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Telcos of the future: Six business models for the next era

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For people around the world, telecommunications services have become even more critical to everyday life since the outbreak of Covid-19. Communication networks have allowed many people to work from home and maintain social connection amid lockdowns and physical distancing. Healthcare and retail services have increasingly shifted online. Telcos have helped governments monitor and fight the spread of the virus. In short, telcos’ networks have helped keep societies and economies going.

But, paradoxically, telcos’ crucial societal role hasn’t translated into strong returns for their shareholders.

During the pandemic, telcos have created less value for shareholders than every sector but one, financial services, according to Bain & Company analysis of nearly 8,000 companies worldwide. From February to mid-December of 2020, telcos’ total shareholder return (TSR)—which measures the total return a shareholder receives from share price changes and dividends over a certain time period—trailed the average of all sectors by 16 percentage points, though the top quartile of telcos managed to outperform the cross-sector TSR average. What’s more, telcos have fallen further behind the longer the pandemic continues. From April to mid-December, telecommunications was the worst-performing sector as measured by TSR.

That means the pandemic has only exacerbated a trend that has frustrated industry stakeholders for years: Despite telcos’ massive investments in infrastructure and services aimed at realizing the vision of a digital economy, the financial rewards appear to accrue to others. The stark contrast between the sense of pride that many telco leadership teams and employees have deservedly felt about their pandemic response, and the subsequent financial outcomes, is telling.

The road ahead won’t be easier. As we look to the current year and beyond, telcos face unprecedented challenges in responding to the continuing Covid-19 crisis while simultaneously trying to stay ahead of  a rapid industry transformation that began before the pandemic . Leading companies will navigate this tumultuous period by making strategic choices to secure the future of their business and improve their value creation—even if it requires a bold transformation.

We see six primary telco business models that will underpin the profound changes in the communications industry’s market structure over the next decade.

#1: Integrated . Competition will further intensify among companies that adhere to the traditional model of the integrated telco that provides a comprehensive set of services. Premium product bundles typically attract most of the value, which will likely push telcos to integrate fixed and mobile services, and accelerate market consolidation. In addition, many of these integrated telcos will start bundling third-party services with their core offerings, while at the same time opening their networks to other enterprises for use in their respective businesses.

#2: Value-focused.  As stand-alone connectivity further commoditises, customers will increasingly opt for lower-cost, “good-enough” services. As a result, a value-focused set of telcos will choose to compete by shedding some of the most costly aspects of the traditional model and focusing on more concentrated coverage, narrow product lines, and customer service functions powered by automation and self-service tools. 

#3: Pure infrastructure . The separation of network assets into stand-alone entities is becoming more common. Compared with integrated carriers, pure-play telecom infrastructure companies’ advantages include the ability to more freely resell their assets and raise the utilization rate of their networks. This creates value that accrues to all participants. Despite the recent merger-and-acquisition activity and the high prices in this segment of the industry, we view the current phase as only the beginning for pure infrastructure companies.

#4: Asset-light . As network infrastructure becomes more widely available, it will be possible to rent capital-intensive network assets only when needed. This will give rise to a class of asset-light telcos that can earn sufficient profit through services that more than cover the costs of network rents. The result will be the proliferation of asset-light models not only in connectivity, such as providing managed network services, but also in consumer and enterprise network security, communications services for healthcare, and many other segments.

#5: Smart platform.  As digital economies advance, demand for core, network-centric telecom capabilities will surge. Telcos have the chance to play an important role in the growth of digital-enabled economies by configuring their capabilities so that they’re easy for technology and digital service companies to discover, consume, and scale up. Yet telcos probably cannot build and orchestrate these platforms alone. In order to capture a meaningful share of the future wealth creation, the most successful telcos will forge the right partnerships with established and rising digital leaders. 

#6: Digital niche.  As smart platforms proliferate and power digital economies, starting and running a digital-focused business is going to be easier than ever. Less capital will be needed for upfront technology investment. Far fewer specialized employees with niche talents will be required. Fixed costs will decrease as resources can be rented or purchased as needed. With the barriers of entry lowered, telcos can more easily experiment with new businesses focused on digital-powered products and services adjacent to the sector’s traditional model. Edge and cloud computing, the Internet of Things, and digital media are just a few examples of rapidly evolving sectors that open up opportunities for many companies, including telcos, to design and scale up new ventures.

Some of these models are gaining traction now, while others remain a few years out—or less. Nevertheless, their catalysts are already well underway. That means telcos have an opening now to tap into new sources of value and put their companies in a strong position for the future.

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A blueprint for telecom’s critical reinvention

Each generation of business leaders tends to believe that the challenges they face are more profound than those endured by previous generations. For the current generation of telecom leaders, this is stark reality, not merely perception.

Over the past decade, telcos have been under continuous pressure as their traditional value pools have gradually eroded and new growth horizons have proven elusive, driving return on investment capital (ROIC) ever closer to weighted average cost of capital (WACC). While telcos rose to the challenge of 2020—connecting people to work, school, family, and healthcare—the pandemic accelerated and amplified trends that were already redefining the basis for success.

Our prior research has demonstrated that organizations that move early to restructure and change during times of crisis come out ahead in the subsequent decade . Therefore, we believe that 2021 will be a critical year for operators: a unique opportunity to fundamentally reimagine their business or, alternatively, risk another decade of decline.

The next generation of telcos will be defined by leaders who act now, risking short-term incumbency advantages to seize untapped growth. The current moment demands a holistic, future-back approach to transformation, in which leaders deliver on four or five bold, integrated changes to reset their organization’s DNA.

Decision time for telcos

By the time the pandemic hit, the telecom industry had been managing over a decade of disruptions, driving deteriorating economics (Exhibit 1). There has been customer-back disruption , in which digital-native companies like Uber and Netflix have set a new standard for seamless online experiences, forcing incumbents to redefine their interaction models. There has been business-model disruption , with technologies like AI, big data, and the Internet of Things redefining service-delivery and value-capture models. There has been new-entrant disruption , with increased competition among traditional players as well as nontraditional players, which have shifted value toward technology-focused parts of the value chain (for example, software-defined networking in a wide area network [SD-WAN], software as a service [SaaS], and over the top [OTT]).

Most operators responded to these daunting challenges with a mix of efficiency measures, digitization efforts, structural changes (such as network sharing), and productivity improvements. In parallel, many expanded into new industries, such as TV and information and communications technology (ICT), to increase revenue streams. As demonstrated by pre-COVID-19 performance, though, that formula has been running out of steam.

The pandemic amplified the urgency of profound, accelerated reinvention. It provided a blueprint for a faster, leaner new operating model, made possible by rapidly shifting behaviors. And it put telcos front and center, as almost every aspect of human interaction moved online amid lockdowns and physical-distancing measures.

Faced with an unprecedented crisis, operators innovated quickly, adopting rapid decision-making and response processes across the board—from assurance to credit decision making to pricing—with an absolute focus on customer support. Throughout the pandemic, they were remarkably responsive to customers’ rapidly changing habits and surging connectivity needs. Operators kept people connected to vital public-health and safety information, supported enterprises and their employees in work-from-home arrangements, and helped to maintain the (virtual) fabric of families and communities worldwide. In many cases, they took it upon themselves to make remote learning and online business possible in underserved communities. And for an entire ecosystem of suppliers, distributors, and partners, they acted as an anchor.

At the same time, the industry was experiencing seismic, irrevocable shifts. Customer behaviors leap-frogged five to ten years ahead. The importance of digital-enabled sales interactions doubled, with consumers moving online and increasingly embracing self-service customer care. One Asia–Pacific (APAC) operator, for example, was able to transition its entire B2B customer base to its digital portal in less than six months, rather than the original three-year plan.

Bandwidth-heavy activities like remote learning, gaming, and videoconferencing grew dramatically, a change that is expected to be permanent. More than half of companies expect to see increasing migration of assets to the cloud , creating demand across both operator and adjacent value pools. And consumers are paying more attention to how companies do business , with issues like sustainability or values increasingly factoring into their buying decisions.

On the flip side, while tech companies (including digital natives like Tencent and Amazon and large, tech-centric businesses like Samsung, Sony, and Qualcomm) increased their investments by more than 30 percent in 2020, supporting long-term changes and new growth vectors, operators reduced their capital-expenditure investments by around 2 percent, on average. 1 S&P Global; Corporate Performance Analytics by McKinsey. This response made sense while navigating 2020’s challenges, including supply-chain shortages and call-center closures. Nonetheless, 2021 demands a wholly different approach: a doubling down to emerge stronger.

Companies that emerged from the 2008 global financial crisis in sound shape succeeded by leading with a through-cycle mindset, pulling back in some areas but ramping up in others while protecting innovation and sales capabilities. They were able to grow during the downturn and early recovery stages because they made big moves—including three times more cost reduction, five percentage points more deleveraging, and 20 percent more acquisitions—and they made them early (Exhibit 2). Significantly, their outperformance persisted for ten years.

In 2021, telcos find themselves at a crossroads: they can either tinker around the edges to achieve incremental gains or make a bold choice to reinvent their value-creation formula and bravely, firmly commit to that choice—seizing the opportunity to create a permanent new role for themselves in a world reshaped by a pandemic that put them at the center.

Would you like to learn more about our Technology, Media & Telecommunications Practice ?

Reimagining and reverse engineering the telco future.

To design a new, value-creating role for themselves in a post-COVID-19 world, operators must first define a detailed vision of what the reimagined telco will look like. From there, leaders have to take a future-back approach, reverse engineering their vision by making three to four bold moves that fundamentally change the DNA of their organization. These carefully orchestrated moves, undertaken simultaneously, build on one another—shifting performance, yielding new service models rooted in new capabilities and success factors, and delivering growth as well as cost and capital efficiencies.

Given the extraordinary pressures the industry is facing, we recommend an almost “greenfield” approach, with minimal regard for the starting point. Often, this will require a new mindset on the part of the leadership, which may be more accustomed to resetting the business “today forward” rather than fully reimagining it future back. This involves painting a clear, vivid picture of how you will reimagine across five critical axes:

  • Your core business, including value pool and service model. As hybrid networks, edge computing, and full cloud migration change the definition of enterprise-grade connectivity, operators will need to change how they monetize their assets. They’ll need to move away from selling network services and toward selling outcomes, as measured by cloud performance, security, and resilience.
  • Your approach to customer engagement. As digital natives set a new benchmark for customer experience across industries, operators can capitalize on recent behavioral shifts to rethink their approach to serving, satisfying, and delighting customers.
  • Your network, IT, and data. Telcos’ success will hinge on their ability to leverage data and deploy advanced analytics, AI, and automation at scale to drive new sources of growth and change the broader economics of the business.
  • Your approach to talent. Unlike tech companies, most telcos are relatively hierarchical. During the pandemic, however, they began cutting through established decision-making frameworks to enable change to happen much more quickly and pervasively. Shifts like these will be critical to future success.
  • Your relationships with stakeholders and society. Operators have played a crucial role in society throughout the pandemic, not only connecting people to work and family, but also helping create features like contagion heat maps and virtual clinics. Going forward, there’s an opportunity to cement this critical societal role by engaging stakeholders and advancing public health, education, and connectivity across communities.

Example: How an APAC telco reinvented itself

With increased competition, deregulation, and changing customer behavior threatening more than a third of earnings before interest, taxes, depreciation, and amortization (EBITDA), a leading Asia–Pacific (APAC) operator faced a defining fork in the road: manage a slow decline with a mix of cost cuts and new capabilities or discard the old playbook in favor of a broad, bold reinvention.

The telco was no stranger to change, having just finished an ambitious three-year cost-out transformation that involved reducing operating expenses by more than 25 percent while investing in a new business-support-system (BSS) stack. But the landscape had shifted, with most opportunities requiring a full reset of the business and its underlying economic model, as well as speedier innovation.

The leadership team chose to seize the opportunity for reinvention. Over two months, a small group sketched out a vision for the company using a future-back approach. They went through the difficult process of questioning long-held beliefs about network differentiation, customer stickiness, and brand power. Ultimately, they chose to pursue a “premium network” play, based on their existing premium positioning and ability to expand their network advantage in a 5G world.

To deliver on this promise, the team recognized the reimagined telco would need three core capabilities: first, digital-first, simplified usage; second, a disruptive go-to-market strategy through a revamped, streamlined product set with full contractual flexibility reemphasizing network and value-added-service leadership to limit churn; and third, a revamped operating model that would support shorter cycle time and customer-first thinking, while taking out another 20 percent of cost. These measures would fund the change and reinforce the much-needed emphasis on simplification.

This led to a three-year transformation across six major streams. Each program worked in close collaboration with the others, ensuring that parallel changes were self-reinforcing. The new organization, for example, enabled the creation of a leaner, more innovative set of functions, which in turn supported simplifying the customer experience and removing 95 percent plus of products.

Each element was centrally planned to drive the end-state blueprint and associated guardrails, then designed and delivered with a mix of local and top-level orchestration. Critically, the blueprint was continuously refined as the market evolved and the plans took root.

Eighteen months into the transformation, the telco’s share price had climbed 40 percent. The organization was already 20 percent smaller and halfway toward its goal of removing more than 90 percent of its products. The agile elements in place positioned the telco to better monetize assets and deliver on customer experience as it moved to complete the ambitious transformation.

The following three archetypes are examples of potential end states to design around. Each archetype demands different responses in the areas outlined above. While this list is not exhaustive, these archetypes illustrate some of the possible pathways toward sustained competitive advantage for operators.

  • Operational and infrastructure-led excellence. This archetype is defined as a classic, integrated provider of telecom services that captures the value of data and, in parallel, optimizes network total cost of ownership (TCO) and physical footprint to provide high-quality, reliable connectivity services. This archetype can be successful with either a commodity-driven approach, prioritizing efficiency and low costs, or a true network-leadership approach, which will likely require sizeable investments in 5G, broadband, and other capabilities to achieve structural advantages. Iliad, now the sixth-largest mobile provider in Europe, has embraced the commodity-driven approach to this archetype. In France, for example, Iliad disrupted the market by offering customers significantly lower rates and only three simple products. (For an example of the network-leadership approach, see sidebar, “Example: How an APAC telco reinvented itself.”)
  • Service-centric operator. This archetype is defined as an agile, digital-first provider of telecom services (and more) that meets the expectations of digital natives through fully digital experiences, including customer care. Incumbent operators pursuing this archetype must make fundamental business, service-delivery, and operating-model changes that can be difficult to deliver. To succeed, they might emphasize premium, customized product leadership; create an unparalleled customer experience; or target a focused segment of the market in a unique way. After undergoing a full review of its user interface, a European operator invested in a “digital factory”  to fully reset its journey, then adapted its offering around a set of household and family experiences. Similarly, a North American company differentiated itself through premium content and strength in the connected home ecosystem.
  • Ecosystem provider and adjacencies. This is a digital-first ecosystem player that’s integral to customers’ daily interactions by providing access to a portfolio of diverse digital products and services. This option requires an agile operating model and extensive partnerships in industries such as financial services, professional services, and energy. The ecosystem archetype may appeal to traditional operators eager to lean into self-disruption because of the great revenue pressures they face. But the broad, international competitor set that exists in many markets is a meaningful obstacle. In one example, a global operator doubled down on managed services, particularly around hybrid cloud and security. It launched a series of acquisitions (up to 50 percent of its size), transformed its go-to-market strategy, and reset its approach to software and delivery, prioritizing standardization and zero-touch delivery.

