The current development in macroeconomics is unlike anything we have seen in decades. Disruption is the new normal, and it is fundamentally changing and challenging the way organizations all over the world do business, including the FTTH industry. According to Icotera’s CEO, ISPs must deal with and respond to the new reality. In this article, we outline the main factors that challenge the ISPs’ business right now.
A devastating war in Ukraine and a highly volatile stock market. Irregularities in supply chains and massive disruption in logistics due to COVID lockdowns and the conflict between the US and China. And increased cybersecurity threats.
In these times, ISPs must navigate a market that is characterized by immense uncertainty and destabilization in ways no one could possibly have foreseen.
“Disruption has become the new normal, and agility and your ability to navigate in a turbulent market has never been more important to stay competitive.”
–René Brøchner, CEO, Icotera
The message from Icotera’s CEO, René Brøchner, is clear:
- Shortly put, the basic conditions are changing. Disruption has become the new normal, and agility and your ability to navigate in a turbulent market has never been more important to stay competitive. We need to acknowledge the market forces that are at play and affect availability, demand, and prices throughout the value chain. This is the new reality.
Main challenges in the industry
For the FTTH industry, it boils down to two main challenges that all ISPs must deal with: component shortage and logistic challenges.
– The global chipset shortage, which has hit the entire tech industry and causing prices to go only one way, upwards, is affecting all ISPs, while at the same time making it everyone’s battle against everyone else:
– Unfortunately, the situation has caused a lot of insecurity throughout the supply chain, with everyone pushing back on each other in terms of transparency, prices, and honoring commitments in general. Only the outermost players in the supply chain – the wafer/chipset manufacturers and the end-customers – had avoided being hit sofar.
The CEO points to another main factor that makes a huge challenge to ISPs:
– Logistics challenges are shaking the industry. Simply put, the closing of traditional supply routes forces slower and more expensive routes, making it difficult and costly to ensure that you receive goods and components in time. During the last couple of months, many ISPs throughout the industry have been caught in the storm when batches stranded in Shanghai. Or delivery times were doubled, or shipment costs tripled, when transportation by truck, ship or train was replaced by plane, Brøchner says.
From challenges to opportunities
On the positive side, there are also many opportunities in the market:
- The digital transformation is advancing rapidly, driving forward the need for new and innovative technologies in all parts of our lives. New ways of working and an always-online culture change consumer demands and drive the need for a high-performing and stable internet connection. As ISP, you should invest in high-quality equipment and modern technologies to meet the needs, René says and continuous:
- The current market trends open a myriad of opportunities for ISPs to grow and develop their businesses. But only those players who at the same time manage to navigate and deal with the challenges will be able to grasp the opportunities. According to the CEO, the new reality requires that ISPs have a clear long-term strategy for their business.
Want to know more about how navigate the opportunities, challenges and unpredictability in the market right now? Download our opinion paper and get insights and recommendations on how to turn disruption and tech trends to benefits.