Insight

Will diminishing margins halt recruitment in telecoms?

By Charlie Knight |

 

A new report from Juniper Research has indicated that global expenditure for mobile operators is now in excess of $800 billion. With costs increasing and pressure on operators to offer bigger and better deals, are companies looking to cut costs any way they can? 

The proliferation of over-the-top (OTT) services has taken a lot of business from operators, reducing profits from text and voice calls and forcing them to rely on data usage to maintain their bottom lines. To make matters worse, the costs involved in servicing consumers’ data needs have increased dramatically over the past few years. The research suggests that if operators’ costs continue to rise at the current rate, their costs will exceed revenue by the end of the decade unless they can find new revenue streams or attract substantial amounts of new business.

An analysis of twelve international operators suggest that on average margins have dropped 6.4% over the past three years and a number of operators now have single figure profit margins. The majority of companies and market analysts agree that data usage is the future for operators. Precisely how operators will make the most of increasing demand for data and how they will mitigate the increasing costs involved in delivering this service is still to be seen however.

With margins dipping into single figures, you could be forgiven for thinking that operators will be looking to cut costs and hold off hiring new staff until profits have recovered. This however is not what we have been seeing in the market place. Operators are now frantically looking for new revenue streams and ways to increase the efficiency of current streams. This is leading to an increase in demand for staff to help institute these business changes. Because of the project based nature of this work, we are seeing an especially large demand for contract workers across the globe.

With margins as small as they are, companies are now painfully aware that the right staff can be the difference between increasing profits to a sustainable level and continuing to languish in a world of high expenditures and low profits.

Source: Vine 14


Charlie Knight

Written by Charlie Knight

Charlie has 3 years experience in digital marketing, helping B2B technology companies grow their businesses through inbound marketing before joining Vine Resources as Content Marketing Manager. In his spare time, Charlie enjoys travelling and the great outdoors, and he recently hiked from Mexico to Canada for charity.