Each of these archetypes, and the many other permutations that exist, has the potential to deliver market-beating returns on investment. The decision to pursue one over the other will depend on your starting point, market specificities, and appetite for change. In all cases, leaders will need to discard the industry’s familiar transformation formula of sequential projects and incremental changes in favor of an ambitious future-back approach. This will depend on pulling a subset of instrumental levers to fundamentally and irrevocably upend their organization’s entire makeup.

Nine key levers for holistic transformation

The decision to pursue one archetype over the other will depend on your starting point, market specificities, and appetite for change.

While most CEOs might be looking at the right areas—simplification, digital, agile, managed services—few are moving as quickly or deeply as the current environment requires.

We believe there are nine structural levers (Exhibit 3) with the potential to radically transform both business and operating models, catapulting telcos into their chosen future. Each represents a turning on its head of all that is familiar. In general, we advise that companies pull at least four to five of these levers simultaneously, beginning now and continuing over the following two to three years.

Levers fall into three main categories outlined below.

Customer engagement

To create and scale digital-native customer experience, or CX (as Sprint, for example, has done), operators would move away from digitizing existing interactions. Instead, they would focus on designing entirely new interactions by focusing on a digital-back approach to create distinctive digital experiences robust enough to be customers’ first port of call. By pulling this lever, a Southeast Asian operator boosted its Net Promoter Score (NPS) by 40 points, increased unsupported interactions by more than 70 percent, and reduced cost to activate and cost to serve by 30 to 50 percent.

To adopt a zero-touch service model , operators would move aggressively toward simplified product- and service-agreement portfolios, supported by fully automated, AI-enabled, cloud-based processes (Exhibit 4). This digital-first strategy departs from the familiar approach of incrementally making manual work more efficient through piecemeal offshoring and outsourcing. Operators such as BT and MASMOVIL have embraced a radical, future-back redesign of their service operations, enabling them and others to drive down costs (up to 35 percent in one case) while improving cycle times, improving accuracy, reducing call volume (up to 50 percent in another case), and increasing NPS by 20 points.

Other options for reimagining customer engagement are to build new businesses at scale or go to market with a radically simplified product offer . Today, operators generate an average of 10 to 15 percent of their revenues outside of core connectivity. There are a few exceptions, notably in the United States and Japan, following large M&As; generally, though, these ventures remain subscale and at challenging profitability levels. Going forward, operators will need to couple big bets with a clear reallocation of resources and management bandwidth while reinventing themselves across all parts of the business (for example, sales moving toward solution selling, operating model transitioning to a more digital-native agile model, emphasis on new capabilities with data and software developers at a premium). The focus will likely move more toward B2B, with edge computing, managed services, and broader ecosystem plays. By doubling down (both in terms of investment and operational change) on three such new businesses, a Southern European operator grew revenues by more than 20 percent.

Network and IT

Transforming a legacy stack cobbled together over decades of business evolution and M&A is extremely costly and slow, so many operators are choosing to decouple and deploy a greenfield IT stack that is fully cloud native and leverages open-source technologies. With evolutions in open source and cloud, a reimagined stack is affordable, easy to maintain, and can accommodate quick changes. This approach has enabled an APAC operator to reduce capital expenditure by 80 percent and a European operator to increase IT velocity—the time it takes to go from feature definition to release—by up to ten times.

By moving to deploy an asset-light network , an East Asian mobile operator reduced network total cost of ownership by more than 20 percent. The operator used a shared network, differentiating itself through customer experience and product differentiation. Beyond network sharing, new technologies like open radio access network (RAN) (Rakuten is a leader in this approach) are fundamentally resetting economics and traditional constraints. In so doing, they are not only reducing traditional barriers to entry for new operators, increasing competition, but also offering new opportunities for incumbents as they deploy 5G.

Using advanced analytics, operators can run thousands of simulations to prioritize capital spend across a portfolio of projects, allowing for greater transparency and quicker decision making.

Telcos are also focusing on driving capital efficiency, notably through analytics , to avoid the familiar frustrations of capital projects, like competing demands on scarce capital, limited visibility into projects’ performance, and budget overruns. Using advanced analytics, operators can run thousands of simulations to prioritize capital spend across a portfolio of projects, allowing for greater transparency and quicker decision making. Applying these principles to a 5G rollout, an Asian telco accelerated deployment timelines by a full year.

Structure and talent

By pursuing structural separation and introducing new external capital, an Eastern European operator increased ROIC by over 50 percent and doubled available funds. Separate entities allowed the network to attract cheaper capital, grow revenue, and gain regulatory relief while avoiding the difficult trade-offs inherent in a closely integrated structure. Moreover, this forced the noninfrastructure part of the business (the “serveco”) to confront a new set of economics and determine how to differentiate itself going forward: Would it win on customer experience? Price? Personalization? This questioning sharpened the focus on the basis of competition and a broader capability set.

Finally, by moving to a radically simpler operating model, operators are resetting their internal systems, processes, and capabilities to compete effectively against digital natives, increasing speed to market and continuously improving customer experience. Spark NZ and TDC are among a group of operators that have started down this journey, driving changes over an 18- to 24-month period that include significantly increasing speed to market, employee engagement, and productivity. In creating a flatter organization made up of cross-functional teams , each with clear links to business value and the resources to deliver  on their missions autonomously, these operators are able to fluidly reallocate talent, considering employees’ skills and interests and prioritizing “doers” over managers.

To illustrate how each lever works, consider our archetypes. A telco taking a commodity-driven approach to achieve operational and infrastructure-led excellence may go to market with a radically simplified product offer, deliver a zero-touch service model, manage capital expenditure through analytics, and deploy an enterprise-agile operating model. While producing 95 percent fewer products, this operator could reduce the cost to serve by 30 percent, increase productivity by 30 to 50 percent, increase NPS by 30 points, and improve ROIC 2 to 4 percent. (For an example of a telco taking a network-leadership approach to achieve operational and infrastructure-led excellence, see the sidebar, “Example: How an APAC telco reinvented itself.”)

Alternatively, a telco that chooses the ecosystem-provider and adjacencies archetype might create digital-native scaled CX, build new businesses at scale, decouple and deploy a greenfield IT stack, and deploy an enterprise-agile operating model. This approach could boost growth by two to three percentage points, NPS by 40 points, and employee engagement by 30 points. It could, based on our experience, increase speed to market tenfold and IT velocity by more than 50 percent.

While pulling these levers, it is critical that leaders closely track key performance indicators, adjusting course where necessary. They will also need to develop the talent, governance mechanisms, processes, and mindsets essential to drive and sustain dramatic cultural change.

Connected world: A broader evolution beyond the 5G revolution

Connected world: An evolution in connectivity beyond the 5G revolution

A dynamic roadmap for a pivotal year.

Business transformation is notoriously difficult; in fact, 70 percent of all transformation efforts fail. Because telcos’ future success depends on their ability to drive not one but three to four large-scale transformations simultaneously, the risks rise exponentially.

Because of both the scale and pace of change, as well as the complexity of making it happen, CEOs cannot rely on the historic transformation formula of sequential, largely siloed programs, with a central team driving reporting and tracking. The transformation playbook must shift across two dimensions: scale and change management.

First, operators need to revisit their ambition and deliver not one or two bold changes but four or five. These changes must be delivered in an integrated manner, over two to three years (rather than four to five). Moves conducted in parallel must build off of, enhance, and inform one another. For example, a “flip” to agile may be effectively combined with the required model and capabilities to support a greenfield IT stack or new business—resulting in the accelerated launch of new business ventures or zero-touch service models.

Most journeys start with the clear articulation of a bold, structurally transformative end-state vision of the operator and its value-creation formula. Once this direction is set, and the required shifts identified, leaders must develop a blueprint detailing each move and how they fit together into a coherent model. The blueprint should lay out the roadmap from the end state back (versus from today forward), highlighting cross-functional and cross-program interdependencies, critical value drivers, and associated operational changes (for example, reduced truck rolls, changes in billing, and new fulfillment rules).

By its very nature, the blueprint will need to be constantly revisited to reflect the reality of delivery, with programs paused while upstream dependencies are resolved, ensuring resources are free to flow to the areas of highest impact.

Second, leaders must pursue a multilevel orchestration, with change, culture, and capability at its core. Teams will need to work across silos, with traditionally “back office” parts of the business embedded in frontline teams and digitalization work leveraged across business-unit lines. Facilitating this typically requires some changes to incentive models and considerable effort deployed around middle management.

In general, we would see a three-level orchestration approach (Exhibit 5), with the central team acting as an orchestrator, challenger, and enabler to the rest of the organization—ensuring pace, driving interdependency, and continually updating the blueprint. Because a multilevel transformation is simply too big to be delivered exclusively from the center, teams must genuinely be empowered to work with one another, clearing bottlenecks and adjusting sequencing when necessary. Some operators have gone so far as to recast their “accountability framework” as an “empowerment framework.”

To gain buy-in for this enormous change-management challenge, leaders must translate their blueprint into a clear, coherent narrative for employees, investors, and other stakeholders. The narrative should articulate how each piece of the work contributes to the organization’s larger strategic goals.

Finally, CEOs will need to be aggressive in setting a course and forging ahead. This is especially critical when the change requires the leader to bridge differences in stakeholders’ views and expected time horizons and when the leadership team needs to work together at greater speed and effectiveness than most are used to. We see five critical moves:

  • Bridge the needs of different stakeholders, including investors, working with the board to balance current momentum and results with long-term sustainable value creation and social license to operate.
  • Resist the tyranny of short-termism, focusing on long-term value-creation logic and levers and, where necessary, resetting in-year forecasts and expectations.
  • Reframe the approach to risk, focusing on upside as well as downside, laying out and assessing clear trade-offs, and allowing the company to set an aspiration that redefines it.
  • Be the catalyst, not the expert, leading through uncertainty, setting the direction, and empowering those with the greatest expertise to lead the way.
  • Shock and unfreeze the organization by driving significant change in the first 12 months and using “moments of truth” to signal that business as usual is over.

Transformation is nothing new to the telco industry. Operators have been reshaping themselves over the past several decades to drive down costs, introduce new digital channels, and deploy new technologies. Along the way, the most effective leaders have demonstrated qualities that remain relevant for any transformation: the imagination to envisage how things can be different going forward, the courage to pursue that vision, and the commitment to inspire others to join the journey.

The next wave of change for operators is more fundamental in nature. The telco landscape of the next decade will be shaped by the extent to which today’s leaders can recognize the magnitude of change that is already under way—and act with speed and conviction to truly reimagine how their organizations can thrive, front and center, in this new reality.

Zakir Gaibi is a senior partner in McKinsey’s New Jersey office; Gareth Jones is an associate partner in the Sydney office, where Pierre Pont is a partner; and Mihir Vaidya is a partner in the Toronto office.

The authors wish to thank Fan Gao, Alexey Goldov, Gustav Grundin, Chris Hartley, Amuche Okeke-Agba, Karolina Sauer-Sidor, Mohit Sharda, Kabil Sukumar, Oskar Tetzlaff, Oleg Timchenko, and Benedict Vanderspar for their contributions to the article.

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The telecommunication industry has a central position in the lives of business and people, sitting at the heart of a world that is becoming more connected every day — more digital and more virtual. In order guarantee innovative communication services like broadband and 4G in the recent past and now 5G, communication providers need to bear large investments.

The generation of an adequate return on those investments is challenged by the extreme competition in the industry . Telecom carriers operate in mature and saturated markets, often characterized by high levels of subscriber churn and expensive acquisition costs. Adding new services and products that go beyond mere communication has proven difficult due to the presence of over-the-top providers leading to some of the most lucrative areas of business including social networks, music and video streaming, web search and others.

Learn how industries are revolutionizing business with IBM Blockchain

That is the reason why carriers are now operating according to innovative strategies and are implementing new organizational structures, new technologies and new business models to provide new services and be competitive with non-telecom organization as well as with other telecoms.

Blockchain has been imposed as a driver of this change and an enabler of a new strategic, collaborative approach: the platform business model. Different players leverage industry-wide platforms to provide services and generate benefits, competing and collaborating with the other members.

Collaboration is a strategic imperative

Last week, I had an opportunity to sit down (virtually) with three companies that spent the last few years building ecosystem that made an impact in the industry.

Syniverse has been for a long time at the core of the roaming business, serving hundreds of carriers globally. They were the first to recognize that 5G and internet of things will change the very essence of roaming traffic and that blockchain represented a more transparent and efficient way to leverage such a large amount of data to implement new services and monetization models. Syniverse has embraced a proactive approach to transformation, deciding to anticipate the market and the competition and engaging with IBM to develop a new blockchain-enabled platform.

The new platform will support their business in two ways: on one side it will allow Syniverse to improve the efficiency and accuracy of their clearing and settlement activity in the telco industry, from roaming services to any kind of data that carriers may generate. On the other, the flexibility and scalability of the platform supports the extension of the same services to adjacent industries.

TBCASoft , on the other hand, reinforced the role of telecom carriers as trusted providers developing a blockchain platform that enables telco-led use cases like mobile payments and digital identity . Billions of people in the world interact with communication service providers (CSPs) on a daily basis. We trust CSPs with our personal, location and payment data.

What carriers need to leverage the data and trust is a reliable platform which allows the sharing of data and performs transactions across networks. TBCASoft built such a platform. The platform is a blockchain for telco that enables several use cases , like mobile payments and digital identity. Users can spend money with their telecom provider digital wallet when they are traveling abroad in a near seamless fashion, leveraging blockchain for back-end reconciliation.

Finally, Deutsche Telekom , one of the global leaders of the industry, embodies the transformation we talked about, creating their own blockchain platform, which is open source, accessible to other carriers and developers, with the scope to co-develop the next generation of applications. Deutsche Telekom’s platform can be seen as blockchain as a service, that abstracts from specific protocols and is compatible with every software system.

Innovators in the industry can leverage it to enable their applications with blockchain or to build new ecosystems. In addition to that, Deutsche Telekom also created an application that aims to digitize and improve the wholesale roaming process, starting from translating roaming contracts into smart contracts that enforce blockchain transactions.

