As digitization reshapes the industry landscape, telecom operators are facing major disruption to their value chains and business models. Technological convergence, over-the-top streaming, redefined communication standards — innovation is sweeping across the industry and pushing telcos to step outside their traditional thinking in order not to become mere providers of a replaceable commodity.
To accelerate telecom digital transformation and maintain effective revenue streams, service providers are adopting a three-tier digital strategy.
The building blocks of a digital strategy
Source: Hitachi
Major forces driving digital transformation in telecom industry
For telcos to win in the digital revolution, one thing is clear — gaining a competitive advantage starts with embracing the key trends that impact the industry the most to further build their telecom capabilities.
5G networks
5G technology heralds the new era of Internet connectivity and communications. As the next generation of wireless tech, 5G offers increased mobile broadband, as well as a big boost in speed and responsiveness. As the technology is evolving, it will unlock a world of opportunities across industries and domains.
- Real-time AR/VR experiences
- Panoramic live broadcasting
- Autonomous vehicles and tele-operated driving
- Cloud-based robotics for smart manufacturing
- Smart healthcare solutions such as remote-controlled ultrasound
The bottom line here is that telecom operators that increase their 5G spending are well positioned to lead the digital transformation in the industry while empowering their enterprise customers with carrier-grade connectivity.
IoT and telematics
The Internet of Things is exploding, to say the least. There are approximately 31 billion IoT devices in 2020, and these numbers will keep growing at a fast pace.
Source: Statista
High-speed networks, smart and cost-effective sensors, and increased processing power enable the ubiquitous connectivity in a range of domains, with transportation and logistics leading the pack. And forward-thinking telecom operators can harness IoT technology to reposition themselves as IoT providers and further build on that connectivity to deliver value-add services.
One such example is Deutsche Telekom, the German operator giant that is launching the “world’s first open platform” for the Internet of Things. This IoT hub will significantly simplify the heterogeneous IoT ecosystem by bringing together connectivity, devices, cloud services, and solutions for data analysis.
Next-gen software-defined networks
As opposed to a hardware-based variety, software-defined networking (SDN) is an approach that enables flexible and dynamic network architecture configuration in order to bolster network performance and improve agility. SDN emerged in response to the limitations of traditional network architectures in meeting today’s demands to rapidly develop and deploy new services, and easily upscale network infrastructures while cutting down operating costs.
For telecom operators, embracing SDN architectures helps to not only overcome the challenges of outdated networks, but also to differentiate themselves and meet growing customer expectations. By retooling their networks, carriers can create network infrastructure just in time, deliver bandwidth on demand and significantly reduce time to revenue.
Transformation journey: Steps to success
Depending on the quality of its existing network architecture, technology stack capabilities, and competitive realities, a telco’s starting point in its transformation journey may vary. But these four building blocks are common to all and can inform a telecom’s strategy.
Streamlining the application portfolio
Once on a path to digital transformation, telecom operators may face serious obstacles posed by complex legacy systems. The challenge with them is that they require constant maintenance and upgrading to keep up with transformation needs, which can hold businesses back and damage the bottom line. And when competing against digital players with asset-light business models, the inefficiencies of old and rigid legacy platforms can stifle innovation.
To accelerate their digital agenda, telecoms need IT systems that are agile, flexible, and support their objectives. A modernization initiative starts with an end-to-end assessment of the IT landscape to uncover potential issues and to develop a business-driven strategy, whether that’s automating core systems, re-engineering legacy solutions, or cloud migration.
Shifting to a user-centric approach
Customer centricity continues to reign supreme in the battle for customer loyalty and consistent revenue streams. 73% of brands with superior customer experience outperform their competitors financially. Creating customer success capabilities is an important piece of the digital transformation puzzle.
Building a customer-centric organization
Source: Deloitte Insights
To move from a service-centric to a customer-centric mindset, telecoms leverage advanced technologies like artificial intelligence (AI) and natural language processing (NLP). By enhancing their CRM software with AI-driven capabilities, service providers can better manage their customer data, predict user behavior, increase engagement, and more. NLP-powered chatbots help streamline customer support activities, understand feedback, and even analyze the underlying sentiment to improve customer experiences with a brand.
Leveraging data-driven analytics
In the digital age when millions of terabytes of information are flowing every second, telecom operators are perfectly positioned to tap this vast amount of valuable data. Advanced data-driven analytics can be a game-changer for enhancing a business value proposition and improving end-to-end customer experience.
Telecoms can use data-driven analytics models to gain valuable real-time insights and optimize their network services to deliver superior QoS. Parameters that telcos can monitor include, among others:
- periods of heaviest network usage and surges in traffic
- network bottlenecks and congestion
- poor download times
- quality of experience for end users.
With access to rich socio-demographic data, location data, network usage data, and other sources of structured and unstructured data, telecom operators can gain a granular, 360-degree customer view to improve segmentation and profiling, personalize marketing initiatives, and reduce churn rates.
Augmenting the IT infrastructure
As global telecom companies add millions of new subscribers on a monthly basis, the amount of customer information is overwhelming. To accommodate these expanding data volumes as well as real-time analytics applications, service providers need high-performing and capable IT infrastructure and telecom software that would support their growth.
By adopting microservices-based architectures and state-of-the-art DevOps tools, telcos can gain the necessary agility and scalability through automated provisioning of computing capacity on demand.
Wrapping up
The digital age is in full gear. With the ever-increasing demand for smartphones, wearable devices, as well as IoT applications, network usage is on the rise. To harness this potential, telcos need to develop a clear digital transformation strategy that would help to streamline their business processes and modernize legacy systems by leveraging tech innovations and advanced IT tools.
Contact our experts to learn more on how to streamline the shift to a digital enterprise and capture the emerging opportunities driven by advanced technologies.
