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Telcos and the SME opportunity

Article written by Alison Job (MTN)

In 2020 and into 2021, COVID-19 has impacted both the way that we live and the way that we do business. This is particularly true for SMEs, says the acting general manager for SME at MTN Business, Songezo Masiso. “However, while SMEs were hardest hit by the pandemic and associated lockdown, it also opened up opportunities in the technology space that they might not otherwise have considered adopting.”

“The advent of COVID-19 has accelerated the rate of technology adoption by as much as five years,” says Masiso. “Predictions around the adoption of cloud computing services apply as much to SMEs as they do to big business, and adoption has been fast-tracked during the pandemic.”

“Businesses of all sizes found themselves facing the challenge of becoming more cost efficient as they moved into 2021 needing to find innovative ways to survive. A Deloitte report states that 40% of SMEs were so badly affected by the pandemic that they had to close their doors.”

Any business – regardless of size – that’s struggling to survive needs to manage costs, find efficiencies and cut where they can. Usually they try to optimise their telecommunications costs. However the remote workforce has made connectivity more vital than ever before. “We’ve seen a fast-paced move to cloud based solutions, such as the use of collaboration tools such as online meetings and the adoption of e-stores so that businesses can operate online.”

As South Africa has moved from one COVID-19 wave to the next, and the lockdown levels kept changing, businesses have had to change the way in which they operate. SMEs needed to develop omnichannel strategies to service their clients when they were unable to do this from a brick-and-mortar building. They also needed to differentiate themselves from their competitors.

“Telcos play a key supporting role in enabling SMEs to shift to a digital business model. They can advise SMEs on how they can adapt their businesses to operate in a virtual way as they move from an on-premise environment, with all services and data running at the office, and shift to the cloud. The remote workforce can access services and data much more easily once it’s in the cloud, this will also result in cost efficiencies for the SME from a storage and accessibility perspective.”

“Businesses are also having to move away from fixed line connectivity and into unified communications, which allows them to operate remotely. Cloud-based services such as VOIP can also reduce costs for the SME. Of course, as they move into cloud-based services security becomes a concern, which requires security services to ensure businesses’ data and systems are secure, thereby preserving the integrity of the business’s data,” says Masiso.

He goes on to discuss the three key telecommunication solutions that are available to SMEs, as often there’s a misconception that such services are predominantly accessible to large corporates. “Cloud computing and cloud storage are core services for SMEs simply because they’ve had to adapt to new ways of working from wherever they are, in a virtual manner. Collaboration services such as Zoom, Teams and Hangouts are essential to communicate with employees and clients. Unified communications is key, with solutions such as mobile PBX available, allowing the business to retain the office number that appears on its website and other marketing collateral by forwarding calls to employees’ cellphones. This reduces telecommunications costs as employees can call one another on a closed user group.

The third key technology, the one upon which the above two technologies hinge, is broadband services. “Telecommunications service providers have invested heavily in their networks to enable businesses that need broadband connectivity to operate virtually. Cloud computing and collaboration tools rely heavily on data and require good upload and download speeds, as provided by 4G and, ultimately, 5G once it’s been deployed countrywide.”

Operating in a virtual manner can present the SME with challenges around running internal systems – such as financial and HR – remotely, especially if their systems are paper-based. “A telco can guide the SME on how to move its financial systems into cloud-based systems and enable things like digital invoicing, for instance. This requires insight into the SME’s operational flows in order to help it move away from paper and into the cloud. By partnering with providers of cloud-based services, telcos can provide the SME with a packaged solution. Not only will the SME deal with a single service provider, it will benefit from improved cost efficiencies as well. Today’s telcos are moving in the direction of providing everything from hardware to connectivity to services, giving SMEs a total ICT solution.”

Finally, Masiso highlights two trends that he believes will be life-changing for SMEs. “There’s huge opportunity for SMEs in the 5G space. It’s not just a technology in the sense of providing faster broadband access, it’s more of a platform and it’s going to come into the market and change the landscape totally. There are concerns around its ability to enable artificial intelligence and automation and how this might affect manpower. But there is also huge opportunity in the SME space as 5G will open up new sectors that no one has thought about before.”

He foresees new sectors and entrants into the market arising out of 5G as demand grows for technology and skills around programming, AI and automation. SMEs will be able to provide telcos and corporates with the skills and services that they need to deploy in a 5G environment. However, this will require upskilling their employees in the relevant fields.

“While the organisation may want to deploy 5G technology, it will rely on suppliers to provide some of the component hardware or software and – most importantly – the applications and services that will run over such technology, in the market. So as much as we might currently see SMEs closing their doors during the pandemic, the advent of 5G will provide innovative SMEs with many opportunities to grow their contribution to the country’s economy. It will also empower SMEs to employ more people.”

The second trend that SMEs stand to benefit from is access to the global digital economy. “The sudden shift to a virtual business model affords SMEs the opportunity to be included in the global digital economy. All of a sudden, an SME based in a small town can set up an e-store and attract customers from around the world. This type of access gives SMEs the opportunity to grow by opening up new opportunities.”

Technology such as broadband, cloud computing and unified communications gives SMEs access to the global digital economy regardless of where they’re located. All of a sudden their target market is that much bigger, with a huge potential audience able to access their services.”

Masiso concludes, “The ability to access these – and other – opportunities is what telcos are bringing to SMEs during the pandemic. It goes far beyond just the ability to work from home, it means access to potentially life-changing opportunities.”

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