and viewpoints
that help companies realize business value. You may contact the
authors or send an e-mail to [email protected] for more
information.
Saravanan S, Senior Managing Consultant, Telecommunications Strategy & Change, IBM Global Business Services
Raj Rohit Singh Teer, Strategy and Change Lead Consultant,
Global Delivery, IBM Global Business Services
22
What being global really means
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13 Sandle, Paul. “France Telecom to push further into Africa’s
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14 “France Telecom seals Congo Chine Telecom deal.” IT News
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IBM Global Business Services
15 “América Móvil targets Telmex shares”. http://www.ft.com/intl/
cms/s/0/03209706-f355-11e0-b11b-00144feab49a.
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17 Tripathy, Devidutta and Eman Goma. “Bharti closes $9 billion
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23
21 IBM Institute for Business Value analysis of publicly available
financial reports (2002 to 2012) of top 15 global CSP providers.
2013; Vodafone Annual Report 2013, http://www.vodafone.
com/content/annualreport/annual_report13/downloads/
vodafone_annual_report_2013.pdf; Orange Annual report
2012; http://www.orange.com/en/finance/nbsp4/GeneralMeeting-2013/annual-reports
22 IBM Institute for Business Value analysis of publicly available
financial reports (2002 to 2012) of top 15 global CSP providers.
2013; “Global M2M Wireless Services Market 2012-2016.”
Summary page. Research and Markets Web site, accessed Nov.
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18 “Changing the World of Communications.” SingTel Annual
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24139404579015863802719736
23 Nelson, Ekow and Rob van den Dam. “Telco 2015: Five telling
years, four future scenarios.” IBM Institute for Business Value.
April 2010.
19 Guedes, Georgina. “MTN makes big foot prints in Africa.” The
Margin. June 3, 2013. http://www.themargin.co.za/features/
into-africa/105-mtn-makes-big-footprints-in-africa; IBM
Institute for Business Value analysis. 2013.
25 IBM Institute for Business Value analysis of publicly available
financial reports (2002 to 2012) of top 15 global CSP providers.
2013; IBM Institute for Business Value analysis of publicly
available financial reports (2002-2012) of top single-country
CSP providers. 2013.
20 TeliaSonera Annual Report 2012. http://annualreports.
teliasonera.com/global/download%20center/2012/areng/
teliasonera_annualreport_2012_eng.pdf?epslanguage=en;
TeliaSonera Web site. http://www.teliasonera.com/en/about-us/
markets-and-brands/
24 “Telecom industry on fast track.” July 25, 2012. China.org.cn.
http://china.org.cn/business/2012-07/25/content_26007068.htm
26 “A Global Perspective on Telecoms.” Bernstein Research.
Infiniti Research Limited. February 2013.
27 IBM Institute for Business Value analysis of publicly available
financial reports (2002 - 2012) of top 15 global CSP providers.
2013; IMF World Economic Outlook Database. International
Monetary Fund. http://www.imf.org/external/pubs/ft/
weo/2013/01/weodata/index.aspx
24
What being global really means
28 “2013 Interim Results Presentation.” Investor Relations. China
Mobile. http://www.chinamobileltd.com/en/ir/webcasts.php
29 Yahoo finance; “Apple reports fourth quarter results.” Apple
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Q3_google_earnings.html; “Amazon.com Announces Third
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30 Ibid. “Top Mobile Internet trends.” Relationship Capital.
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31 Ibid.
32 Ankeny, Jason. “Google, Facebook dominate 70% of
worldwide mobile ad revenue.” FierceMobileIT. August 28,
2013. http://www.fiercemobileit.com/story/google-facebookdominate-70-worldwide-mobile-ad-revenue/2013-08-28
33 Based on IBM analysis and assessment of tier-one operator cost
structure and cash flow drivers, as percentage of total revenue
based on the assessment of several tier one operators during the
period of 2010 to 2013.
34 “Discover supply chain.” About Vodafone. Vodafone Web site,
accessed November 7, 2013. http://www.vodafone.com/
content/index/about/about_us/suppliers/discover_supply_chain.
html
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targets procurement efficiencies.” Lightwave. April 18, 2011.
http://www.lightwaveonline.com/articles/2011/04/deutschetelekom-france-telecom-orange-joint-venture-targetsprocurement-efficiencies-120057764.html
36 “Vodafone opens in Romania regional network operations
center.” BR: Business Review. March 18, 2013. http://businessreview.eu/featured/vodafone-opens-in-romania-regionalnetwork-operations-center/
37 “Ericsson to manage Bharti Airtel network in Africa.”
Livemint.com. July 21, 2011. http://www.livemint.com/
Companies/fUhLLCkr1mhYkeyjdGHwLI/Ericsson-to-manageBharti-Airtel8217s-network-in-Africa.html
38 “France Telecom turns Orange.” Telecoms.com. May 29, 2013.
http://www.telecoms.com/145992/france-telecom-turns-orange/
IBM Global Business Services
39 Newman, Mark. “What does Formula 1 tell us about telco
aspirations to become global consumer brands?.” http://blogs.
informatandm.com/11812/what-does-formula-1-tell-us-abouttelco-aspirations-to-become-global-consumer-brands/
40 “MTN named Africa’s most valuable brand.” The Herald.
September 24, 2013. http://www.herald.co.zw/mtn-namedafricas-most-valuable-brand/; “MTN ranked Africa’s top
brand.” The New Times. 2011. http://www.newtimes.co.rw/
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41 “IT in the Telecom Industry.” ATKearney. http://www.
atkearney.com/paper/-/asset_publisher/dVxv4Hz2h8bS/content/
it-in-the-telecom-industry/10192; IBM analysis and assessment
of tier-one operator cost structure and cash flow drivers, as
percentage of total revenue based on the assessment of several
tier one operators during the period of 2010 to 2013.
42 Figures based on IBM Global Business Services research and
client experience.
43 Figures based on IBM Global Business Services research and
client experience.
44 “VimpelCom partners with WhatsApp.” Mobile World Live.
December 3. 2013. http://www.mobileworldlive.com/
vimplecom-partners-whatsapp
45 “PartyCall – Facebook partnership: When conversations turn
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party-call
25
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