Global competition is coming to the telecommunications industry in a major way. Yes Skype and others have been around for a long time but direct competition between the telco powerhouses has been slow to evolve.
America’s largest telco, Verizon, is planning to make a push for corporate customers with its secure internet and cloud computing products in the Asia-Pacific region. This move will see it competing head-to-head with Telstra International, the overseas arm of Telstra, the largest Australian telco. Telstra chief executive, David Thodey, recently cited expansion into Asia and more multinational corporate clients as a key strategic priority for Telstra in 2013.
John Harrobin, Verizon Enterprise Solutions chief marketing officer said “We believe that we are positioned to be one of the handful of players worldwide that can serve the mission critical needs of enterprise customers,” The move into the region puts Verizon in direct competition with Telstra, which wants its international arm to sell more global data and telecommunications services to companies with offices around Asia.
Verizon also wants more business with Australian corporations. It already provides telecommunications for some Australian government departments and for companies in the financial services, mining and manufacturing industries. It is also aiming to provide cloud-computing services to medium-sized companies that have only Australian operations,
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IT services are moving from an on-premise service to a cloud-based service, and this would be a “massive disruption” in the sector, he said.
For Telstra, this type of heavyweight competition is relatively new and collaboration with new partners in Asia may be necessary. Telstra’s Asian success has been mixed in the past. For Verizon, the Asian markets will pose a new challenge – they will be aiming to sell new disruptive solutions to new customers. This is much tougher and riskier than selling products that everyone understands to customers you already know.
Which company is best positioned to win this battle? Will it be Verizon with its larger infrastructure and resources or Telstra with its traditionally stronger links in Australian and Asian markets? The answer will ultimately turn on the relative strengths of their customer cultures – their understanding of current and future customer needs and the ability of their entire organizations to deliver superior value for corporate customers. Their cultures will need to be resilient enough to understand, adapt to and act on their current and future competitors’ strategies and to have sufficient “peripheral vision” of opportunities that will require product and service innovations.
Do you have a customer culture that enables you to win competitive battles of this type? Does your corporate culture have the “peripheral vision” to identify and act on early warning signals of competitive threats and disruptive market opportunities?