Estimated reading time: 1 minute
Telcos Industry Viewpoints
With the telecommunications industry transforming to digital business, the sector is changing rapidly and unpredictably, while offering incredible new opportunities at the same time.
To survive, excel—and thrive—in this shifting and challenging landscape, it’s essential for telcos to have a digital transformation strategy with particular areas of focus on customer experience, digital business and network evolution. Technology capabilities are going to be the driving force behind this.
Traditional Communications Service Providers (CSPs) must reinvent customer experience. With traditional differentiators such as network quality or coverage losing significance, customer experience becomes the main differentiator, meaning those CSPs who fail to address this, will fall behind. But there are additional factors for them to be aware of and to act on. Market disruption is often beyond their control—rapidly expanding smart device numbers, the internet of things, innovative OTT service providers, and leaders in the digital economy are all driving change.
Think back 10 years, when text messaging was one of the most profitable services for CSPs. Now growth is slowing, while the growth of OTT services is explosive.
“WhatsApp is now used by one billion people every day. WhatsApp reached the one billion active monthly user milestone a year ago, and now has 1.3 billion monthly active users, most of whom use it daily, according to the company.” ZDNet, Liam Tung July 2017 Read More
But there are opportunities as well as threats. Over the next few years the number of connected devices, sensors and things will explode—creating data lakes with the potential to deliver additional value. Telcos have the opportunity to monetize their data and network, while embracing profitable new business models.
With an undefined future and definitely changing business requirements, agile infrastructure, processes, and operations are key to success. Today’s telcos must launch innovative new services quickly, redefine customer experience for the digital age, and transform and unify core processes to reduce the cost of innovation and operation.
Estimated reading time: 5 minutes
Differentiate to Succeed
Survival and differentiation in a disrupted market.
Most CSPs offer similar services, so it’s difficult for them to stand out. To compete effectively and survive in a rapidly changing landscape with increasing competition, there’s work to do. These telcos must identify new markets that include both consumer applications and business solutions. They need to ensure memorable customer experiences that improve retention as well as new customer acquisition. They must also see and seize opportunities to monetize, while becoming more efficient and modernizing core processes by adopting the cloud.
A seamless customer experience at every touchpoint is crucial to compete successfully. Apple, Amazon, Google and other leading players have transformed consumer expectations in the digital space. Customers now expect a first-rate digital and omnichannel journey. Meanwhile, telcos must remain relevant by using adaptive intelligence to help them react rapidly to marketing insights gained from data—with strong customer offers that are timely, tailored, and targeted.
That’s all well and good, but nimble OTT service providers such as Whatsapp, Skype and Viber, have and will continue to disrupt and erode business in the telecommunications sector. In fact, their popularity has meant that voice and text revenues have declined in the billions as users opt for OTT communications as a way to connect rather than traditional phone plans.
“…consumer behavior regarding traditional communication services is changing, and the total consumer spend on these services is expected to decline even while overall communications activity grows.” Jürgen Meffert and Niko Mohr (2017), McKinsey & Company, Dusseldorf Read the report now
McKinsey & Company: Overwhelming OTT: Telcos' growth strategy in a digital world. Source: Ovum; McKinsey analysis
Nowadays, consumers base their choice of CSP on the devices and offer bundle, rather than network strength. Data is the gold that everyone is after and telcos must take the unique opportunity they have to mine its value.
“Despite having billing information on millions of customers, many telecommunications companies are not using it to the fullest advantage to offer a heightened experience.” Alex Holt, Head of Technology, Media & Telecommunications (TMT) KPMG in the UK, Speed of disruption challenging telecommunications companies: KPMG international (2016) Read report summary now
The telcos that survive and excel will be the ones that embrace market opportunities by modernizing their operations, and capturing data holistically while uncovering its value to create actionable insights. They’ll take the content augmentation opportunities made more possible by relaxed merger and acquisitions regulations in the telecommunications and media industries, and partner with businesses creating products for the smart home, connected vehicles, connected healthcare and mobile wallet, amongst others.
They’ll also need to create new business models to exploit new value streams flowing out of big data, internet of things, connected vehicles, connected homes, sensors and more. With 5G network buildout, there will be new monetization opportunities driven by superior speed, efficiency and coverage.
Estimated reading time: 4 minutes
Telcos and Digital Disruption
To stand still is to be left behind.
Innovation is happening at a startling pace, and competing is not as simple as merely keeping up. Agility counts, and how nimbly CSPs react to market or behavioral shifts makes the difference between being first to market with new products and services or being an also-ran.
