What is b2b and b2c in telecom?

Telecom service providers sell their solutions to various customer types including individuals as well as businesses. If we take the example of mobile communications within the wider telecom industry, mobile phones have already reached around 8 billion subscriptions globally according to Ericsson Mobility Report Nov 2019. That could mean, at least mathematically, that every person on this planet can be equated as a customer of mobile services. Mobile operators spend a lot of time and money to get into the minds of their customers in order to understand how the customers think. They work intensively with their internal staff as well as external agencies to learn more about the types of customers and their needs. Mobile operators and other telecom service providers are constantly trying to find new ways of creating more value for their customers. As a result, they are getting more and more involved in the overall telecom and IT needs of their customers as opposed to mobile-only. That thinking adds products within areas like security, insurance, unified comms, financing, etc. to the mix. But the telecom needs of individuals and businesses are not the same. Individuals are people like you and me who in the telecom world come under the category of “Consumers”. Businesses on the hand come in different sizes but generally speaking, they are collectively termed as “Businesses” or “Enterprises”. More on that below but let’s first try to understand the b2b and b2c concepts, and what they mean for various customer types.

When a business e.g. a mobile operator sells its products & services to an individual e.g. John Smith, the resulting business model is called B2C (Business-to-Consumer). When a business sells its products and services to a business customer e.g. a grocery store, the resulting model is called B2B (Business-to-Business).

Business-to-Consumer (B2C)

Generally, ‘Consumer’ is a big business segment for mobile operators and a lot of innovation takes place within this segment. Many new mobile communications ideas turn into products and services in the Consumer world and are then reused in the business world. However, there are also times when ideas come into existence based on a business need but the resulting product or service can apply to the Consumer segment also. In the UK, if you visit the website of any mobile operator, you are likely to see two tabs (i) Personal and (ii) Business. The ‘Personal’ tab is for Consumer products and therefore B2C and ‘Business’ tab for B2B.

In B2C, customers can usually purchase the products and services through retail stores and other shops. They can also purchase online and get the products delivered to their desired location. Mobile operators typically have their own retail stores to sell directly to the customers but they also work with other partners who sell on their behalf. Examples of direct selling would be if you were to buy a mobile phone service through the retail stores of EE, Vodafone, O2, Three, or any other provider. Example of indirect would be if you were to buy a mobile service of a certain mobile operator through Carphone Warehouse.

Business-to-Business (B2B)

While the Consumer side may be a bit more natural for many of us to relate to, the B2B world is not as straightforward. This is where some of the terminologies and definitions differ depending on which mobile operator is in question. At a very high-level, ‘Business’ products and services can be grouped into at least two key categories based on the size of the business.

  • Enterprise (or Large Enterprise)
  • Small & Medium-sized Enterprises (SMEs)

Depending on the mobile operator, the Enterprise segment could be any business with over 250 or 500 employees. Some mobile operator may have an even higher limit for a customer to be classified as “Enterprise”. Generally, the enterprise segment is a big one for most mobile operators. As the customer is large, their needs vary considerably depending on their size as well as their operational model. Enterprise customers usually require highly flexible mobile solutions that are tailored to their specific needs. Mobile operators, sell custom-made products and services to enterprise customers.

SMEs on the other hand, are business customers with a lower number of employees compared to a large enterprise customer. The definition of SME is dependent on the mobile operator in question, but generally, any business customer with less than 250 employees can be classified as SME. For some mobile operators in the UK, this limit may be a bit higher e.g. 500. SMEs can be broken down into at least two further segments. These sub-segments are micro-businesses also known as Small Office Home Office (SoHo) and mid-sized businesses also known as mid-market. Micro-businesses are those businesses that have less than 10 employees. Practically speaking, things are never in black and white as there are cases when an SME product can be sold to a large Enterprise and vice-versa.

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