Summary Bullets:
• Gamma has acquired cybersecurity company Satisnet to strengthen its value-added services portfolio for enterprise customers across its UK and continental European markets.
• As connectivity commoditizes, service providers have to decide whether to pursue a low-price strategy or grow their portfolio incrementally to address enterprises’ evolving needs.
Gamma started life in 2002 as a UK wholesale line reseller and has evolved from providing calls and lines from a substantial network of channel partners to a wider range of ‘enabling services’ such as broadband, Ethernet, and mobile as well as increasingly toward ‘strategic services’ that offer greater value-add for customers. These now include a significant base of Microsoft Teams deployments, the Gamma Horizon Collaborate cloud UC&C service, managed network services, and security solutions.
By expanding its portfolio to include services that directly address enterprises and small businesses’ strategic challenges beyond basic connectivity, this approach also makes customers more likely to stay with Gamma and provides better margins in a commoditizing connectivity world.
Over the years, Gamma has made multiple acquisitions (including Telia UK, Uniworld, DX Groep, VozTelecom, and Mission Labs) – a strategy also pursued by competitors such as Chess, Daisy, and Claranet. By contrast, the likes of Neos Networks, CityFibre, and others have focused more on a ‘pile it high and sell it cheap’ network infrastructure strategy.
In addition to acquisitions to enhance and broaden its portfolio, Gamma has expanded internationally – for example through its Epsilon brand in Germany, which emulates the approach first deployed in Gamma’s UK operations. Other examples include Gamma’s VozTelecom in Spain and Gamma Communications Nederland (formerly Dean One and gnTel) in the Benelux region.
What it boils down to is that small and medium-sized business markets are very much alike from one country to the next. They represent a massively diverse opportunity, so the key for success is for service providers to have clear propositions that appeal to customers’ various priorities – be that the supply of value-added services that improve efficiency, productivity, or customer traction and satisfaction, or whether it is simply about keeping business costs under control. This is particularly relevant in a market where CapEx is being substituted by OpEx using the ‘as-a-service’ delivery model.
Interestingly, one common thread across these strategies is the importance of the customer portal: in some cases to enable business clients to order, adjust, and manage their services dynamically, in others to find the best value solution available.
One irony is that smaller, albeit substantial, service providers like Gamma (GBP485 million in revenues in 2022) have proved themselves far more adept at making acquisitions and growing their international footprints than their much larger former incumbent competitors across Europe. Often overlooked, it is service providers like Gamma that have tended to deliver revenue and EBITDA growth where better-known and longer-established players have struggled to limit declines in market share and profit margins.