How leaders see the future of the telecommunication industry

These three companies are different in size, history and role, nonetheless they all recognized the following imperatives of the telecommunication industry evolution:

  • Competition is getting tougher
  • Cooperating with traditional and new competitors and other organization in the ecosystem is a way to innovate and generate new business opportunities
  • The new business model is a platform-oriented one where utility is distributed across companies that work together
  • Blockchain is the ideal platform to manage such ecosystem, since it generates trust, enforces business rules, tracks assets and transactions, and protects data.

I would encourage you to join the virtual panel discussion where the leaders of these organizations will walk you through the role of blockchain in the telecommunication industry and how they are fostering adoption of their platforms and applications, taking into account business benefits, different protocols, governance models and standards.

The future of blockchain

The business models of future ecosystems and platforms will pivot around humans, data, devices and services. Blockchain will empower the self-governing transaction across these components and enable the creation of new values for all participants: most transactions in the future will be enable, approved and guaranteed by blockchain.

Register now for the Blockchain in Telecommunications webinar

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The platform business model: the new way for telcos to compete

The pipe business model is broken. how can the telco industry re-appraise its strategy, we are in a marketplace where we sell outcomes, not products.

Up until 2007 mobile handset manufacturers were profitable and Nokia, Samsung, Motorola, Sony Ericsson and LG controlled 90% of the industry’s global profits. By 2015 Apple had commoditised that market with the iPhone (note 1).

This was prime example of the power of the platform business model, and since then, it appears that any successful company in the digital economy, especially unicorns (private companies with over USD 1 billion valuation), have created a platform rather than sold a product. 40% of the world’s top 30 brands are now platform businesses.

The age of platforms, data and ecosystem management

We are at a tipping point where the platform economy will affect every company in every sector. All companies will need a platform strategy, even just to assess which ecosystem partners to work with, to grow and protect their business.

The telco sector knows that it needs to restructure and refocus its business to be successful. Their networks offer a key enabling role in the digital economy, where their assets and data can support emerging sectors such as smart cities, smart homes and connected cars.

An open platform will create new opportunities for telcos to compete in the digital economy.

The IoT and the telco opportunity

Our analysis shows that the market for IoT-enabled services could reach over USD 8 trillion in 10 years’ time, up from USD 0.7 trillion today. It offers significant opportunities for telcos to play an active part in a diverse ecosystem of technology suppliers, vertical domain experts and channel partners, beyond just connectivity.

This is a highly complex task, considering the full scope and span of IoT opportunities and the many different players involved. The main challenges, as voiced at the event, are service orchestration and monetisation.

Deriving value through a platform business model

The influence and success of digital platforms cannot be ignored. They are the new model of economic activity. By aggregating consumers and producers through an ecosystem, companies can expect to see performance improvement, leveraged growth, distributed innovation, and, in some cases, restructuring of markets.

Technology has made it easier and cheaper to share assets than ever before. Apple iTunes is one such example of this in the consumer market. BT with its new cloud of clouds vision is an example in a B2B context. Samsung suffered because it lacked the control points of a strong platform model. On the most part, the same can be said of telcos.

How does the platform work?

The real strategic value of a digital platform is to harness the service offerings from a diverse supplier base, and then to use shared orchestration, monetisation and administration tools to offer new service bundles.

Over time, the telco’s platform should grow to host many tenants paying to use their infrastructure – fostering a marketplace for innovative service bundles and channels to new market segments. By adopting this strategy, this supports the move from being providers of telecoms and ICT services, to creators of digital innovation platforms that drive local economic growth.

The role of application programming interfaces (APIs)

APIs are a key ingredient to a successful platform. They enable flexible partnerships for new services, the platform must provide an open and non-proprietary interface. TM Forum announced at the event that nine of the world's largest service providers -- Axiata, Bharti Airtel, BT, China Mobile, China Unicom, NTT-Group, Orange, Telefónica and Vodafone -- officially adopted TM Forum's suite of Open APIs for digital service management. BearingPoint’s Infonova R6 also conforms to these standards.

Overcoming the monetisation challenge

How do you ensure everyone involved in service delivery gets paid the right amount, on time? A platform based business model enables telcos to not only engage with complex service management, but most importantly, to effectively monetise their business. Undoubtedly, a great deal of money can be made from every aspect of a platform, but it's also important to recognise the value of customer data that can be captured and managed in the platform. In the long run, this can prove even more valuable than the immediate monetary gain.

Closing thoughts

For the traditional telco, embracing a platform business model provides a new way to grow, increasing relevance and value in the fast expanding digital economy.

Here are some key points to think about:

  • Make data asset management a top priority – Data is the key asset for the future, the ‘oil of the digital economy’. Much greater effort must be made to manage it across silos so it can be exploited effectively. This forms part of a much more expansive API strategy.
  • Harness the synergies of all stakeholders – platforms should be designed to leverage the expertise, participation and data of all users – customers, suppliers, partners, developers – to create innovative new solutions for markets.
  • Think about long term value creation – Major players in the telco world are recognising that there is money to be made through the platform economy. But rather than focus on short term revenue gains, remember that platforms take time to create exciting network effects. The platform needs curation and careful nurturing.
  • ‘Pipelines, Platforms, and the New Rules of Strategy’, Harvard Business Review, Marshall W. Van Alstyne, Geoffrey G. Parker, and Sangeet Paul Choudary, April 2016 issue

Sylvain Chevallier

Would you like more information?

If you want to get more information about this subject please get in touch with our experts who would be pleased to hear from you., from digital mobility to analytics, we help companies in the automotive sector.

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Business Model Canvas Template

Determine and align your business priorities in a simple and visual way with the Business Model Canvas Template.

Trusted by 65M+ users and leading companies

About the Business Model Canvas Template

The Business Model Canvas template, designed by Alexander Osterwalder and Yves Pigneur, provides a strategic and powerful way to understand your business. The Business Model Canvas (BMC)  displays a business model, and it contains nine blocks: fill in each one using stickies, links, sketches, pictures, and videos. Use this business model template collaboratively with your team to clearly explain and visualize your business.

How to use a Business Model Canvas template: 9 key elements

The canvas provides nine key business elements to illustrate, summarize, and track. The nine building blocks of a BMC template are:

1. Key partners

List the key partnerships your business leverages or relies upon for success. Include the resources or value your business gets from these partnerships.

2. Key activities

Summarize the key activities that allow your business to provide services and deliver on your value proposition.

3. Key resources

List the key resources your business relies upon or uses in order to operate and provide services.

4. Key propositions

Summarize the different value propositions that set your business apart from your competition.

5. Customer relationships

Define and describe the primary relationships you have with your customers, including how you interact with them, how these interactions differ among different types of customers, what different customer needs are, and the level of support the different customers receive.

6. Channels

Detail how your customers are reached, how your services are provided, your different distribution channels, and how your value proposition is delivered.

7. Customer segments

Define the ideal customer personas your value proposition is intended to benefit, then describe the key differences between these segments and potential steps in the customer journey.

8. Cost structure

Identify the primary costs associated with operating your business and providing your services, then detail the relationship between these costs and other business functions.

9. Revenue streams

Describe how your business generates revenue through the delivery of your value proposition.

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When do you use the Business Model Canvas template?

Business Model Canvases are not intended to serve in place of a business plan . Instead, the BMC template is used to summarize and visually illustrate the most important information of a business model and to provide centralized ongoing clarity.

This canvas is appropriate for illustrating existing business models, regardless of whether the business is new. The BMC template is also appropriate for visualizing new business models for startups, as it helps organize and consolidate ideas around your key functions. Keep in mind that the Business Model Canvas should be reviewed periodically, as all the factors listed can change over time.

5 Benefits of creating a Business Model Canvas online

Filling in the BMC template makes it easy to visually and collaboratively outline the core aspects of your business's unique value proposition. Here are a few benefits of using the template:

1. Provides a structure for ideation

The Business Model Canvas is extremely useful for structuring your business model visually. This helps at different stages of defining your business canvas and makes it easy to keep up-to-date as strategies shift.

2. Focuses you on your value proposition

It can be easy to get distracted by the varying factors involved in running a business. The value proposition is at the heart of the entire Business Model Canvas template, so you can continually focus on why your business exists. You should use your value proposition as a guiding star to give you direction as you fill out all other parts of the canvas.

3. Fast to complete

Whether or not your business model is clearly defined or you are testing out different business models, the BMC template can be completed quickly and helps you generate new business ideas. This allows for quicker feedback, quicker ideation, and faster iteration.

4. Provides a holistic view of your business

With the Business Model Canvas, you can see how all of the elements of your business are interrelated and inform or affect each other. This provides you with a better understanding of how your business operates as a system or ecosystem.

5. Gives you a central document to share externally

Once you’ve filled out your Business Model Canvas template, you can share it widely, get feedback, and make any needed updates. Because the visual presentation is easy to grasp and understand, teams, stakeholders, advisors, and partners should find the canvas relatively straightforward and easy to understand.

Can I customize the template to suit my business or add more details?

Yes, you can customize the BMC to match your specific business needs and add additional notes or details as necessary.

How often should I update or review the BMC for my business?

The Business Model Canvas (BMC) is a dynamic tool that should be reviewed and updated regularly to reflect changes in your business model or market.

Can I use the BMC template for both startups and established businesses?

Yes, the BMC is suitable for both startups and established companies. It's a versatile tool that can be used for business model development, refinement, and innovation at any stage.

Is there a way to link external resources or documentation directly in the Business Model Canvas template?

Yes, in Miro, you can embed external links directly onto the canvas. This is particularly useful if you want to provide more detailed information or references for specific model sections or business cases.

Can I export my Business Model Canvas to share with stakeholders not using Miro?

Absolutely! Miro provides multiple export options for your canvas. You can save your Business Model Canvas as an image (PNG, JPEG), a PDF, or even a CSV file for the data.

Are there any integrations available to enhance my use of the Business Model Canvas template in Miro?

Yes, Miro offers a suite of integrations with popular tools and platforms to streamline your workflow. For example, you can integrate with tools like Slack for team communication, Google Drive for document storage, or Jira for project management. Using these integrations, you can seamlessly bring in external data, notify team members of updates, or even automate specific tasks directly within your Business Model Canvas board.

Get started with this template right now.

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Technology Product Canvas Template

Works best for:.

Product Management, Roadmaps, Meetings

Originally created by Prem Sundaram, the Technology Product Canvas allows product and engineering teams to achieve alignment about their shared roadmap. The canvas combines agile methodologies with UX principles to help validate product solutions. Each team states and visualizes both product and technology goals, then discusses each stage of the roadmap explicitly. This exercise ensures the teams are in sync and everyone leaves with clear expectations and direction. By going through the process of creating a Technology Product Canvas, you can start managing alignment between the teams -- in under an hour.

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4P Marketing Mix Template

Marketing, Brainstorming, Workshops

Product, Place, Promotions, and Price. Starting with this template (and those 4Ps) you can choose the best way to take your product or service to market. The secret is to create just the right mix—deciding how much each P needs in terms of investment, attention, and resources. That will help you build your strengths, adapt to the market, and collaborate with partners. And our tool is the perfect canvas to create your marketing mix and share with teams and across your organization.

SCAMPER Thumbnail


Ideation, Operations, Brainstorming

Is your team in a rut? Have you had a lingering problem that can’t seem to be solved? First introduced in 1972, SCAMPER. is a brainstorming method developed by Bob Eberle, an author of creativity books for young people. This clever, easy-to-use method helps teams overcome creative roadblocks. SCAMPER walks you through seven questions that are meant to encourage your team to approach a problem through seven unique filters. By asking your team to think through a problem using this framework, you’ll unlock fresh, innovative ways to understand the problem you’re trying to solve.

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App Development Canvas Template

Market Research, Product Management, User Experience

Ever noticed that building a successful app requires lots of players and moving parts? If you’re a project manager, you definitely have. Lucky for you, an app development canvas will let you own and optimize the entire process. It features 18 boxes, each one focusing on a key aspect of app development, giving you a big-picture view. That way you can fine-tune processes and get ahead of potential problems along the way—resulting in a smoother path and a better, tighter product.

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User Persona Template

Marketing, Desk Research, User Experience

A user persona is a tool for representing and summarizing a target audience for your product or service that you have researched or observed. Whether you’re in content marketing, product marketing, design, or sales, you operate with a target in mind. Maybe it’s your customer or prospect. Maybe it’s someone who will benefit from your product or service. Usually, it’s a whole collection of personalities and needs that intersect in interesting ways. By distilling your knowledge about a user, you create a model for the person you hope to target: this is a persona.

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Disney Creative Strategy Template

Business Management, Ideation, Brainstorming

Know who knew a little something about coming up with ideas that set imaginations alight? Walt Disney. And he inspired the Disney Creative Strategy, an approach that establishes three types of thinkers—dreamers, realists, and critics—and gives each the space to do clear thinking. Your team will go through an engaging exercise of adopting the three mindsets, where they’ll focus on a specific aspect of the idea. The Disney Creative Strategy has a way of yielding brilliant ideas and great products. That’s why it’s used successfully by organizations of all kinds and sizes.

Telecom Companies Business Model

Communication is a vital part of our life. In today’s technology-driven world, most of the communication is through electronic means termed as “Telecommunication”. The term telecommunication is also referred to as Telecom through which we exchange information with each other over certain distances by electronic devices or mediums. This includes all types of data, voice, and video transmission. Most of the time, we interact with our Smartphones or laptops by using internet technology. So, different devices related to transmitting information such as phones (wireless or wired), televisions, laptops, satellites, radios, internet, etc. rely on telecom for providing us various content related to education, work, and entertainment.

The telecommunication industry consists of telecom companies that are telecommunication service providers for providing data or voice transmission services. Communication on a global scale is possible through these companies by means of phone or airwaves or the internet or cables or via wireless medium or wired. The technology infrastructure developed by telecom companies allows sending of data throughout the world in the form of voice, audio, words, or video. The various segments of these companies include telephone operators, cable network companies, satellite companies, cellphone and wireless service providers, and ISPs (internet service providers). So the telecom companies provide infrastructure facilities for communications and data transmission. Telecommunication services offered by telecom companies are mainly of two types, i.e. Wireless telecommunication services and diversified telecommunication services. Diversified telecommunication is further categorized into alternative carriers and Integrated telecommunication services. The description of these can be viewed in the below chart:

Types of Telecommunication Services

Few such renowned telecommunication service provider companies are Verizon, AT&T, Airtel, Idea Cellular, Reliance Jio, Vodafone, Airtel, Tata communication, BSNL, and many more.

Telecommunication or telecom word is derived from combining two words i.e. tele (means distant) which is a Greek prefix and communicare (means to share) which is a Latin word. The beginning of the telecom sector in the 1830s is associated with telegraph invention, which is considered as the first mechanical device for communication. This device facilitated a reduced period of communication, i.e. from days to a couple of hours. Earlier, physical wires were required to connect businesses and homes. Today, the primary way of communication is through wireless digital technology. The telecom system has become more decentralized from a few big players. In present, telecom is more about images i.e. video streaming, high-speed broadband internet access, email communication.

