The Digital Telco Imperative

The telecom industry is at a crossroads: no other industry is driven as much by bits & bytes and at the same time faces disinter-mediation challenges for the same reasons. Business models are changing, customer expectations & behaviour are constantly evolving, legacy economics & paradigms are becoming untenable; and that really is the reason why 2014 was the first year when the total global revenue of telco’s had marginally negative growth. Was it the beginning of the end? Will Telco’s, the way we know them, not last? Lets have a quick sneak peak into the industry which harbours the ambition to be the digital gateway to our collective futures….

 Current Telecom Challenges include:

• Data usage going through the roof. However, ARPU not growing proportionally
• Higher costs of handsets, mean subsidies are expected to be higher as the price plans are not increasing proportionately
• Market penetration of wireless is approaching 100%, thus revenue is stagnating
• OTT Services account for nearly 50% of the traffic during primetime, hence infrastructure capital costs are increasing
• As intensity and frequency of new technology disruptions increase, time window to recuperate tech & services investment decreases dramatically
• More new entrants in the traditional telco space. As a consequence- EBITDA is dropping with constant Revenue & Opex pressures

….So how are the operators countering these forces?

Using Digital to Open New Frontiers (New Markets, New Segments)

• Pivoting to become a digital lifestyle companies.
• Blurring the ICT lines and evolving from being plain vanilla telcos to providing content, healthcare, IT services, Cloud Services
• Flexible architecture, digital processes to enable shorter time to launch new services

Using Technology to Transform customer experience and lowering costs

• Leveraging combinatorial emerging technologies (AI, IoT, Big Data, AR, VR) to improve engagement and provide focussed, relevant and targeted experiences.
• Provide self serve medium and digital communities to help answer questions
• Building foundational capabilities in modular fashion
• Transforming the network to be efficient and software based vis-à-vis monolithic silos working in tandem
• Constantly measuring performance through investments in analytics, data lakes and mining for insights and customer behavior

But this journey to become a Digital Service Provider (DSP) is not easy!!!!!

• Traditional telco culture and team structures are not accustomed to extremely fast paced change
• The machinery is slow, processes not optimal and it takes time to move the wheels. Being nimble and quick to respond in an organization with ten’s of thousands of employees is challenging!
• Investor relations focus and the pressure of meeting in year numbers equates to spending capital on short term needle movers and not long-term industry movers
• To pre-empt it, clearly the Digital Transformation exercise has to be a top down mandate, to ensure realization of its true impactIn a nutshell, as Service Provider’s strategy & tactics begin to evolve its becoming apparent that the digital infrastructure will soon become the backbone of every aspect of a telecom operator’s business in the future-
  • Sales: advocacy, reach, acquisition conversion, retention & eventually loyalty
  • New revenue streams: helping pursue adjacent industries, new products & services
  • Opex Reduction: Customer support, internal processes, analytics
  • Network transformation: provide bandwidth and QoS on demand, change network routes etc, software defined networks/radios
  • Enablers: Building IT capabilities
  Telco industry has a unique opportunity to be the digital gateway to the future. I cannot see any other industry driven as much by bits and at the same time faces disinter-mediation challenges for the same reason. The time to act is now, feel free to reach out to us to help plan the journey. We have developed an extensive set of tools and frameworks to enable the digital journey for customers, and are happy to help!