Telecom growth strategies are expected to rely heavily on strategic alliances, according to a survey of U.S. telecom CEOs conducted by business consultancy KPMG. When asked about the types of growth strategies they were pursuing, “strategic alliances” – selected by 65% of respondents — was the top answer, followed by mergers and acquisitions (41%), organic growth (39%), outsourcing (37%) and joint ventures (18%).
Sixty percent of CEOs forecast growth of up to 2% over the next three years and 40% expect growth of up to 5%. To support this growth, 70% of respondents expect to see headcount increase by up to 5% and 30% expect it to increase between 5% and 10% over the same time period.
Telecom Growth Strategies
KPMG sees telecom CEO interest in strategic alliances in a positive light.
“Given the maturity of the U.S. market and high acquisition valuations, telecom CEOs are embracing the opportunity to expand their offerings through targeted partnerships with organizations that can help them reach new customers, increase revenue from current customers, and potentially reduce the reach of new market competitors,” KPMG wrote in a report about the CEO survey results.
Strategic alliances give telecom companies the opportunity to minimize the investment required to explore new offerings, and customers gain access to new offerings without dealing with additional providers, the researchers note.
As for growth through M&A, 32% of telecom CEOs described their organization’s “M&A appetite” as high, while 43% rated it medium and 26% rated it low.
In exploring organic growth strategies, KPMG asked respondents about several key areas of technology investment. What the researchers found was that the CEOs are looking for quick returns on these investments.
For example, 57% said they expect a return on digital transformation programs within 12 months, and 41% said they expect a return on artificial intelligence (AI) systems within the same time period. An additional 28% of respondents said they expect a return on digital transformation programs within one to three years and 43% said they expect a return on AI systems investment in that timeframe.
Delving deeper into findings about workforce plans, KPMG asked respondents how important they expect various skills to be in supporting their organizations’ growth plans. Respondents were asked to rate the skills on a scale of 1 to 7, with 7 being “highly important” and 1 being “not important at all.”
The top answers, both rated at 5-7 by 94% of respondents, were “emerging technology specialists” and “sustainability experts.” Other skills that received strong 5-7 ratings were cybersecurity specialists (87%), scenario and risk modeling specialists (83%) and data scientists (71%).