Current Business Models of Telecom Companies

Different elements mentioned in the above business model canvas of Telecom Companies are as under:

Value Proposition

Offerings or the value proposition refer to different products and services as well as their key benefits offered by different firms.

 For individuals and households

  • The value proposition of telecom companies aimed at providing communication services to customers and providing access to the internet, own network access, network access of other network operators.
  • Telecom companies provide data and voice services i.e. phone service (both wired and wireless), television, internet, business, and home networking, etc.
  • Various services and benefits are offered by telecom companies like Wireless telecommunication, Fixed telecommunication, and Fixed broadband facility. Apart from providing Fixed telecommunication or landline traditional communication services, telecom companies also facilitate data service and wireless systems. Also, the television set is available of higher bandwidth speeds through fibre optics which is improved infrastructure.
  • For fixed telecommunication or basic landline, various options are available for end-users. Basic voice packages are offered by telecom companies that include calling, caller ID, and call waiting features.
  • Broadband internet access is one of the beneficial and most popular services provided by telecom companies. Discounted packages are also available for offering different services altogether, i.e., telephone.
  • One unique service offered by telecom companies is Mobile money or mobile wallets. Various main telecom companies have facilitated users with mobile wallets such as Reliance Jio Wallet, Airtel Money, Vodafone M-Pesa. for the purpose of providing digital payment facilities to customers. The various benefits of mobile money include money-saving in an efficient and effective way, means of transferring funds that is both inexpensive and easy, providing access to unbanked people for basic financial services, and other financial service access i.e. loans, insurance, etc.

For businesses or corporate

The Value proposition offered by telecom companies to corporate or businesses are as under:

  • Better communication: Telecom companies provide information networks that can be electronically exchanged using both wireless and wired methods. This information is sharable across the country and in different rooms. Few examples are fax machines, telephone, handheld devices for communication, and computers that are internet-connected. Capabilities have increased through mobile communication devices offered by telecom companies, i.e. tablets and smartphones. Using these devices, employees can access various applications and information, exchange emails, work on different documents, and attend conversations through teleconference.
  • Team collaboration enhancement: Most of the organizations or businesses have cross-functional teams who work together on various business aspects such as new product development, corporate initiatives, marketing campaigns, etc. For these, they get together in the form of various meetings regularly to discuss plans, progress, and ideas. Telecom companies support this get together of employees by providing the access and capabilities for communication.
  • Flexibility enhancement: During global crises like today’s Covid-19 pandemic, organizations prefer remote working of employees for safety. Also, different roles demand excessive travelling for client meetings or training purposes. For all these requirements, telecom companies provide appropriate communication and data services to let the employees and their superiors stay connected to each other.
  • Superior customer service: Through 24/7 internet broadband services, landline, and wireless phone services; it is convenient for customers to communicate for any query or service. The telecom companies facilitate effective communication between organization and customers with various offerings that helps organization to strengthen its customer relationship both with current and prospective customers as well as brand value.

Customer Segments

This includes different segments of customers to whom telecom companies deliver their offerings or value proposition.

  • Wireless consumer segment: This includes different residential customers and corporate. Different residential customers mostly take data and voice services. This segment is further categorized into Post-paid and Pre-paid customers.
  • Wired or Wireline customer segment: Businesses i.e. medium and large enterprises fall under this category as they mostly have a worldwide presence. The need for telecommunications services for these enterprises is much wider than individual residential customer needs. Their requirement includes geographic coverage, customized, and reliable services. Networking solutions, advanced voice and video communications, fixed-line infrastructure are also required by them. So, large multinational companies look for heavy investment in telecom infrastructure to facilitate wide operation network.
  • Other telecom companies: Telecom companies also provide network connectivity services to different other network companies that require it.

Key Partner

This includes the network of different partners and suppliers that facilitate a business model to operate.

In the case of telecom companies, various infrastructure vendors, network operators, device or equipment manufacturers, etc. are the main key partners. Telecom service providers purchase mobile devices from manufacturers of these devices, i.e. device manufacturers. They further sell the devices to customers or end-users to enhance or make their customer portfolio.  To build networks, service providers take services of infrastructure vendors and also, tie-up with other network operators for traffic agreements in order to allow the access of other networks to their customers.

Key Activities

All those primary activities that a business is indulged into for the main purpose of earning profit are considered as key activities of a business model.

  The key activities of telecom companies consist of mainly 4 activities i.e. voice, data provision, messaging, and provision related to broadband services.

  • Voice: Voice telecommunication or Telephony communication is related to a sound communication between people over a distance through wireless or wire phones and other related technology. Different telecom service providers supply voice telecommunication services by either their own network infrastructure or using the network infrastructure of a network operator.
  • Data provision: This includes all the multimedia content traffic between different parties i.e. application, service, end-users, etc. Telecom companies provide a lot of products and services to facilitate customers with increase access to data services. Few of such services are related to supporting access to music, internet, television, and game services.
  • Messaging: Another key activity of telecom companies is message services that include both SMS and MMS services. SMS stands for short message service and MMS is a multimedia messaging service. Both services are used for sending and receiving messages through the mobile handset and different other devices. SMS allows customers to exchange short messages in the form of text messages to and from mobile phone devices. Wherein, MMS service offers customers to send and receive multimedia based messages in the form of music, pictures, videos, sound, and text as well.
  • Broadband services: Broadband internet connection services are also provided by telecom companies.

Key Resources

The key resources are as under

  •   Physical network infrastructure e. towers and cables that enable telecom companies to operate their telecommunications network across the globe. The network infrastructure of telecom companies is the main source to deliver their voice, data, and messaging services to customers. Customers are connected through the network’s access part which ultimately links to the core network. The core network manages routing and set-up of calls, message transfers, and data connections.
  • Licenses: Through licenses, telecom companies can deliver mobile and fixed communication services to customers.
  • Human capital: Sales and marketing team, technical team, supply chain management team, etc. play a significant role in the operation of telecom companies.
  • Suppliers or supply chain management: Handset or device manufacturers, network equipment manufacturers, IT, and marketing service providers are also key resources of telecom companies.
  • Apart from above, a few other key resources include IT capabilities, partnerships and alliances, Research & Development, etc.

Different channels which facilitate telecom companies in communication with end-users include retail chains, internet, own physical stores, sales and marketing team, Mobile apps, websites, social media, etc. Telecom companies have direct stores that they own and sell their services to customers and for customer support services. The sales force is also an important key channel for promoting and selling telecom products and services along with providing customers with a user friendly and easy way to access support and manage their services. Different indirect distribution channels such as retailers, distributors, third-party service providers, dealers, etc. are also key channels of telecom companies.

Customer Relationship

Telecom companies build and enhance customer relationship through providing a bundle of services along with more attractive data plans. The regular investment in their network up-gradation also facilitates them to offer much better customer services. The sales team of telecom companies is available for accessing their services in the store or over the phone. Also, customers can take services from their website and mobile app as well. Customer interaction is also available through social media such as Facebook, Twitter, etc. An exclusive help and support section is usually maintained by telecom companies on their website to support customers in their issues and queries.

Cost Structure

Expenses of telecom companies include infrastructure development and network maintenance cost, network installation cost, after sale support services, IT capacity development costing, Licenses cost, etc. Other elements of cost structure comprise salary and benefits to staff, retail outlets, etc.

Revenue Streams

  Telecom companies make money in various ways. Earlier just telephone calls were the only source of the biggest revenue for the companies but now due to advance network technology, the revenue scenario is evolving. Now telecom is focusing less on voice and more focus is on text, video, and data. More revenue sources are inclined towards services that are delivered over mobile networks. Internet access that provides computer-centric data apps like interactive entertainment and broadband services is contributing to revenue generation of telecom companies.

Revenue Model of Telecom Companies

  •   Telecom companies generate revenue via subscription mobile services, fixed landline, and wireless broadband services . These companies offer a high-speed broadband facility, wireless network, and mobile security-related services to businesses. Money is earned by providing entertainment services such as television and advertising facilities, etc.
  • Income from fixed-data services: Such as IP, satellite, Integrated Services Digital Network, etc.
  • Retail fixed-voice service revenue: Comes from the sale of all services to end-users. This includes voice-related long-distance and local services such as line subscription/rental, calling charges, and fee-related to the connection.
  • Mobile telecom services revenue: This includes income earned via mobile data usages such as SMS, mobile data access, and mobile phone calls.
  • Mobility segment i.e. wireless and mobile subscription services also contribute to the revenue of telecom companies. These companies charge from big multinationals for premium services such as video-conferencing and high-security private networks.
  • Telecom companies also source revenue from other telecom companies by providing them with network connectivity.

Emerging Business Model of Telecom Companies

The telecom companies play a significant and central role in the lives of people and businesses. To ensure innovative communication services such as broadband and other services like 4G or recent 5G up-gradation, these companies are required to bear huge investments. The appropriate return on these investments is connected and challenged by the extremely competitive environment of the telecom sector. Today, telecom companies work in saturated and much mature markets. To add new products and services is becoming challenging as severe competition with over-the-top service providing companies such as WhatsApp.

Below are the different aspects that are creating demand for adopting new business models by telecom companies:

  • Voice service demand declining: One of the key challenges telecom companies are facing today is the maturity of their mobile voice services and declining of the traditional business i.e. fixed-line. Nowadays data connectivity or network access is the primary or main product and voice is considered as a feature of any app rather than the main product.
  • The entry of over-the-top (OTT) players: OTT apps such as WeChat, WhatsApp are over-taking the traditional ecosystem. The free voice and video calls, text messages, etc. are the benefits of these OTT players over similar paid services of telecom companies.
  • Evolving customer priorities: The rapid changes in expectations of customers are also key reasons for restructuring the business model of telecom companies. For example, people now use multiple devices for internet access.

So, the rapidly changing business environment of telecom companies demands a more innovative business model. The new era of the digital customer, a decline in revenue streams, and also upcoming opportunities in emerging sectors, etc. are the clear indication that the current business model of the telecom industry demands innovation-based on the latest and advanced technology system.

The emerging business model of telecom companies in a world of 5G technology

In the coming 5G technology in the communication industry, different emerging business models can be adopted by telecom service providers. The two main alternatives available for telecom companies are:

  • Continuation of their core operations
  • Diversification into digital services and transformation into a digital enterprise.
  • Telecom companies as a provider of connectivity: In this business model, the main focus is on the core business of telecom companies i.e., connectivity. Different key factors to be considered are growth in ARPU (Average revenue per user), IoT (Internet of things) connectivity, subscriber growth, etc.
  • Partnership-based business model: This business model includes the partnership-based business of telecom companies. The partner may be an application provider of 3rd party for providing content or a Virtual Network Operator.
  • Business model as a provider of digital services: In this business model, telecom companies provide services beyond the services of core connectivity i.e. digital services such as smart homes, financial services, and Video content.
  • Location-based service business model: Telecom companies are coming up with various services that are based on usage data of cell-phone and location tracking. For example, the tracking of agents of insurance companies can be easier using this data and it will be easy to monitor the time spent by them with clients. Moreover, different services are being tested by telecom companies to enable truckers to reschedule deliveries or reroute through real-time based traffic information.

The tremendous growth in the telecom industry can be seen over the last decade. Though the telecom industry provides a lot of services to its customers, the telecom companies are still struggling to choose an appropriate business model in today’s technology-driven environment. Business models of telecom companies are being transformed. New opportunities for these companies have emerged due to the adoption of social networking, the proliferation of devices, cloud computing, and wireless mobility at a much wider level.

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Do you also provide service for a formulation of a Business-plan for a new Startup company inbteh TELECOM area

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Really helpful, thank you.

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Extremely very good work/discussion. Thanks so much!

Is there a reason not to discuss traditional analysis here, both SWOT and PESTEL? If discussed here, what will be the answer/analysis?

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The 9-Step Business Model Canvas Explained (2023 Update)

telecommunication business model canvas

Written by Raquel Alberdi

Business | entrepreneurship, 16 comments(s).

Business Model Canvas

Blog » The 9-Step Business Model Canvas Explained (2023 Update)

telecommunication business model canvas

“A major mistake made by many start-ups around the world is focusing on the technology, the software, the product, and the design, but neglecting to ever figure out the business . And by “business” we simply mean how the company makes money by acquiring and serving its customers”.

-Reid Hoffman

After meeting with hundreds of entrepreneurs and business owners over the years I believe the LinkedIn co-founder and Blitzscaling author Reid Hoffman’s got it spot on.

People tend to focus on specific parts of their business, such as which software packages are being used, which is the cheapest supplier, how to optimize internal processes…?

They get so bogged down in the details of the day-to-day running that they lose the overall vision of their business.

Without this vision they are unable to scale, they make marginal profits, miss opportunities, struggle to innovate, and end up running “just another” business.

Another handy metaphor in understanding this common mistake is the soldier in the trenches .

Every meter of ground gained comes at a heavy cost, mistakes are made, and progress is hard-fought and slow…a day-to-day experience for 99% of entrepreneurs and businessmen.

But when you do have that 360 vision you see the entire battlefield. Decisions are much clearer, fewer mistakes are made, and progress is fast and methodical.

Fortunately, a business model framework exists that gives you both vision and clarity .

The Business Model Canvas provides entrepreneurs, business owners, and strategists with a tool to analyze, structure, and evolve a business while always keeping the bigger picture front of mind.

So let’s take a closer look at how it works.

Table of Content

What is the Business Model Canvas?

Created by Swiss entrepreneur and Strategyzer co-founder, Alexander Osterwalder, the Business Model Canvas is a visual representation of the 9 key building blocks that form the foundations of every successful business. It’s a blueprint to help entrepreneurs invent, design, and build models with a more systematic approach.

Why is it so popular within the business community?

Its simplicity. The business model canvas allows us to carry out a high-level analysis without drilling down and getting lost in the details. You just draw out the 9 building blocks on a blank canvas, fill them in as each concept relates to your business, and hang it somewhere everybody can see.

It’s a visual overview of your entire business on a single canvas.

While the Business Model Canvas is an extremely fluid concept and hyper-specific to individual companies, each canvas is still broken down into these 9 key building blocks:

Customer Segments

Value propositions, customer relationships, revenue streams, key resources, key activities, key partners.

When laid out on the canvas the model will look something like this:

 Scheme of business model in which 9 important fields are developed for its execution.

While you’ve probably come across each of the 9 building blocks before, the attractiveness of the Business Model Canvas is that it confines them to a single page , not a traditional 42-page document.

This makes it a lot easier to digest, as well as assess existing business models or map out new ideas.

How do I fill out the Business Model Canvas?

To start your Business Model Canvas you will need to breakdown and analyze each of the 9 building blocks.

A good way to approach this is to gather the heads from marketing, sales, operations, finance, and manufacturing (if product-based) and pencil-in a morning where you can all meet together.

