Creative and visionary managers can help turn around struggling firms

Some registered network operators have made significant investments in telecommunications infrastructure such as base stations, masts and switching capacity but have very little to show in terms of subscriber numbers.

To make things even worse, their strategies are focused on driving up subscriber numbers despite the realities of declining average revenues per user or ARPUs in short.

We do not need rocket scientists to tell us that their return on assets is probably way below expected levels and in the not too distant future, these assets will migrate to the other side of the balance sheet as liabilities.

So what’s to be done?

The leaders of these struggling enterprises have two options: they can either come up with entrepreneurially clever solutions, or they can strip the existing assets and run.

For obvious reasons, the latter option is the path of least resistance and most opportunistic managers will opt for this route.

However, for those business leaders with greater visions and a little gravitas, they will probably consider looking for creative ways of squeezing revenues out of their existing assets without necessarily hastily disposing them at fire sale prices.

In the telecommunication industry, this is where the innovative concept of the Mobile Network Operator (MVNO) concept comes into play.

In this model, owners of mobile telecommunications infrastructure can consider leasing out their idle capacity to entrepreneurs who would be able to sell voice and data products under different brands.

In the academic world, this concept is referred as “co-opetition”, where competitors cooperate by leveraging their respective strengths to service underserved customer segments more effectively.

With frequencies and radio spectrum being scarce resources such as land, the MVNO strategy may be the best to adopt.

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