Efficiency and simplicity
However, cash flow is an issue for CSPs that have to find the capital to maintain the pace of investment in their networks. Consumers also take it for granted that telephony is on tap at yesterday’s prices. So telcos have to take this hit too. To move faster and to thrive in the digital world, telcos must simplify their core offerings, reduce operational expense, and invest in innovation.
Use data smartly
While they face formidable and unpredictable challenges from OTT disrupters, telcos do have access to a treasure trove of data that they can use to their advantage—to meet users’ ‘me-now-here’ service expectations. Used smartly, it will enable them to deliver more valuable, personalized experiences and product offerings every time they communicate with customers. This will mean prospects are targeted with intelligent offers and customers are positively engaged throughout the entire lifecycle.
Create new partner strategies
With 5G speed and capacity on its way—potentially 10 times the speed of 4G, we’re on the threshold of a hugely connected future. 5G is expected to bring a considerable performance boost at gigabit speed to residential wireless broadband services. And that’s not all. Many hardware companies and telcos are field testing new 5G-capable products and platforms, and developing new partnership strategies together in order to create joint offerings.
Read the Analysys Mason report summary on innovative partnerships. Download now
Telcos will need to collaborate with partners in order to deliver industry-specific solutions that reap the benefits of connectivity in truly compelling ways.
5G provides an opportunity for telcos, in collaboration with other partners, to deliver next generation communications infrastructure-as-a-service nationwide. This is an important area as not all organizations will be able to afford to switch completely to 5G.
“5G is more than just a generational step; it represents a fundamental transformation of the role that mobile technology plays in society. As demand for continuous connectivity grows, 5G is an opportunity to create an agile, purpose-built network tailored to the different needs of citizens and the economy.” Mats Granryd, Director General of GSMA, The 5G era: Age of boundless connectivity and intelligent automation. Read the GSMA report
Traditional telcos will have to move quickly to take their share of this space, as new, non-traditional entities move in by activating 5G networks and offering services based on this new technology.
Embrace the 5G future
What will 5G rollout look like? It’s predicted to result in enhanced smart applications, faster virtual and augmented reality, and tactile internet. With faster data transmission, 5G will revolutionize the internet of things, connecting more devices—including city street lights and traffic lights, smart homes, driverless cars, truck platoons, and robotics.
Isolated communities should benefit from speedier, potentially life-saving medical care. Wearable sensors will provide remote monitoring and real-time transmission of heart rate and other vital signs.
The 5G network could reduce pressure on emergency services by giving them priority. Also, first responders should be able to stream quality video back to hospitals so medical staff can prepare for patients from fires, incidents and natural disasters.
With 5G location tracking capabilities, deliveries will be tracked more accurately, allowing for more effective re-routing when necessary.
5G will undoubtedly be a major catalyst in the evolution of the internet of things. Telcos must provide the agile 5G networks that will support sky rocketing numbers of connected devices, as well as emerging applications that go beyond consumer grade in order to open up new value chains. To do this, they must upgrade their networks to handle a relentless and increasing flood of data created as a result.
Of course, roll-out at scale is not without issue. Total Telecom report on the readiness of Europe’s telcos for 5G. Read article
Find out more about the major opportunities and themes arising from the latest developments in the digital transformation of the telecommunications industry. Read this white paper from the World Economic Forum. Download now
Estimated reading time: 5 minutes
Transform in a
The key transformational opportunities in the communications industry include:
Digital services addressing new revenue opportunities, the changed competitor and partner landscape and new business practices.
Digital channels that allow lower operational expenditure with higher customer satisfaction, and better insights.
Digital transformation across the entire organization, more focused on internal factors, as well as improved agility and innovation.
“Making smart use of digital technologies across the whole business is an imperative for telecom operators that want not only to combat the declining growth, shrinking margins, and intensifying competition of recent years, but also to seize opportunities that could make them stronger and more profitable than before. Getting it right will involve a wholesale digital transformation that starts with full commitment and strong leadership from the top.” Paul Louis Caylar and Alexandre Ménard (2016), McKinsey & Company. Download the full article
Changing technology such as 5G, cloud computing, internet of things, big data, adaptive Intelligence will allow telcos to become increasingly customer-centric. This requires a multitude of transformational initiatives
Internally, they need to attract the best talent to lead them into their digital futures. Skills and thought leadership around digital transformation, cloud, big data and the internet of things are essential. Caylar and Ménard illustrate the digital capabilities that tend to be in short supply:
Externally, telcos must redefine their customer support models to address customer expectations. Customers like digital service. Technological transformation will help telcos provide a superior customer experience and enable better customer engagement through personalized conversations via chatbots, cognitive agents, and virtual assistants.