Then, after drawing a mock canvas onto a whiteboard, proceed to dissect and discuss each of the 9 building blocks as they relate to your business. You can use sticky notes to better organize your thoughts around the canvas.

If you are an entrepreneur or new business owner working alone and don’t have a team to bounce your ideas off, not to worry. You can still carry out your analysis before sharing it with a like-minded entrepreneurial community or forum, like those found on ThePowerMBA , to get useful, insightful feedback.

Whichever way you decide to approach it, I recommend you complete each block in the following order:

  • Cost structure

For continuity, I’m going to use the fashion retail giant Zara when analyzing each of the 9 key building blocks.

If you’d like to skip to another case study similar to your own business, navigate to the table of contents at the top of the page and select one of the other business model canvas examples.

Customer segment business model canvas for Zara company

The first block of the Business Canvas Model is about understanding who is the most important customer(s) you’re delivering value to. Or, in other words, who are they? What do they do? And why would they buy your product or service?

Not a single company exists without its clients, making customer segments the best block to start with while drawing out your business model canvas.

A great exercise to define your customer segments is to brainstorm and create your company’s buyer persona (s) .

Buyer personas are fictional depictions of an ideal or hypothetical client. Typically when brainstorming a buyer persona you’d want to define certain characteristics (age, demographic, gender, income, industry, pain points, goals, etc.)

However, remember at this stage we want a snapshot of our customer segment. There’s no need to jump into great detail just yet.

In the case of Zara, there are three distinct customer segments to whom they offer different products.

The products created for each of these customer segments (clothing, shoes, and accessories) are not trans-consumable. That is to say, a woman’s dress is highly unlikely to be worn by a 7-year-old child.

Once we know exactly who it is we are targeting, it’s time to look at what we as a company have to offer.

Zara Customer Segments business model canvas template showing the development of the 9 fields

The second phase is about figuring out your company’s value propositions , and importantly, your UVP (unique value proposition). The “what” that makes customers turn to you, over your competitors? Which of their problems are you best at solving?

Each value proposition consists of a bundle of products or services that fulfill the needs of a buyer persona from your customer segment. It’s the intersection between what your company offers, and the reason or impulse customers have for purchasing.

Some popular questions to ask while determining your UVP are:

  • Which specific customer pain point are you trying to solve?
  • What job are you helping customers get done?
  • How does your UVP eliminate customer pain points?
  • What products or services do you provide that answer this specific pain point?

So let’s try and apply this to Zara. Why do people choose to purchase from them, over their competitors?

Zara’s principal value propositions are fairly clear. They offer various ranges of stylish men’s, women’s, and children’s clothing and accessories at an affordable price.

But there’s more to it than that.

If we dive a little deeper we see Zara’s value propositions are more complex, which are behind the success of the brand:

Fast fashion

Zara adds new clothes and designs to its collections every 2-3 weeks, both in its stores and online. It keeps the brand updated, fresh, and modern while maintaining its all-important medium price point

Great eCommerce experience

Once you enter Zara’s online store you’re presented with a clean, easy-to-navigate, and high-end feel. The customer segments are visible on the left navigation bar with a search tab to further aid customers with their online experience.

Zara's Canvas business model where you can see the innovative presentation of its image

Localized stores

You can find a store in nearly all major retail locations (shopping malls, retail outlets, airports, etc.) meaning accessibility is not an issue for the majority of consumers.

Flagship stores

Zara demonstrates its aesthetic evolution to customers through its flagship stores. The recent opening of their Hudson Yards , New York City flagship is a great example of this. Customers shop around its vivid, minimalist layout offering them an experience aligned with the brand’s deeper, eco-friendly values.

Zara's Canvas business model where you can see the innovative presentation of the image of its stores

Zara Hudson Yards, New York

Business Model Canvas Template Zara - Value Propositions

The next step is to ask yourself how you are reaching your customers, and through which channels ?

This includes both the channels that customers want to communicate with you as well as how they’ll receive your products or services.

Is it going to be a physical channel? (store, field sales representatives, etc.) Or is it a digital channel? (mobile, web, cloud, etc.).

Zara has 3 primary channels in which they communicate and deliver products to its customers:

  • Direct sales through their stores
  • Online (both app and website)
  • Social media

Customers can go to a traditional “bricks and mortar” store to browse, model, and purchase different items of clothing at one of their retail stores.

Alternatively, they can shop online or through their mobile application and have the product delivered straight to their door or nearest store. The choice is completely up to them!

So that covers Zara’s commercial channels, but what about how they communicate with customers?

While they do communicate through their mobile app, their predominant channel is social media.

What’s more, they’re really, really good at it.

For example, did you know that Zara invests less than 0.3% of its sales revenue into advertising?

This is only possible due to an A-rated social media presence . Customer queries are not only dealt with quickly, but recommended re-works are sent back to HQ, forwarded onto in-house designers who then apply the feedback to future collections.

This customer-first approach through fluid communication channels has saved them thousands of dollars in marketing, strengthened their brand, and created a loyal customer base.

You should only step away from this building block once you’ve decided how each of your customer segments want to be reached.

Zara Channels business model canvas template where its components are developed

Once you have acquired customers, you will need to think about how you can build , nurture, and grow those relationships.

Now, this can be automated and transactional like large eCommerce brands Amazon or Alibaba. Or, it could be at the complete opposite end of the scale and require a more personal relationship you’d typically have with a bank or your local bike shop.

Zara’s relationship with its customers is threefold, and lies somewhere in the middle of transactional and personal:

  • Salesperson at store
  • Brand through social media
  • Sentimental attachment to a product

Yes, you have the initial transactional touchpoint at the store or online, something relatively impersonal and for many the only interaction they’ll have with the brand.

However, customers (especially in the fashion industry) are encouraged to continue to interact with a brand through social media platforms.

As we mentioned before when discussing channels, Zara has a very effective communication system in place. Not only can people instantly get in touch with the brand, but also engage with new posts, images, and collections uploaded to social media.

This personal approach to customer relationship building can, in some cases, lead to the natural growth of brand ambassadors and communities .

An attachment can also develop between customers and particular garments or accessories from one of their collections. The sentimental attachment to these products also creates another potential form of brand loyalty.

The relations with Zara's clients to give a Business Model Canvas where the 9 points to be developed are seen

Now that you’ve described how you are going to create real value for your customers, it’s time to look at how you plan to capture that value.

What are your revenue streams? Is it going to be a transactional, direct sales strategy ? Are you going to consider a freemium mode l, where you give a portion of your product or service away for free with the idea of converting later on down the line?

If you’re a SaaS company such as SalesForce or Strava , then it’s likely that a licensing or subscription revenue model will be more appropriate.

At Zara, it’s extremely simple. They make their money by selling clothes and accessories either at a store or online.

Zara business model canvas template for the development of Revenue streams within the 9 points to work

As you can see, we’ve filled in the entire right-hand side of our business model canvas. We touched upon:

Customer segments

  • Value propositions
  • Revenue streams
  • Distribution channels

Now it’s time to move over to the left side of the business canvas model and look at what we need, internally , to deliver our value propositions.

Key resources of the Zara Business Model Canvas

To start with, let’s take a look at key resources.

The key resources are all things you need to have, or the assets required to create that value for customers.

This could be anything from intellectual property (patents, trademarks, copyrights, etc.) to physical holdings (factories, offices, delivery vans, etc.) right down to finances (the initial cash flow perhaps needed to start your brand).

Another key resource every company needs to consider is its human capital . Are you going to need highly specialized software engineers? Or field-based sales teams?

They are relatively capital-heavy resources that need to be factored into your business model.

In the case of Zara, they are going to need a number of key resources if they hope to deliver their propositions:

  • Stock management
  • A large, interconnected network of physical stores
  • A strong brand
  • Logistics and supply chain infrastructure

Stock is vital for both online and offline customers.

If they are unable to supply their range of products and meet customer demands, satisfaction levels fall and they have a serious problem on their hands.

A large distribution network of brick and mortar stores combined with a strong brand name help mitigate these factors, as well as reinforce any ongoing marketing activities and communication efforts.

Finally, an efficient logistics process within Zara is critical, especially when you consider the complexities involved with such a large-scale operation.

They will require the necessary technology to analyze data on inventory, storage, materials, production, and packaging, with the staff to execute each of these stages and manage the delivery of the final products.

Zara business model canvas template where the Key Resources are developed

The next step is to define the key activities – the areas you need to be good at to create value for your customers.

To mix it up a little let’s take a look at a slightly different business in Uber .

Their key activities can be broken down into:

  • Web and mobile app development
  • Driver recruitment
  • Marketing: customer acquisition
  • Customer service activities : drivers’ ratings, incidents, etc.

They need a fast, clean UX for their customers using the app, drivers to carry out their service, and the ability to both market the product and deal with any customer queries.

Zara’s key activities will differ to those of Uber. Some of the things they need to consider would be:

  • Manufacturing
  • Retail process (point of sale and 3rd party management)
  • Distribution channel / logistics

Design is a key activity as Zara’s value proposition is to provide stylish garments at an affordable price. Their collections need to be constantly updated to follow the latest fashion trends at the time.

To produce their collections Zara will also require manufacturing capabilities. Now Zara doesn’t own their own factories (we will get to that in the Key Partners section) but they still need to be involved in the garment manufacturing process.

Everything from fabric selection to pattern making, to detailing and dyeing affects the outcome of the final product which of course they have to then go on and sell.

The effective management of the retail and distribution channels (online, offline, shipping, and communication with providers) is also key. A breakdown in either of these activities, such as a poor relationship with an important provider will have serious consequences for the business.

Zara business model canvas template showing the key activities for its development

Most modern business models now require brands to build out and work with various key partners to fully leverage their business model.

This includes partnerships such as joint ventures and non-equity strategic alliances as well as typical relationships with buyers, suppliers, and producers.

A great example of a strategic partnership would be between ThePowerMBA and Forbes . In exchange for exposure of our brand to the magazine’s global audience, we provide expertise and content on high-level business education programs.

As we touched upon when discussing key activities , Zara requires strategic partnerships with many different providers if they are to design and produce their collections.

Another key partner is their major holding company, Inditex .

Inditex has several subsidiaries including Massimo Dutti , Pull & Bear , and Oysho . Being a subsidiary of Inditex means they share a consolidated balance sheet, stakeholders, management and control, and various legal responsibilities.

While as a subsidiary Zara is afforded certain freedoms when it comes to design, delivery, and the general running of the company, the overall strategy will need to be aligned with Inditex and its other subsidiaries.

Zara Key Partners business model canvas template where the eighth point is developed

The final step of the Business Model Canvas is to ask yourself, how much is it going to cost to run this model?

This includes some of the more obvious needs such as manufacturing costs, physical space, rent, payroll, but also areas such as marketing activities.

If you are unsure of exactly what to include in your cost structure take a look at a Profit and Loss statement ( P&L ) from a competitor or company in a similar industry to yours. You’ll find many items overlap such as research and development ( R&D ), cost of goods sold, admin expenses, operating costs, etc.

Once that’s done you should prioritize your key activities and resources and find out if they are fixed or variable costs .

As Zara is such a large, corporate business they are going to have both fixed costs (rent, payroll, point of sales personnel) and variables, such as costs associated with the fluctuating sale of goods, purchase of materials and, manufacturing costs.

Once you’ve completed these 9 steps, your Business Canvas Model should look something like this:

Business Model Canvas Examples

Hopefully, you were able to get a good feel for the effectiveness of the business model canvas with our run-through of Zara.

However, if you found it difficult to follow due to the stark difference between your industries, I’m going to quickly go through 3 more companies to demonstrate the tool’s flexibility:

  • Netflix (Media service/production)
  • Vintae (Vineyard)

Even if these business model canvas examples don’t align exactly with your industry, I honestly believe that studying different models gives you a competitive advantage in your professional career regardless.

If you’re currently employed by a company, you’ll better understand how your specific role helps the company achieve some of its “long-term” goals.

Alternatively, if you are a business owner yourself (or perhaps thinking of starting your own business) you’ll have a better understanding of your business and where potential opportunities lay.

I’m sure you’re familiar with our next business model canvas example candidate, Netflix .

The global media company offers an online streaming service of various movies, documentaries, and TV programs produced in-house or licensed 3rd-party content. Their success sparked a revolution in the online media world with the likes of Amazon, Apple, Disney, HBO, and Hulu all rushing to launch their own online video streaming platforms.

Netflix started life as an online DVD rental company, basically a web version of the more popular (at least at that time) “bricks and mortar” Blockbuster.

Co-founder Reed Hastings predicted as far back as 1999 that the future of media was in online streaming, saying “postage rates were going to keep going up and the internet was going to get twice as fast at half the price every 18 months.”

It wouldn’t be until 2007 that Hasting’s prediction would become true when Netflix, as we now know it, was born.

So let’s take a current look at their business model canvas:

Netflix business model in which the 9 topics are taken into consideration

As you probably know, there are very few people out there who haven’t subscribed, watched, or at least heard of Netflix. There is content for everybody: wildlife documentaries, sci-fi movies, rom coms, action-thrillers, you name it – it’s there.

That’s why their customer segment can be classified as a “ mass market ” as the base is just so diverse.

All people require is a computer, TV, internet, and/or smartphone and they’re good to go. For most developed markets, that covers just about everybody.

Value Proposition

Whether on the train to work, sitting in the car (if you’re not driving!), or relaxing at home in front of the TV, you can consume their online, on-demand video streaming service.

They also have a huge library of content for consumers to choose from, ensuring that people keep coming back, as well as increasing their mass-market appeal.

They also produce high-quality, original content to differentiate themselves from their competitors.

Most people access Netflix either through their website or mobile/TV App . Another popular channel that you may have picked up on is their affiliate partners .

You’ve perhaps signed up for a mobile, TV, and internet package where the provider offers Netflix as an extra to sweeten the deal, so to speak.

That would be an example of an affiliate partnership between Netflix and mobile service providers.

I doubt many consumers have had direct contact with Netflix unless it’s to resolve a subscription issue or general query. It’s very much a self-automated service – you download the app, select the program you wish to watch, and hit play.

Very simple, very effective.

Again, this doesn’t need much embellishment. Netflix generates money from the different tiers and packages put together in their subscription services.

This varies depending on the region to account for local markets, but on the whole, it’s sold at a low price point.

Originally, Netflix’s Key Resources would have been their unrivaled DVD collection combined with a cost-effective mail-order system.

Nowadays it’s undoubtedly the rights to stream online video content. Netflix has brokered deals with some of the biggest production studios worldwide.

Combined with their huge library of in-house productions , it’s more than enough to encourage customers to renew their subscriptions.

To help sustain interest in their product, Netflix understands they need to serve-up relevant content for each sub-sector of their mass audience. Therefore their machine learning algorithm selects content for consumers based on streaming habits (what they watched, at what time, etc,.) to personalize the customer experience.

