.png)
Your Gateway to Telco Innovation
Get monthly executive insights to power your telco transformation
Get monthly executive insights to power your telco transformation
Optimizing Costs in the Digital Mobile Operator Model: A TCO Benchmarking Approach
CAPEX - Transforming Infrastructure Costs with a SaaS Platform Approach
OPEX - Streamlining Departmental Costs with a Tech-Driven Approach
Impact on Earnings Before Interest, Depreciation and Amortization (EBITDA)
Benchmarking Success: EBITDA Margins of Leading Telcos (2021-2023)
Driving Financial Efficiency: The Impact on EBITDA
Safeguarding Financial Performance for Telco CFOs
The DMO Advantage: Enhancing Financial Performance
It seems like a paradox.
Telcos face increasing pressure to enhance customer satisfaction, cut costs, and diversify revenue streams in response to slowing growth in connectivity revenues - demands that initially seem at odds.
According to Boston Consulting Group (BCG), these goals can be achieved by reshaping the operating model and improving process efficiency.
To succeed, CEOs and CFOs must prioritize and select the most efficient investments, making concepts like Total Cost of Ownership (TCO) more crucial than ever.
Total Cost of Ownership takes a comprehensive, long-term approach to evaluating investments by factoring in the initial capital expenditure (CAPEX) and the ongoing operating expenses (OPEX).
By comparing the total cost of ownership of various investment options against their potential returns, decision-makers can more effectively determine the optimal path forward.
At Circles, we used TCO to identify strategic areas for cost reduction in our ideal Digital Mobile Operator model.
The model’s cost components were benchmarked against 5-year TCO data to ensure accuracy. This was further enriched with:
According to Boston Consulting Group, streamlining processes can significantly reduce costs while maintaining efficiency and effectiveness1—a strategy we adopted in our ideal DMO model.
Our approach centers around a robust SaaS platform consolidating all telco functions into a single, end-to-end, full-stack software solution. This eliminates the need for multiple vendors and reduces several cost factors, including:
Developing TCO benchmarks for telcos presents a challenge because telecommunications companies often report costs differently in their annual reports and financial data.
Using our SaaS platform, we standardized these costs in our benchmarks, allowing us to make meaningful comparisons across our OPEX categories.
With these insights, we developed targeted strategies to reduce costs further across various departments within our ideal DMO approach:
Our approach has led to meaningful cost-efficiency gains across key expense categories, directly enhancing EBITDA margins.
From our approach, we obtained these cost-efficiency results at different cost categories:
To further help guide your telco, here are the EBITDA margins of 20 major international telcos and their averages from 2021 to 2023. These were gathered and calculated from their annual reports:
EBITDA margin is critical for assessing how effectively a company converts revenue into operational profit. By adopting our Digital Mobile Operator (DMO) model, telcos can unlock significant cost-efficiency improvements across various categories, directly impacting EBITDA margins.
For telco CFOs, the DMO approach, anchored by a unified SaaS platform, provides a crucial safeguard against the financial risks of digital transformation. By consolidating all telecom functions into a seamless, end-to-end system, this model reduces the likelihood of costly integration errors often arising from fragmented technology investments.
Additionally, by adopting an "outside-in" approach—focusing on customer needs and leveraging external benchmarks—the DMO model ensures that digital initiatives are cost-effective and strategically aligned with market demands, offering telco CFOs greater confidence in protecting and enhancing their company’s financial performance.
Transitioning to a DMO model isn’t just about adopting new technology but fundamentally improving financial performance. Here’s how our approach can help you achieve this:
As the telecommunications industry evolves, embracing the DMO model is becoming essential—not just for staying competitive but for achieving superior financial performance. Our benchmarks show that telcos adopting this approach are seeing notable improvements in their EBITDA margins.
We hope these insights prove valuable as you consider the next steps for your telco. Click the button below to learn how our DMO model can transform your business.
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
Unordered list
Bold text
Emphasis
Superscript
Subscript
One of the most immediate and impactful uses of AI is in personalization. Telcos have long recognized that customer experience is more than just a differentiator—it’s central to loyalty and long-term success. AI enables telcos to create customer journeys that are tailored based on actual behavior and preferences.
Insights
23 Aug 2024
Insights
23 Aug 2024
It seems like a paradox.
Telcos face increasing pressure to enhance customer satisfaction, cut costs, and diversify revenue streams in response to slowing growth in connectivity revenues - demands that initially seem at odds.
According to Boston Consulting Group (BCG), these goals can be achieved by reshaping the operating model and improving process efficiency.
To succeed, CEOs and CFOs must prioritize and select the most efficient investments, making concepts like Total Cost of Ownership (TCO) more crucial than ever.
Total Cost of Ownership takes a comprehensive, long-term approach to evaluating investments by factoring in the initial capital expenditure (CAPEX) and the ongoing operating expenses (OPEX).
By comparing the total cost of ownership of various investment options against their potential returns, decision-makers can more effectively determine the optimal path forward.
At Circles, we used TCO to identify strategic areas for cost reduction in our ideal Digital Mobile Operator model.
The model’s cost components were benchmarked against 5-year TCO data to ensure accuracy. This was further enriched with:
According to Boston Consulting Group, streamlining processes can significantly reduce costs while maintaining efficiency and effectiveness1—a strategy we adopted in our ideal DMO model.
Our approach centers around a robust SaaS platform consolidating all telco functions into a single, end-to-end, full-stack software solution. This eliminates the need for multiple vendors and reduces several cost factors, including:
Developing TCO benchmarks for telcos presents a challenge because telecommunications companies often report costs differently in their annual reports and financial data.
Using our SaaS platform, we standardized these costs in our benchmarks, allowing us to make meaningful comparisons across our OPEX categories.
With these insights, we developed targeted strategies to reduce costs further across various departments within our ideal DMO approach:
Our approach has led to meaningful cost-efficiency gains across key expense categories, directly enhancing EBITDA margins.
From our approach, we obtained these cost-efficiency results at different cost categories:
To further help guide your telco, here are the EBITDA margins of 20 major international telcos and their averages from 2021 to 2023. These were gathered and calculated from their annual reports:
EBITDA margin is critical for assessing how effectively a company converts revenue into operational profit. By adopting our Digital Mobile Operator (DMO) model, telcos can unlock significant cost-efficiency improvements across various categories, directly impacting EBITDA margins.
For telco CFOs, the DMO approach, anchored by a unified SaaS platform, provides a crucial safeguard against the financial risks of digital transformation. By consolidating all telecom functions into a seamless, end-to-end system, this model reduces the likelihood of costly integration errors often arising from fragmented technology investments.
Additionally, by adopting an "outside-in" approach—focusing on customer needs and leveraging external benchmarks—the DMO model ensures that digital initiatives are cost-effective and strategically aligned with market demands, offering telco CFOs greater confidence in protecting and enhancing their company’s financial performance.
Transitioning to a DMO model isn’t just about adopting new technology but fundamentally improving financial performance. Here’s how our approach can help you achieve this:
As the telecommunications industry evolves, embracing the DMO model is becoming essential—not just for staying competitive but for achieving superior financial performance. Our benchmarks show that telcos adopting this approach are seeing notable improvements in their EBITDA margins.
We hope these insights prove valuable as you consider the next steps for your telco. Click the button below to learn how our DMO model can transform your business.