“Great customer journeys call for excellence in every interaction, clear cross-channel pathways, and a seamless customer experience.” Paul Louis Caylar and Alexandre Ménard (2016), McKinsey & Company. Download the full article
To gauge success, management tools like net promoter score (NPS)—correlated with revenue growth—will be used to measure customer loyalty and value.
To move from being a traditional telco to a digital services provider, CSPs need to connect with top talent, start-ups and innovative companies to create new, combined offerings. They also need to embrace cloud as a growth and consolidation platform for hybrid, multicloud, or for specific industry clouds. The potential of transformation is too good to miss.
“The digital transformation of telecommunications represents a $2 trillion opportunity for industry and society.” World Economic Forum/Accenture (2017), White Paper: Digital Transformation Initiative/Telecommunications Industry Read the report
Telcos can significantly benefit from cloud computing, both as users and—in their role as trusted operators—deliverers of cloud-based capabilities. The economies of scale, cost effectiveness and scalability are irresistible.
Estimated reading time: 7 minutes
Cloud is the Destination
Adoption of cloud services—and the agility and scalability it offers—is essential for survival and differentiation. Only Oracle offers a complete, innovative, cost-effective solution tailored to the telco industry.
Deliver frictionless customer experience
We know that in today’s rapidly changing world, telcos are expected to deliver a first-rate customer experience that’s seamless, personalized, relevant and intuitive, and that engages across new digital, conversational, and social channels. Oracle can help you make every interaction with your customer count so that you build brand advocacy through empowered customers, social communities and agents.
Act on consumer insights to increase relevance
With Oracle, you can personalize every step of each customer journey across the entire customer lifecycle, building relevance and value into every communication. You can also analyze customer insights to generate unique insights, predictions and customer recommendations. You can act, learn and adapt in real time, using adaptive intelligence based on the customer’s digital profile, historical and dynamic customer data.
Compete with new market entrants and competitors
Through our services, telcos can design, launch and tailor their offers to targeted customers and audiences. You can smoothly onboard partners and partner services so that you can rapidly launch innovative service bundles. You will also be able to streamline operations, optimize efficiency and reduce operational costs which will allow you to price yourself more competitively.
In this increasingly connected world, Oracle can help you capture, manage, and use data in an agile framework using innovative technologies. You’ll be able to uncover its value at the right time and reuse it when it’s most to your advantage and to help improve your competitiveness.
Transform the back office
Through our services, you can become more agile and innovative as a business, by modernizing financial management, planning and operations. You can build an end-to-end supply chain platform with cross functional, demand-driven digital operating models and collaborative planning processes. And, with the right people, at the right place at the right time, you’ll master transformational change.
Innovate, innovate, innovate
To help drive continuous agile innovation throughout your business, Oracle can give you instant access to a complete, cloud-native platform, an intuitive user interface, and powerful productivity tools. This will allow your people to create new business opportunities with cloud innovation, using social and mobile services, big data, content collaboration, and the internet of things. This will enable business growth in an agile, scalable, reliable and secure cloud environment.
Wherever you may be in your digital transformation journey, Oracle can help, from optimizing your current on-premise infrastructure in preparation for a move to the cloud, to shifting legacy workloads to the cloud, to offering software-as-a-service models.
Estimated reading time: 2 minutes
One thing you can guarantee about digital transformation is that there’s a continuous flow of facts, figures, predictions and opinions about it. You can’t read everything, so here’s a shortlist of links that will take you to information and discussion about some of the hottest topics right now. When time’s short, let your colleagues take a link and get them to feed back.
Get the latest on Oracle’s Take on Tomorrow for CSPs.
Find out how network function virtualization (NFV) and adoption of cloud technologies can help CSPs overcome the challenge from nimble competitors and changing customer demands. See the Oracle Communications Global Survey and find out what the world’s CSPs are thinking.Read illustrated report now
The past, the present and predictions for the mobile economy
The Mobile Economy 2017 research report by industry experts GSMA looks at what’s happened, what’s happening and what’s likely to happen in the mobile ecosystem. Read an industry overview, find out how mobile is driving innovation and growth, and addressing social challenges. Consider where future industry regulation is going.Read industry report now
Be in the know about blockchain
Blockchain solutions, its role in the internet of everything, and insights on blockchain technology. They are just a few ways you can get involved in blockchain initiatives. For an exploration of blockchain in the communication and digital service sector, visit TM Forum for CSPs:Visit website now
Want to gain vital insights into global LTE investment and mobile IP traffic growth, and what this means for your organization? Oracle researches and publishes the Diameter Signaling Index which provides detailed regional breakdowns to help you adapt across global markets with confidence and highlights industry trends and indicators to help you prepare for growth in Diameter traffic.Read the Diameter Signaling Index, 6th Edition, now