This explains why over 80% of all content streamed on Netflix was cherry-picked by this algorithm, making it a Key Resource for their business model.

Also, Netflix accounts for a whopping 12.6% of global bandwidth usage . The literal capacity to stream their services must be met meaning bandwidth must also be included here.

Content procurement is arguably their biggest Key Activity. They need to find people to produce and deliver their original content, including actors, studios, writers, etc. as well as secure the licensing and streaming rights from 3rd party producers such as Sony, Warner Bros, and Disney.

Finally, they need a fast, easy-to-use application to host their online streaming service. This needs to be available for both TV and mobile devices if they are to deliver their “on-demand” value proposition.

K ey Partners

Seeing as Netflix’s entire business model is largely based around streaming 3rd party content, key partnerships need to be built with production studios . No content, no Netflix!

Also, as we touched upon earlier Netflix is one of the largest consumers of bandwidth worldwide. If the speed and delivery of their streaming service are to be continued then deals will also need to be made with internet service providers (ISPs).

Netflix’s biggest expenditures come from both their in-house content procurement and 3rd party licensing agreements . The high-quality standard of video streamed on Netflix is only possible due to the speed and performance of its online platform and application , which has additional costs of staff, software, etc.

To show you just how flexible the business model canvas can be, I wanted to throw in a slightly leftfield example. Vintae is a Spanish wine producer who, after a detailed analysis of the business model canvas, was able to innovate and disrupt one of the world’s most competitive industries.

As some of you may know, the wine industry is extremely competitive. It’s also steeped in history and tradition , making it very challenging for newcomers to grab market share, let alone think about year-on-year growth and revenue.

However, CEO “Richi” Arambarri looked at the traditional “ bodega ” business model and saw a chink in its armor.

A “small” innovation in the business canvas model helped them to become one of the region’s most important winery groups, with over 10 installations and a presence across all regional denominations (Rioja, Priorat, Rias Baixas, etc.) with year on year growth of 30% – practically unheard of in such a competitive industry.

So how did Vintae analyze the business model canvas to find a niche in their market?

To answer that question, we must first look at the traditional winery business model .

Traditional Winery Business Model with its 9 developed points

As you can see, the wine industry has historically been patrimonial. Vineyards and estates are passed down through generations with the winery responsible for all phases of production, clarification, and distribution.

The traditional winery business canvas model suggests you must be the owner of the winery/vineyard where the wine is “manufactured”, meaning physical assets are a key resource of the business model.

So, if you wanted to start producing a Rioja, for example, you’d have to set up your vineyard in the region.

This is monumentally expensive as you need to:

  • Purchase the land
  • Plant a vineyard
  • Absorb set-up and installation costs
  • Deal with maintenance costs

It’s here where Vintae saw their opportunity.

What if we move vineyard ownership across the business model canvas from key resources to key partners ?

By leasing the equipment and space of large wineries (of which there was plenty), they could still produce their wine but reduce the cost and exposure associated with land purchase, crushing equipment, huge storage tanks, vineyard maintenance, and their bottling line.

This enabled them to focus on their sales, marketing, and distribution channels to create a better brand experience for their customers.

Also, it afforded them more flexibility when creating new wines as they were no longer confined to the limitations of grapes grown on their vineyard.

The lightness of this new business model eliminates maintenance overheads, channels energy into personalizing the customer experience, and allows for unprecedented levels of growth in one of the world’s most competitive industries.

Vinate business model

Business Model Canvas Software

Although I did mention starting with a large whiteboard, sticky notes, and a pack of colorful sharpies there are several options in which you can digitize the business canvas model production process.

While I still believe the aforementioned process is extremely valuable (it gets your entire team’s input in a single hour-long session) you may decide it more viable for each member of management to pool their ideas digitally before sharing with the rest of the group.

If that’s the case, then take a look at some of the following software tools for creating your business model canvas.


Created by the founders of the business model canvas Alex Osterwalder and Yves Pigneur , Strategyzer offers a range of business model canvas templates for you to get started with.

If you opt for the paid model (there is a 30-day free trial period) they offer a series of various classes that teach you how to build and test different value propositions and business models.

A real-time built-in cost estimator analyzes the financial viability of some of your business ideas, identifying alternative areas you may wish to explore with your model.

All-in-all, it’s a great resource to play around with and test some of your business ideas, with the option to dive into further detail if you see fit.

Canvanizer is a free, easy-to-use web tool that allows you to share links between team members who are brainstorming ideas for a business model canvas, but working remotely.

Like Strategyzer, there are several business model canvas templates provided to help you get started with your analysis. The strength of this platform is its accessibility. Much like a Google Doc., several people can brainstorm on the same canvas simultaneously with changes being synchronized automatically.

Business Model Canvas Tool

A ThePowerMBA alumni, impressed by the simplicity and effectiveness of the tool, went ahead and created the free application Business Model Canvas Tool .

It’s an incredibly intuitive, and easy-to-use tool that allows you to create templates simply by clicking the + button in each building block.

Each business model canvas created can be downloaded and shared as a pdf. with the rest of the team.

Would You Like to Learn More about Business Models?

If, after going through our 9-step guide on how to use the Business Model Canvas you’d like to learn more about different business model analysis tools , take a look at our alternative MBA business program .

As you’ll see, the course gives students a 360-degree view of business and management practices – such as engines of growth, segmentation and targeting, and value propositions.

I highly recommend you go check it out.

Regardless, I’d love to hear what you thought about this guide. Was it helpful? Would you like to see additional business cases analyzed from your industry?

Let us know in the comments below.


What’s it like to take one of our programs.

The best thing is to try it yourself with these classes that are totally FREE! Sign up and experience being part of the business school that has challenged the traditional educational model.

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telecommunication business model canvas

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Ayeah Goodlove

Perfect thought

kourosh abdollahzadeh

I am a DBA student. I have used your site a lot. Thank you for the information

KJ Hwang

Well defined steps, Thanks for good contents.

Reza Ebadi

Dear Sir many thanks for you guideline. it was very effective for me. Thanks a Million

Debashis Rout

Well explained with practical business case


Wow, this article was incredibly helpful! I’ve heard about the Business Model Canvas before, but I wasn’t sure exactly how it worked or how to use it for my own business.


I need a sample of business model canvas for a beauty palour

Opoku Samuel

you’ve done a great job. keep it up

Claudia Roca

This is a very insightful content with a step-by-step practical approach of how to write a BMC and what exactly it should contain.

My team and I literally used your guide to write a BMC for a project we were working on, and in just about an hour we were done.

Thank you so much for this content, it was really helpful.


Thank you very much Collins and we are glad you are using this tool.


Insightful! Gave me the clarity I needed for my upcoming business. Thank you so much.


Thank you very much for the business model example of ZARA. It was very very informative


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Thank you very much for reading and sharing your comments

Tatyasaheb Phadtare

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  • Saas Business Model (2023) - […] in this material you will learn all about SaaS as a business model. It’s an interesting material that will…
  • What is the main objective of inferential statistics? (2023) - […] offers a lot of information about different phenomena or behaviors that are relevant for making business decisions. The results…
  • How to Prepare a Canvas Business Model - The Passionate Seeker - […] you have filled out each building block of the Business Model Canvas, you will have a comprehensive overview of…
  • The Business Model Canvas: A Comprehensive Guide for SMEs and Start-ups – AdvantEdge - […] Further insights and practical applications of the BMC can be found here: The Power MBA’s Guide. […]
  • Top 5 Tips For Business Success by Freeduhm Team | Milyin - […] that market and have a chance to make money and become profitable. Additionally, you can use a business model…

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What is a business model canvas? Overview with template

telecommunication business model canvas

In 2013, I co-founded a startup in the Indian online gifting industry with three friends. It was my first involvement with a startup. Startups are fascinating — they’re small, agile, and quick. However, another key feature of startups is their ability to creatively solve problems.

What Is A Business Model Canvas Overview With Template

At that time, we aimed to target India’s gifting market, which was more than 90 percent offline. We had plans to establish an online shop selling a wide variety of gifts. But before we got started, we decided to document our idea. Amidst many templates, we discovered the business model canvas, a lean tool for outlining business models. It was neat, straightforward, and free. This tool brought remarkable clarity to our idea.

Despite shutting down the startup in 2015, I gained a wealth of knowledge during those two years. One major takeaway was the tools and techniques I learned along the way. The business model canvas was one of them. Even after seven years, I still use the business model canvas in my role as a product manager.

In this blog post, we’ll explore how product managers and entrepreneurs can effectively use a business model canvas.

What is a business model canvas?

The business model canvas is a template introduced by Alexander Osterwalder in 2005 as part of his Ph.D. studies under the supervision of Yves Pigneur. The business model canvas outlines nine crucial elements of a business model in an easy-to-understand visual template: customer segments, value proposition, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure.

Various companies, including startups, scale-ups, and large software organizations, have utilized this template since its inception to simplify their business strategy and improve their understanding of the overall business structure. However, before we delve into what a business model canvas entails, it’s important to comprehend why simplifying business strategy and structure is essential.

The last company I was part of employed 10,000 individuals. It ran more than 20 different businesses, each generating millions in revenue. When operating on such a large scale, it’s vital to have a clear strategy that outlines the business models. This strategy should define who the customers are, identify key partners, elaborate on the value proposition, and explain the cost structure, among other things.

The strategic blueprint serves as a go-to source of information whenever confusion arises. While this is true for large corporations, it’s equally applicable to smaller scale-ups and startups. It’s crucial to understand the business strategy and models from the onset. This comprehension aids in crafting a framework that can be applied when tackling complex issues or determining priorities.

This is where the business model canvas proves invaluable. It assists in laying out business models in a straightforward, user-friendly format.

What are the 9 components of the business model canvas?

The business model canvas comprises nine key elements:

Customer segments

Value proposition, customer relationships, revenue streams, key activities, key resources, key partnerships, cost structure.

9 Components Of A Business Model Canvas

These components cover the three main areas of a business: desirability, viability, and feasibility. The nine components also aim to bring transparency and understanding to a broad audience, which can include upper management and internal teams such as engineering, design, product management, marketing, sales, legal, and customer service.

Collectively, these elements capture the essence of a business model. They help map the relationship between these elements and how they intertwine with one another. Let’s take a more in-depth look at each element.

Everything starts with the customers, which is why this is the first element of the business model canvas. This component identifies the different customer segments a company targets. These can vary across business models.

telecommunication business model canvas

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telecommunication business model canvas

For example, while working at Zalando (one of Europe’s largest fashion eCommerce companies), there were multiple business models. One focused on end customers, while another focused on partners selling products on Zalando. The business model canvas helps outline these customer segments in a single snapshot.

Try to avoid being too detailed. Mention who the partners are, but there’s no need to note the demographics, age, gender, etc., of the customer segment unless required.

This term refers to the unique advantage or value a business provides. It’s what sets the business apart from competitors. This could be a product or a service that the business uses to solve a customer’s problem.

For instance, Uber’s value proposition is its ability to help customers travel from point A to point B on demand.

Channels are the various ways through which a business intends to interact with customers and/or partners. For Airbnb, their website and apps are the primary channels. But they also leverage social media, offline hoardings, email marketing, and community forums to reach their audience.

This element addresses the various ways a business interacts with customers to improve satisfaction and the overall experience. Monitoring customer feedback and how they interact with a company’s product is critical in a competitive landscape.

Amazon, a company that prioritizes customer focus, includes 24/7 customer support, personalized recommendations, regular newsletters, ratings and reviews, Amazon Prime membership, and community engagement as part of its customer relationships.

This component lists the different ways a company plans to generate revenue. For Google, revenue streams include advertising, the Google Play Store, Google Cloud, and hardware sales.

This section includes all necessary activities needed to keep the business functioning smoothly and to deliver value to all users. Microsoft’s key activities, for example, include software development, hardware development, cloud computing, gaming, research and development, and VR.

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As the name implies, key resources are the essential tangible and intangible resources needed to keep the business operational. These resources incur costs, making their documentation vital. An online gift-selling company would require a website/app, collaborations with manufacturers, and marketing capabilities.

This element focuses on the partnerships or collaborations a business might have with other companies to better serve customers, reduce risks, and increase profits. For Facebook, key partners include regular users who generate content, advertisers, and influencers who create content at scale.

This element outlines the costs and expenses associated with a business. For companies like Google and Facebook, costs can be substantial given their value propositions. While it may be difficult to capture the cost structure of these giants in a small space, it becomes easier and beneficial for smaller companies.

For example, McDonald’s cost structure would include manufacturing costs, service-based costs (such as employee costs), franchise costs, and infrastructure costs.

What are the benefits of using a business model canvas?

Indeed, using a business model canvas offers many advantages for businesses of all sizes. To summarize, some of the key benefits include:

Benefits Of Using A Business Model Canvas

Visual representation

A business model canvas provides a visual overview of all the critical elements of a business. This allows stakeholders to see how these elements relate to each other, facilitating understanding and decision-making.

The visual nature of the canvas makes it accessible to various stakeholders, including top management, engineers, designers, customer service, and operations teams.

Clear collaboration, communication, and alignment

Developing and managing products often require the input and collaboration of multiple stakeholders . A business model canvas provides a clear, concise tool for aligning all these parties, promoting better communication and collaboration. It also helps product managers secure buy-in from stakeholders at an early stage, reducing risks and fostering better alignment, especially in a cross-functional environment.

Strategic long-term thinking and analysis

By design, a business model canvas encourages long-term strategic thinking. It helps identify business strengths and weaknesses, facilitates brainstorming new ideas and improvements, and shapes long-term strategies to better serve customers.


Businesses and ideas evolve, and a business model canvas accommodates these changes. It offers a flexible template that can be easily modified, often featuring version numbers to track document evolution. This flexibility supports an iterative approach, ensuring the canvas captures all necessary information as the business evolves.

Business model canvas template

The internet is replete with various business model templates. A quick Google search will return 34,200,000 results. Here’s a quick template that I created on Google Sheets:

Business Model Canvas Template

Click here to access the business model canvas template. You can click File > Make a copy to download the canvas and customize it for your business.

Example of successful use of the business model canvas in product management

Here’s an example of a business model canvas for Facebook:

Business Model Canvas Facebook

How do I create a business model canvas for my business?

After you fill out the nine components we went over earlier, there are some other key points to keep in mind to successfully create a business canvas model.

Involve all the stakeholders early on

Since a business model canvas has elements ranging from tech to marketing, sales, and customer service, it’s important to involve these stakeholders right at the start. This reduces the risk and helps to bring everyone on the same page.

Keep it simple

Don’t use complex sentences while explaining the pointers under every element. Use simple and short words. Simplicity will make it easier for the audience to consume the information effectively.

Be data-driven

Let every pointer included in the business model canvas be data-driven. This will help lay down a strong foundation for long-term decision-making.

