Cellcos are spending billions per year (the top 3 spend about $30B on CAPEX for their network). 5G has been hyped to the max. But when will it pay off for the top 3? Article in FT talks about it. It seems IoT and anything connected will be the payoff, but when?
Will DISH get its act together and steal some of the thunder by the time 5G is paying off?
The FCC finally got some teeth as they cut off one VoIP provider. One.
Zoom says that online sales are slowing down and enterprise sales are taking much longer. AT&T has been saying for two quarters that “macro conditions” and late payers (people 60-90 days late) will affect quarterly financials.
RingCentral is thinking about buying 8×8… investors and Wall Street want consolidation in UCaaS as growth has slowed too much to their liking – and stock values have deeply declined. ZK has a take on the deal HERE.
I agree with Zeus on this: “Currently, the UCaaS market has no shortage of providers, and we might have too much supply for the level of demand. In mature markets, share gain is often hard to do without an acquisition.”
Yet RNG has $1.9B in debt already on maybe $2B in revenue (ARR is anticipated revenue based on a full contract– actually revenue is usually less.) However, RNG loses money. Having the top telcos in the world – Bell, FTR, AT&T, VZ, Charter, etc. – and you still can’t grow at 35+%? Think about this: How much of the revenue from these sales does RNG keep? How much gets paid to the telco? RNG does all the heavy lifting, implementation, etc. That’s where the costs are.
They could buy 8×8 for about $1.2B including debt. That would put RNG over $3B in debt on $2.5B in revenue. ZK says buy Dialpad and Sangoma too. That would likely cost another $2B for about $500M in revenue. With huge integration issues. Customer migration will result in big churn because if Dialpad and 8×8 customers wanted RNG they would have bought it. Sangoma has too many companies under the tent for it to make sense to acquire in my opinion.
The biggest competitor is STATUS QUO in UCaaS (those who have been on a webinar with me this year already know that.) Premise PBX systems are still selling about 40% of the time. Getting people to go cloud comms is the challenge now that the pandemic has ended.
Order taking is over. From this point forward, selling is required. Value presentation, Discovery, Challenger, great follow up. That is a small percentage of sales people.