Focus on an iterative approach

It’s difficult to come up with a business model canvas right at the first go. Hence, it’s important to keep an iterative approach and let the document evolve depending on the feedback from the contributors. You can use versioning to keep track of all the changes.

Consider external factors

Currently, the growth of many businesses is slow and it’s projected to be the same for the entire year. It’s important to consider these external factors while coming up with a business model canvas since it helps to consider factors that might not be in control of a business.

Conclusion and key takeaways

A business model canvas can be a very effective tool if used right away. Product managers can use this tool before starting a product or a feature. It can help them have clarity on the idea before the actual development work starts.

Also, since it involves all the major stakeholders right at the start, a business model canvas can help mitigate risks early on. It’s a great tool for validating business ideas, products, or a feature.

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Business Model Canvas: Explained with Examples


Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

Business Model Canvas Explained

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

  • The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
  • The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
  • The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
  • The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
  • The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
  • It’s easier to edit and can be easily shared with employees and stakeholders.
  • The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
  • The business model canvas can be used by large corporations and startups with just a few employees.
  • The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
  • You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
  • The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
  • A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

  • Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Business Model Canvas Template

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

Customer Persona Template for Business Model Canvas Explained

There are different customer segments a business model can target and they are;

  • Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
  • Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
  • Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
  • Diversified: A diversified market segment includes customers with very different needs.
  • Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

  • Personal assistance: you interact with the customer in person or by email, through phone call or other means.
  • Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
  • Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
  • Automated services: this includes automated processes or machinery that helps customers perform services themselves.
  • Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
  • Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

Customer Journey Map

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

  • Owned channels: company website, social media sites, in-house sales, etc.
  • Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

  • Transaction-based revenue: made from customers who make a one-time payment
  • Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

  • Asset sales: by selling the rights of ownership for a product to a buyer
  • Usage fee: by charging the customer for the use of its product or service
  • Subscription fee: by charging the customer for using its product regularly and consistently
  • Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
  • Licensing: customer pays to get permission to use the company’s intellectual property
  • Brokerage fees: revenue generated by acting as an intermediary between two or more parties
  • Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

  • Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
  • Problem-solving: finding new solutions to individual problems faced by customers.
  • Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

  • Human (employees)
  • Financial (cash, lines of credit, etc.)
  • Intellectual (brand, patents, IP, copyright)
  • Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

  • Strategic alliance: partnership between non-competitors
  • Coopetition: strategic partnership between partners
  • Joint ventures: partners developing a new business
  • Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

Value Proposition Canvas

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

  • Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
  • Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
  • Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
  • Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
  • Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
  • Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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FAQs About the Business Model Canvas

  • Use clear and concise language
  • Use visual-aids
  • Customize for your audience
  • Highlight key insights
  • Be open to feedback and discussion

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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Why telecom italia's business model is so successful.

telecommunication business model canvas

Telecom Italia business model canvas

telecommunication business model canvas

Telecom Italia’s Company Overview

Telecom Italia S.p.A. (Telecom Italia), incorporated on March 22, 1905, operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. The Company's segments include Consumer, Business, National Wholesale and Other. The Company is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company's Cloud.

Country: Italy

Foundations date: 1925

Type: Public

Sector: Telecommunications

Categories: Telco

Telecom Italia’s Customer Needs

Social impact:

Life changing: affiliation/belonging

Emotional: badge value, design/aesthetics, fun/entertainment, attractiveness, provides access

Functional: integrates, connects, simplifies, avoids hassles, informs, quality, variety

Telecom Italia’s Related Competitors

Telecom italia’s business operations.

Access over ownership:

The accessibility over ownership model is a business concept that allows consumers to utilize a product without owning it. Everything serves a purpose. As a result, consumers all across the Western world are demanding more value from their goods and services, and they are rethinking their relationship with stuff.' Furthermore, with thriving online communities embracing the idea of access above ownership, the internet is developing as a robust platform for sharing models to expand and prosper.

An additional item offered to a customer of a primary product or service is referred to as an add-on sale. Depending on the industry, add-on sales may generate substantial income and profits for a firm. For example, when a customer has decided to purchase the core product or service, the salesman at an automotive dealership will usually offer an add-on sale. The pattern is used in the price of new software programs based on access to new features, number of users, and so forth.

Archetypes of business model design:

The business model archetypes include many business personalities and more than one business model linked to various goods or services. There is a common foundation behind the scenes of each unit, but from a management standpoint, each group may operate independently.

Brands consortium:

A collection of brands that coexist under the auspices of a parent business. The businesses in this pattern develop, produce, and market equipment. Their strength is in copywriting. Occasionally used to refer to a short-term agreement in which many companies (from the same or other industrial sectors or countries) combine their financial and personnel resources to execute a significant project benefiting all group members.

Multiple products or services have been bundled together to enhance the value. Bundling is a marketing technique in which goods or services are bundled to be sold as a single entity. Bundling enables the purchasing of several goods and services from a single vendor. While the goods and services are often linked, they may also consist of different items that appeal to a particular market segment.

Combining data within and across industries:

How can data from other sources be integrated to generate additional value? The science of big data, combined with emerging IT standards that enable improved data integration, enables new information coordination across businesses or sectors. As a result, intelligent executives across industries will see big data for what it is: a revolution in management. However, as with any other significant organizational transformation, the difficulties associated with becoming a big data-enabled company may be tremendous and require hands-on?or, in some instances, hands-off?leadership.


Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Customer data:

It primarily offers free services to users, stores their personal information, and acts as a platform for users to interact with one another. Additional value is generated by gathering and processing consumer data in advantageous ways for internal use or transfer to interested third parties. Revenue is produced by either directly selling the data to outsiders or by leveraging it for internal reasons, such as increasing the efficacy of advertising. Thus, innovative, sustainable Big Data business models are as prevalent and desired as they are elusive (i.e., data is the new oil).

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.


Simplifying many product kinds inside a product group or set of goods. A technique for doing business analysis in which a complex business process is dissected to reveal its constituent parts. Functional decomposition is a technique that may be used to contribute to an understanding and management of large and complicated processes and assist in issue solving. Additionally, functional decomposition is utilized in computer engineering to aid in the creation of software.


Excluding current clients that are unprofitable or who do not adhere to company principles. Efforts directed towards reducing (not eliminating) demand for a product that (1) a company cannot provide in sufficient quantities or (2) a firm does not want to sell in a particular area due to prohibitively expensive distribution or marketing expenses. Increased pricing, less promotion, and product redesign are all common demarketing tactics.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Direct selling:

Direct selling refers to a situation in which a company's goods are immediately accessible from the manufacturer or service provider rather than via intermediate channels. The business avoids the retail margin and any extra expenses connected with the intermediaries in this manner. These savings may be passed on to the client, establishing a consistent sales experience. Furthermore, such intimate touch may help to strengthen client connections. Finally, direct selling benefits consumers by providing convenience and service, such as personal demonstrations and explanations of goods, home delivery, and substantial satisfaction guarantees.

Discount club:

The discount club concept is built on perpetual high-discount deals utilized as a continual marketing plan or a brief period (usually one day). This might be seen as a reduction in the face value of an invoice prepared in advance of its payments in the medium or long term.

Electronic commerce, or e-commerce (alternatively spelled eCommerce), is a business model, or a subset of a larger business model, that allows a company or person to do business via an electronic network, usually the internet. As a result, customers gain from increased accessibility and convenience, while the business benefits from integrating sales and distribution with other internal operations. Electronic commerce is prevalent throughout all four main market segments: business to business, business to consumer, consumer to consumer, and consumer to business. Ecommerce may be used to sell almost any goods or service, from books and music to financial services and airline tickets.

Enterprise unbundled:

Unbundling is a business practice that recognizes that a company may have three primary focuses: client connections, product innovation, and infrastructure. Moreover, three of these elements may coexist in big businesses, creating a complex model that needs significant resources to operate effectively. Thus, unbundling is a crucial idea for any enterprise's future success. Additionally referred to as deconstruction or disaggregation, this benign word refers to a dominating force that propels digital change into the heart of whole sectors.

Fast fashion:

Fast fashion is a phrase fashion retailers use to describe how designs travel rapidly from the catwalk to catch current fashion trends. The emphasis is on optimizing specific supply chain components to enable these trends to be developed and produced quickly and affordably, allowing the mainstream customer to purchase current apparel designs at a reduced price.

This model is used to describe a pricing system that charges a single flat price for service regardless of its actual use or duration. A company may establish a responsible position in a market if customers get excellent pricing before performing the service. The consumer benefits from a straightforward cost structure, while the business benefits from a predictable income stream.

From push to pull:

In business, a push-pull system refers to the flow of a product or information between two parties. Customers pull the products or information they need on markets, while offerers or suppliers push them toward them. In logistics and supply chains, stages often operate in both push and pull modes. For example, push production is forecasted demand, while pull production is actual or consumer demand. The push-pull border or decoupling point is the contact between these phases. Wal-Mart is a case of a company that employs a push vs. a pull approach.

Infrastructure as a Service (IaaS):

Infrastructure as a Service (IaaS) is a subset of cloud computing that offers on-demand access to shared computing resources and data to PCs and other devices. It is a paradigm for ubiquitous, on-demand access to a pool of customizable computing resources (e.g., computer networks, servers, storage, applications, and services) that can be quickly provided and released with little administrative effort.

Layer player:

Companies that add value across many markets and sectors are referred to be layer players. Occasionally, specialist companies achieve dominance in a specific niche market. The effectiveness of their operations, along with their economies of size and footprint, establish the business as a market leader.

The long tail is a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items to many customers instead of only selling large volumes of a reduced number of popular items. The term was coined in 2004 by Chris Anderson, who argued that products in low demand or with low sales volume can collectively make up market share that rivals or exceeds the relatively few current bestsellers and blockbusters but only if the store or distribution channel is large enough.

Historically, developing a standard touch sales model for business sales required recruiting and training a Salesforce user who was tasked with the responsibility of generating quality leads, arranging face-to-face meetings, giving presentations, and eventually closing transactions. However, the idea of a low-touch sales strategy is not new; it dates all the way back to the 1980s.

Make more of It:

The business invests time and money in developing in-house expertise and development that may be used both internally and outside to sell goods or services to clients or third parties. AWS was created to meet Amazon's cloud computing requirements. They quickly discovered that they could offer their services to end-users. At the moment, AWS accounts for about 11% of Amazon's overall income.

Mobile first behavior:

It is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices. The term is “mobile first,” and it is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices.

On-demand economy:

The on-demand economy is described as economic activity generated by digital marketplaces that meet customer demand for products and services via quick access and accessible supply. The supply chain is managed via a highly efficient, intuitive digital mesh built on top of current infrastructure networks. The on-demand economy is transforming commercial behavior in cities worldwide. The number of businesses, the categories covered, and the industry's growth rate are all increasing. Businesses in this new economy are the culmination of years of technological progress and customer behavior change.

Open business:

Businesses use the open business approach to incorporate goods and services ecosystems from third parties that operate inside the same market framework. Collaboration between companies has the potential to increase the value delivered to the end customer or user. Software developers and platform integrators often use this business model.


Orchestrators are businesses that outsource a substantial portion of their operations and processes to third-party service providers or third-party vendors. The fundamental objective of this business strategy is to concentrate internal resources on core and essential functions while contracting out the remainder of the work to other businesses, thus reducing costs.

Pay as you go:

Pay as you go (PAYG) business models charge based on actual consumption or use of a product or service. Specific mobile phone contracts work on this principle, in which the user may purchase a phone card that provides credit. However, each call is billed separately, and the credit balance is depleted as the minutes are used (in contrast to subscription models where you pay a monthly fee for calls). Pay as you go is another term for pay & go, pay per use, pay per use, or pay-as-you-go.

Performance-based contracting:

Performance-based contracting (PBC), sometimes referred to as performance-based logistics (PBL) or performance-based acquisition, is a method for achieving quantifiable supplier performance. A PBC strategy focuses on developing strategic performance measures and the direct correlation of contract payment to success against these criteria. Availability, dependability, maintainability, supportability, and total cost of ownership are all standard criteria. This is accomplished mainly via incentive-based, long-term contracts with precise and quantifiable operational performance targets set by the client and agreed upon by contractual parties.

Platform as a Service (PaaS):

Platform as a Service (PaaS) is a class of cloud computing services that enable users to create, operate, and manage apps without the burden of establishing and maintaining the infrastructure usually involved with designing and developing an app.

Regular replacement:

It includes items that must be replaced on a regular basis; the user cannot reuse them. Consumables are products utilized by people and companies and must be returned regularly due to wear and tear or depletion. Additionally, they may be described as components of a final product consumed or irreversibly changed throughout the production process, including semiconductor wafers and basic chemicals.

Resellers are businesses or individuals (merchants) that acquire products or services to resell them instead of consuming or utilizing them. This is often done for financial gain (but could be resold at a loss). Resellers are well-known for doing business on the internet through websites. One instance is the telecommunications sector, in which corporations purchase surplus transmission capacity or take the call from other providers and resell it to regional carriers.

Revenue sharing:

Revenue sharing occurs in various forms, but each iteration includes the sharing of operational gains or losses amongst connected financial players. Occasionally, revenue sharing is utilized as an incentive program ? for example, a small company owner may pay partners or colleagues a percentage-based commission for recommending new clients. Occasionally, revenue sharing is utilized to share the earnings generated by a corporate partnership.


A retail business model in which consumers self-serve the goods they want to buy. Self-service business concepts include self-service food buffets, self-service petrol stations, and self-service markets. Self-service is available through phone, online, and email to automate customer support interactions. Self-service Software and self-service applications (for example, online banking apps, shopping portals, and self-service check-in at airports) are becoming more prevalent.

Shop in shop:

A store-within-a-store, sometimes known as a shop-in-shop, is an arrangement in which a retailer leases out a portion of its retail space to another business to operate another independent store. This arrangement is prevalent with gas stations and supermarkets. In addition, numerous bookstores collaborate with coffee shops since consumers often want a spot to relax and enjoy a beverage while browsing. Frequently, the shop-within-a-store is owned by a manufacturer who operates an outlet inside a retailer's store.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.


In most instances, support is not intended to be philanthropic; instead, it is a mutually beneficial commercial relationship. In the highly competitive sponsorship climate of sport, a business aligning its brand with a mark seeks a variety of economic, public relations, and product placement benefits. Sponsors also seek to establish public trust, acceptability, or alignment with the perceived image a sport has built or acquired by leveraging their connection with an athlete, team, league, or the sport itself.


Subscription business models are built on the concept of providing a product or service in exchange for recurring subscription income on a monthly or annual basis. As a result, they place a higher premium on client retention than on customer acquisition. Subscription business models, in essence, concentrate on revenue generation in such a manner that a single client makes repeated payments for extended access to a product or service. Cable television, internet providers, software suppliers, websites (e.g., blogs), business solutions providers, and financial services companies utilize this approach, as do conventional newspapers, periodicals, and academic publications.

Tiered service:

Users may choose from a limited number of levels with gradually rising price points to get the product or goods that are most appropriate for their requirements. Such systems are widely used in the telecommunications industry, particularly in the areas of cellular service, digital and cable television, and broadband internet access. Users may choose from a limited number of levels with gradually rising price points to get the product or goods that are most appropriate for their requirements.

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Denis Oakley & Co

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April 15, 2019 By Denis Oakley

What is the Telekom Malaysia Business Model Canvas?

What is the Telekom Malaysia Business Model Canvas?

In this post, I’ll cover the Telekom Malaysia Business Model canvas. Telekom Malaysia is a traditional telecom company that was incumbent in Malaysia from its founding until the early ’90s. The Telekom Malaysia business model is a common telecoms business model for nationalised and integrated telecommunications companies. This model is less common in countries that have privatised their telecoms infrastructure

Since then it’s traditional fixed-line business has come under attack from mobile operators who persuaded people to cut the cord. Malaysia has one of the highest rates of mobile ownership in the world. More recently it has increasingly come under renewed attack as voice has been made obsolete by data.

As a result Telekom Malaysia’s business model now focuses much more on convergence – using its existing products to enable it to sell additional services to it’s large installed user base.

What is the Telekom Malaysia Business Model Canvas?

Looking at the business model it seems like there is a core pipeline business that provides ‘juice’ to the millions of taps that it ‘owns’. What is a lot less clear is whether the New TM approach offers a way out of the convergence trap as everything becomes commodified. Value-added services don’t and will not replace the lost revenue .

For that TM doesn’t seem to have good ideas and so has major problems with both its business model being disrupted and large amounts of business model depreciation that was not adequately funded in the 1946-1986 period.

I go into a lot more detail about the Telekom Malaysia Business Model in the video so do have a look to understand what it is and how it works. Feel free to ask questions in the comments.

  • Business Model Canvas Examples
  • Using Crowdsourcing and Collaborative Mapping to Protect the Malaysian Jungle – and Tigers
  • Leaving it All Behind: Living in the Jungle with Nothing
  • A Manifesto
  • Developing the Business Model Canvas in New Directions

About Denis Oakley

Explorer | Trail Runner | Mountain Lover

'Big' companies are civilisation. I stay in the wilderness guiding entrepreneurs and startups on their journey to becoming 'Big'.

Then I head back to the frontier

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What is the Telekom Malaysia Business Model Canvas?

I help entrepreneurs transform their industries through wiser choices

Outcome : More Traction, Bigger Rounds, Better Products

Method : Problems, Customers, Business Models, Strategy

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What is a MoSCoW Analysis? Definition, Use Guide, and Analysis

By Paul VanZandt

Published on: July 26, 2023

MoSCoW Analysis

Table of Contents

What is a Moscow Analysis?

Moscow analysis use guide, how to do a moscow analysis.

Prioritization and organization are two essential elements in creating a successful project and are also things that are inherently harder to achieve online. While prioritizing elements can be hard online, it doesn’t have to be. The Moscow analysis is a great tool for teams to collaborate on through online whiteboards and has takeaways that are applicable to a variety of different projects and teams.

In this article, we will define the Moscow analysis and talk about what makes it so helpful to teams everywhere. If you are interested in reading some of our other template guides, you can check out our most recent guides on design thinking and using a business model canvas here.

A Moscow analysis , also known as Moscow prioritization, is defined as an organizational framework that helps clarify and prioritize features or requirements for a given project. By creating boundaries for the priorities, teams are able to narrow their focus and create direct and achievable goals.

Moscow is an acronym that stands for the four categories that various features can be sorted into. These categories are: Must have, Should have, Could have, and Won’t have These four categories determine the prioritization of the corresponding features and are a marker of their importance to the overall success and continuity of the project.

  • Must-haves: These are the essential requirements that must be included in the project or product. If any of these requirements are not met, the project or product cannot be considered successful.
  • Should-haves: These are important requirements that should be included if possible. They are not absolutely critical but add significant value to the project or product.
  • Could-haves: These are requirements that are nice to have, but they are not critical. They can be considered if time and resources allow but can be deferred if necessary.
  • Won’t-haves: These are requirements that are explicitly out of scope for the current project or product. These requirements are not currently under consideration.

Moscow short

While the Moscow analysis is most often used to organize a project and its required elements, it can also be used in other scenarios . For example, Moscow prioritization can be applied to better align a team with its values and expectations. It can also be used to prioritize takeaways and next steps from an important meeting. Its main goal is the help visualize the prioritization of the tasks at hand.

These use cases demonstrate the flexibility of the Moscow prioritization to break down important requirements into simple prioritized areas, whether it be for team expectations or a project sprint.

As previously stated, the Moscow analysis consists of four major elements. These categories are explained below alongside some questions to guide what should be included in each category. For the sake of simplicity, we will use a project prioritization for reference.

This section is where you think about the core features that are necessary to the success of the project. Must have features are things that, if absent, would compromise the project as a whole. Without these features, the project would have an entirely different function and wouldn’t serve the intended purpose.

Must have features, while being the most important things to consider, should not account for every detail that will be present in the final version. The features in must have, should have, and could have should all be major considerations to be included in the project, so try and be very specific with the features you add in each section.

Some prompting questions to ask in this section could be:

  • What features are absolutely essential and cannot be replaced?
  • If removed, would the project achieve the same purpose?
  • Will the delivery of the project be a success without this feature?

Should Have

Should have is where the project begins to become more nuanced in its prioritization. Should have features include those that are supplemental to the must have features, things customers have vocalized interest in, and other features that would make meaningful additions to the project.

Should have features should be thought of as just a step below must have. These features, while important, could be pushed to a later release while the must have features are absolutely essential. Without these things, the project will still work, but it will be better with them.

Some prompting questions to ask in this section could be;

  • How does this feature compare to the must have features? What about the could have features?
  • What is a helpful but not required feature?
  • How would the project function if this feature is omitted?

Priority list

Could have features are often misunderstood and get lumped with random possible additions. This section is meant to highlight features that you want to include but aren’t sure if they will be possible.

Could have features are even a step lower on the prioritization of should have features due to either time or substantive restraints. These are features that would be nice additions, but might not directly impact the core function of the product.

  • What would be a useful tool to add that isn’t a priority?
  • What is something that you’d like to add in the future?
  • How would this feature impact the overall product?

Won’t have is one of the most important sections in the analysis. It defines all of the features and points that specifically will not be included in the project release. This section is critical because it narrows the scope of the project greatly and helps define the boundaries that must be followed to achieve a successful project.

In order to have a helpful won’t have section, you need to plan not only the project you’re working on but future projects and parallel endeavors as well. By thinking about what comes in the future and what exists outside of the current release, you are able to narrow the scope of the current project.

  • What features will be purposefully left out of this project?
  • What is being avoided or postponed for a future release?
  • What features fall outside of this releases specific scope?

Learn more: SWOT Analysis Framework

MOSCOW analysis helps teams make informed decisions about what to prioritize and what can be deferred or excluded, leading to more effective project or product development. Here’s how to perform a MOSCOW analysis:

  • Identify Stakeholders: Gather the key stakeholders and decision-makers involved in the project or product development. It’s essential to have a clear understanding of their needs and expectations.
  • List Requirements or Features: Make a comprehensive list of all the potential requirements or features that have been proposed for the project or product. This list can come from user stories, feature requests, or other sources.
  • Categorize Requirements: For each requirement or feature, categorize it into one of the four MOSCOW categories (Must-have, Should-have, Could-have, or Won’t-have). You can do this collaboratively with the stakeholders, using their input to make informed decisions.
  • Prioritize Must-Haves: Focus on the “Must-have” category and ensure that these requirements are prioritized above all else. These are the non-negotiable elements of the project.
  • Prioritize Should-Haves: Once the Must-haves are defined, move on to the “Should-have” category and prioritize these based on their relative importance and impact on the project or product.
  • Consider Could-Haves: Evaluate the “Could-have” category and decide which of these features or requirements are feasible to include, given the available resources and time.
  • Exclude Won’t-Haves: Ensure that the “Won’t-have” category is clearly communicated and understood. These are the features or requirements that will not be addressed in the current project or product.
  • Document the Analysis: Record the results of the MOSCOW analysis in a document or spreadsheet so that all stakeholders have a clear understanding of the prioritization decisions.
  • Review and Iterate: Periodically review and update the MOSCOW analysis as the project or product evolves. Changes in scope or stakeholder priorities may necessitate adjustments.

Learn more: What is PESTEL Analysis?

Using a Moscow analysis is one of the best ways to improve the alignment of a team and understand the prioritization of the project at hand. While these templates are mainly used for product management, they are extremely versatile and can be applied to many different scenarios .

Hopefully, this guide has been helpful, and if so make sure to check out our other posts around online whiteboards and visual collaboration if you want to learn more about how to interact and collaborate online.

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Moscow's High Rise Bohemia: The International Business District With No Business

telecommunication business model canvas

  • Written by Dario Goodwin
  • Published on March 17, 2015

The Moscow International Business Center (Also known as Moskva-City ) was meant to be Russia ’s ticket into the Western world. First conceived in 1992, the district at the edge of Moscow’s city center is intended to contain up to 300,000 inhabitants, employees and visitors at any given moment and, when completed, will house over 4 million square meters of prime retail, hotel and office space to create what the Russian government desired most from this project: an enormous financial district that could dwarf London’s Canary Wharf and challenge Manhattan . Twenty three years later though, Moscow-based real estate company Blackwood estimates that as much as 45% of this new space is entirely vacant and rents have plummeted far below the average for the rest of Moscow. The only press Moskva-City is attracting is for tenants like the High Level Hostel , a hostel catering to backpackers and other asset-poor tourists on the 43rd floor of the Imperia Tower , with prices starting at $25.50 for a bed in a six-person room. This is not the glittering world of western high finance that was envisioned back in the post-Soviet 90s; but what has it become instead?

telecommunication business model canvas

As one might expect from a project of this sheer ambition, Moskva-City has a troubled past. The economic crash in 2008 hit Russia hard enough to evict the previous Mayor of Moscow , Yuri Luzhkov, who had been a cheerleader for the district, and replace him with the considerably more austere Sergei Sobyanin, who famously declared that the whole idea was an “urban planning mistake.” But as recently as 2013, the Wall Street Journal was triumphantly claiming that Moskva-City had risen from the dead, citing 80% occupancy rates and glowing quotes from industry insiders claiming that Moskva-City was the "place to be." Driven by record highs in oil prices, Moscow looked poised to become the next Dubai .

Instead, Moscow is now in the grip of an economic winter prompted by western sanctions and drops in the price of oil. The large financial groupings that Moskva-City was meant to shelter have been warned off by their inability to issue credit to international markets, for example - but Moskva-City isn’t just an Empire State Building left empty by the Great Depression.

A fundamental problem that is holding Moskva back compared to the rest of Moscow is the simple fact that currently, getting to Moskva-City is nigh-on impossible at peak hours. Moscow has long been plagued with transport problems, ever since the government failed to match the dramatic expansion of the city with a dramatic expansion of the transport system after the Second World War. Despite being only 2.5 miles from the Kremlin , Moskva-City is only just inside the ring road that bounds the city center and which acts as the only real transport link to it (and as a result, is clogged by construction vehicles.) A railway and metro hub has been finished, but so far only runs a one-stop shuttle service to the closest Metro station that is actually integrated with the rest of Moscow Metro. The isolation of the outer districts is a large, negative part of the Moscow psyche, and it’s not surprising that this is driving away the globetrotting financial elite this project was meant to attract.

telecommunication business model canvas

The project is managed by architectural practice No.6, which is a constituent part of the large Moscow based practice Mosproject-2 , which is itself a public corporation headed up by Mikhail Vasilyevich Posokhin, who is apparently the “People’s Architect of Russia.” Despite all this state involvement, the project has still managed to become bogged down in bureaucratic infighting - each lot is managed and developed individually, which has led to developers competing for occupants by slashing rates.

Much has been written about the way modern financial districts and towers that inhabit them can be unwelcoming, forbidding or even hostile by design, but the skyscrapers of Moskva-City seem even less friendly than usual. The site - a former stone quarry, chosen out of necessity as the only place in the city center where a new district could be plausibly constructed - is isolated both physically and visually, leaving the cluster a stark anomaly on the city skyline. Even the names seem more imposing than optimistic now: Imperia, City of Capitals , Steel Peak.

telecommunication business model canvas

The Mercury City Tower , so far the tallest completed building on the site, is officially “a strong reference to Russian constructivism, [which] gives the tower a strong vertical thrust similar to the one found in New York's Chrysler building .” It would be easy to criticize the Mercury City Tower for picking ‘inspirations’ that are so totally opposed to each other - The Chrysler building the defining emblem of American pre-crash confidence and Constructivism created with the express purpose (especially architecturally) of extending the Bolshevik revolution into a social revolution - but the way they smash those two inspirations together is almost beautifully ironic.

telecommunication business model canvas

Even though the High Level Hostel is less an asset to a financial district than it is a PR problem, it’s been a huge success since opening in September, already ranked 27th out of 766 hostels in Moscow by TripAdvisor. According to the management agency for Moskva-City , 58% of the new occupant signings this year have been non-financial, including a number of small to medium size businesses. Other areas of office space have been occupied by a restaurant and a culinary school, while another space has been redeveloped into a 6,000 seat theater.

While Moskva-City is failing to be a financial district that could take on the world, it’s inadvertently becoming a humanized space catering to the very groups that the Russian economic miracle left behind. Taking advantage of rents lower than the rest of Moscow , the world class facilities and the sheer desperation of the developers, the humanization of Moskva-City could well create the world’s first high-rise bohemia.

telecommunication business model canvas

Of course, these are not spaces designed for a community, or even for people: these are spaces designed for money, and there’s little scope for changing something that seems so baked into the design of Moskva-City . The High Level Hostel is trading off of the irony of being a hostel in a banking tower, but it’s perfectly possible that at some point people will no longer find this joke funny (especially in a building that seems hostile to the very idea of humor). The isolation of Moskva, even though it allowed this community to spring up in the first place, is just as detrimental to a humanized district as it is to a financial one: even bohemians need to move around the city, or the district risks becoming a black-spot instead of a hot-spot.

Moskva-City’s isolation won’t last forever. The end of construction will open the roads up to traffic, and plans to properly integrate the spur lines of the Metro in this area into the wider system are well under way. The integration of the district will inevitably push up rents, and the Russian economy will eventually boom once again. When that happens, Moskva-City is prime territory to be reconquered by the giants of international finance, and it seems unlikely that the municipal or national governments would want to step in to protect this accidental district. For now, though, the towers capture perfectly this moment of Russia ’s schizophrenic understanding of its place in the world.

telecommunication business model canvas

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